Ukraine is accelerating a wide-ranging overhaul of its banking and insurance sectors, aiming to bring both in line with European Union standards by 2028, as it continues economic restructuring under wartime conditions and advances its EU accession process, Ukraine’s central bank governor Andriy Pyshnyy told Reuters.

The initiative is part of a broader strategy to deepen integration with Europe, stabilize financial markets, and strengthen investor confidence at a time when the country is seeking sustained external financing and long-term reconstruction support.

Pyshnyy told the outlet that the country is maintaining momentum on reforms despite the ongoing war, arguing that the conflict has reinforced, rather than slowed, the push toward institutional transformation.

“We have a large-scale programme of European integration,” Pyshnyy told Reuters. “We believe that the war and the transformation we’re undergoing do not mean that we should slow down. Instead, it means that we should use it to accelerate progress.”

The European Union formally opened accession negotiations on Monday, launching the first of six negotiating clusters, which include the judiciary, rule of law, public procurement, and financial control. Kiev expects additional clusters to be opened in the coming months.

Ukraine’s banking regulations are currently about 78% aligned with EU standards, up from roughly 50% prior to the beginning of its war with Russia.

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Banking sector shows resilience amid war conditions

Despite the disruption caused by the conflict, Ukraine’s banking system has remained operational and comparatively stable. The sector has adapted to repeated shocks, including energy infrastructure strikes, cyberattacks, and severe economic contraction.

According to the central bank, the system is currently profitable, well capitalized, and liquid, with non-performing loans near historic lows.

The economy contracted sharply in the first year of the war but has since partially recovered. Authorities have credited regulatory tightening and emergency monetary measures with helping maintain financial stability under extraordinary pressure.

Insurance sector lags behind banking reforms

While banking reforms have advanced significantly, the insurance sector remains less aligned with EU requirements, currently estimated at around 55% compliance.

Pyshnyy told Reuters that the central bank is pursuing a broad restructuring of the insurance industry aimed at improving transparency, stability, and its attractiveness to foreign investors.

The reform gap between banking and insurance highlights uneven progress across Ukraine’s financial architecture as it moves toward regulatory harmonization with the European bloc.

EU integration tied to investment and reconstruction needs

For Kiev, aligning with EU financial standards is closely tied to its ability to attract private capital for reconstruction. The government and the World Bank estimate Ukraine’s recovery and rebuilding costs at nearly $588 billion over the next decade.

International financial assistance is expected to remain a critical component of short-term stabilization, including IMF support under an $8.1 billion lending program. The IMF recently completed a review that paves the way for a new disbursement tranche.

Pyshnyy told Reuters that foreign aid flows are expected to decline gradually if security conditions improve, increasing the importance of private investment.

“We need private capital. And private capital requires infrastructure,” he said, adding that Ukraine is working on legislation to revive and expand its domestic stock market.

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