Russian banks making recovery

Russian banks are making a recovery and the Central Bank is planning to scale down the government support to the banking system, which can overcome the financial crisis on its own. The first vice-chairman of the Central Bank, Alexei Ulyukaev, made this statement at an international banking forum in Sochi.

The Central bank has started rounding up the government’s support for the Russian banking system because the banks have accumulated sufficient sums to solve their own problems. Experts forecast that the total sum of credits issued by the banks will grow ten percent by the end of the year. During the global financial crisis, the Central Bank took several measures that have helped the banks to preserve their capitalization and fulfill commitments to the clients.         

At present, the situation in the banking system is stable, a Russian MP, the president of the Association of Regional Banks, Anatoly Aksakov, says.

“The government has several tools to interfere in the situation swiftly, if unforeseen processes start in the economy and finances,” says Anatoly Aksakov. “However, the banking system is quite strong since its capital and liquidity are at a very high level. The assets of banks have increased, and crediting has grown. In these circumstances, the Central Bank can round up its anti-crisis measures,” Anatoly Aksakov said.

Alexei Ulyukaev also said that the Central Bank would gradually scale down the refinancing of commercial banks under mutual guarantee. The Central Bank will stop supporting banks borrowing against credits given to systemically important enterprises. Among these are the state-run natural gas monopoly, Gazprom and the Russian Railways. The Central Bank plans to put an end to giving unsecured loans since debt of banks in these loans has fallen 200 times this year.  This is evidence that the banking system has overcome the crisis.

However, it’s too early to say that the situation has returned to normal. The global financial system, where Russia is an integral part, has not achieved pre-crisis stability yet. But, most likely, there will be no global upheavals in the near future.