Current trends in debt policy of city councils and directions of its improvement

The need to rethink the role of urban debt policy in accordance with the growing needs of urban communities and their sustainable socio-economic development is identified. In Ukraine, the legal preconditions for the formation of cities' own debt policy and the implementation of borrowing in both domestic and foreign nancial markets. The current state of local budgets and decentralization processes only highlight the need for cities to develop debt policy. The formation of the institution of local borrowings in Ukraine is analyzed and an in-depth analysis of borrowings of city councils in 2014-2019 is carried out with the definition of three periods: 2014-2015 - increase in borrowed funds, but such borrowings were formed mainly due to debt activity of Kyiv City Council domestic local bonds; 2016–2017 - decrease in the amount of borrowed funds, which occurred under the inÀuence of macroeconomic, political and fiscal instability; 2018-2019 - resumption of debt activity of city councils that had experience of borrowing in the previous, relatively analyzed, period and diversification of forms of local borrowing. Based on the cluster analysis, the main characteristics of the modern debt policy of city councils of Ukraine, which is based on the di൵erentiation of city councils-borrowers, are determined. The main borrower remains the Kyiv City Council (the share was about 67%), the activity of borrowings was noted in the following city councils: Zaporizhia, Dnipro, Lviv, Odessa, Ivano-Frankivsk. It is established that the debt policy of city councils is based on raising funds from NEFCO, state-owned banks and the Ministry of Finance of Ukraine. Improving the debt policy of city councils of Ukraine should be based on the synergy of actions of central government agencies: (Ministry of Finance of Ukraine, Debt Agency of Ukraine, NBU, National securities and stock market commission (NSSMC)Financial Control Ofice, etc.) and city councils. Vectors for improving the debt policy of city councils should be an integral part of the Strategy for the Development of the Financial Sector of Ukraine until 2025 and meet its key strategic goals and directions.