The USAID/Ukraine Capital Markets Project (CMP) was launched in October 2005, and is a five-year program designed to assist the country in developing a vibrant and effective financial sector. This effort will promote sustained economic growth and reduce the costs and risks to a sound pension system. By linking pension reform and financial sector development, Ukraine will support the growth of investment capital, generate new sources of jobs and employment, and ensure the prosperity of current and future generations. The Project’s strategy is based on the essential inter-connectedness of improved financial markets regulation, the development of financial instruments, and private pension reform.

The CMP’s activities are organized around three major components:

• Strengthening the institutional capacities of Ukraine’s regulators to provide prudential oversight and supervision of the non-bank capital markets;
• Developing appropriate financial instruments for portfolio investment, especially for contractual savings institutions;
• Strengthening the capacities of pension fund providers, including regulators, pension fund managers, financial intermediaries, actuaries, accountants, and auditors.

It also envisions several cross-cutting activities, including improvement of the legal framework, increased coordination of regulatory activities, and upgrades to the information technology of the regulators. In addition, CMP will help strengthen key capital markets institutions, provide education and training to financial intermediaries, and increase public awareness of the new pension system. These will be implemented in close coordination with a wide range of Ukrainian partners in order to transfer knowledge, support the growth of local capacity, and further encourage the development of Ukrainian champions for financial sector reform.

Following a decade of severe economic decline, Ukraine’s economy has grown strongly since 2002. GDP has steadily increased, wages and incomes moved upward, trade and current account deficits turned around, and the general budget deficit narrowed considerably. By many measures, the country has surpassed its neighbors with this growth spurt, but to achieve true long term economic success which benefits all Ukrainians, the missing element in this story must be filled in – establishment of a vibrant and efficient financial sector. Recent studies of country’s that achieved sustainable and broad economic prosperity confirm that financial markets are a necessary tool for creating jobs, spurring investments and increasing productivity. The CMP will help address this critical issue, leaving behind a legacy for current and generations of Ukrainian citizens.

USAID Capital Markets Project (CMP) is implemented by Financial Markets International, Inc. (FMI).

Financial Markets International, Inc. is an international law and economics consulting firm. FMI specializes in helping emerging market countries achieve economic growth and development through reliance on market mechanisms, international best practices, and commercial law. FMI has worked around the globe for international donor agencies and private commercial clients.

The CMP has a professional team of over thirty foreign and local experts in financial markets and pension system reform. In addition, short-term expatriate advice and assistance can be accessed from FMI to address specific issues in the market.