Does Russian banking face troubles?
While some economists suggest that bankers may be exaggerating the problems in order to win more cheap state funding, most agree that bad loans are set to surge. Y.Gavrilenkov, the HSE expert, mentiones some aspects of the problem.
Yevgeny Gavrilenkov, the HSE professor and the chief economist at Troika Dialog, says the real situation will not be clear for a few months, when the dust settles on a surge in non-payments during December and January, when the central bank accelerated a step-by-step devaluation.
"The banks need two to three months to restore balance sheets that were distorted during the devaluation," he says. Mr Gavrilenkov insists the market should be left to its own devices in weeding out inefficient banks.
Already, market forces are putting pressure on the weakest: until the central bank yanked up refinancing rates above inflation to stem the run on the rouble at the end of last year, Russian banks had been used to borrowing money on the interbank market at rates far below inflation, essentially for nothing.
Bankers complain the high interest rates are a choke on lending. But Mr Gavrilenkov says it is now up to the government to rein in inflation, which is still sky-high at nearly 14 per cent, so that the rates could be lowered. "Only then will lending be renewed and the economy revived," he says.
From the Financial Times
How has the crisis influenced the banking sector? Why is the Central Bank increasing its requirements from bankers? How many banks does the economy need altogether? These were the topics discussed by Mikhail Kovrigin, director of the Central Bank of Russia’s Banking Regulation and Oversight Department, at a meeting with members of the HSE Banking Institute.
The HSE has held the fourth annual workshop ‘Banking in Emerging Markets: Challenges and Opportunities’, organized by National Research University Higher School of Economics (CInSt HSE) with the support of the Bank of Finland Institute for Economies in Transition (BOFIT).