Top 100 banks saved from bankruptcy
Since October 1, 2008, Russian banks have repaid $50 billion worth of loan payments, Finance Minister Alexei Kudrin said at a banking conference in Moscow today.
"Russia's top 100 banks have been saved from bankruptcy," he stated. Describing the overall situation in the country's banking sector, Kudrin said it had stabilized thanks to the Central Bank's efforts. To illustrate his statement, he cited Russia’s international assets and liabilities of approx. $147 billion and $150 billion, respectively. The fact that the figures have come so close to each other is a sign of stabilization, according to the minister.
Vnesheconombank chairman Vladimir Dmitriyev informed the conference members that his bank was prepared to provide an additional RUB 50 billion to RUB 60 billion (approx. $1.5bn to $1.8bn) in subordinated loans to Russian banks. Vnesheconombank has issued RUB 257 billion (approx. $7.6bn) in subordinated loans, which are provided on terms of co-financing by shareholders and on the condition that the funds will be lent to real sector companies.
The Finance Ministry and the Central Bank do not see any point in creating a fund of bad assets, Kudrin said. "We have taken a cautious stand, watching developments on international markets," he explained.
Europe and the United States adopted two different approaches: the U.S. has to set up a fund for problem assets, but in Europe an individual approach is applied to each bank, according to Kudrin.
"The problem of buying bad assets is the problem of the price for bad assets," he said. At this point, the Central Bank and the Finance Ministry see no need for such a fund, preferring instead an individual approach to each bank.
Source: RosBusinessConsulting
Date: 23.06.2009 [ID: 226]