Is everything okay with Russian banking system?
The Deputy Chairman of the Executive Board of Sberbank, Bella Zlatkis, commented on the situation in the Russian banking system.
According to her, "there is hardly a person who says that the banking system is fine." "The banking system is experiencing very great difficulties associated with the devaluation, and sanctions," she added.
Bella Zlatkis noted that the situation in which the banks are closing every week indicates a disease of the whole system, TASS reports.
"If two or three banks are being closed every week in the country, if this number increases every year, if dozens of banks have problems with capital and liquidity, I suppose that the banking system can hardly be called healthy," the deputy chairman said.
The deputy chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov, told Vestnik Kavkaza that he agreed that our "banking system is not entirely healthy." "If the economy is experiencing problems, the banks also have problems. Especially those who waged a not very efficient, competent, professional credit and fiscal policy," he said.
Another reason for regular closing of banks is the fact that those which violated the law and conducted dubious transactions are faced with the tough stance of the Central Bank, which has started to protect the system. "So, on the one hand, we can say that there is a problem. But in general, I believe that those who conducted a fair policy, and they are the majority, feel comfortable," the parliamentarian noted.
The expert expressed the opinion that in this situation it is necessary to resort to the carrot and stick approach. "Whether we like it or not, we need to get rid of dishonest banks," he said.
"Secondly, of course, we have to work with the banks in terms of methodological and consultative assistance. We recently have a situation where the Central Bank does not act as a mentor but more as an inquisitor. The honest ones must understand that in difficult times they will receive support," he continued.
"And the third thing, in my opinion, the controller operates too straightforwardly in the implementation of, for example, the Basel principles. The extension of these principles should only be extended to systemically important banks. The Central Bank has recently selected 10 banks, so let the Third Basel Accord be spread among them," Anatoly Aksakov concluded.
An associate professor of stock markets and financial engineering of RANEPA, Vasiliy Yakimkin, also believes that the Russian banking system "is coping with it on the whole." "But overall, it is not healthy that two or three banks are being closed every week. On the other hand, it shows the recovery process. That is, the Bank of Russia is cleaning the Augean stables of unscrupulous lending institutions. So it's great in some way, because now we have about 770 credit institutions and Germany, for example, has 400," he said.
"But in general, I think that as the whole economy is sick, the banking sector is sick too. The state allocated 1 trillion rubles a couple of months ago. I think in this situation the banks should rely on themselves, to stimulate domestic lending, domestic demand, to form reserves by deposits, by raising funds from the domestic market, but not to open foreign credit lines. I think that when we will have 500-600 credit institutions in the country, they will be bigger, and it will be much easier for them," the expert stressed.
In this situation, the state could help the banking sector saturating the liquidity of banks. "The basic direction of support is the state-owned banks, the top-10 banks or top-30 banks. But I think that we should support the first 300 banks to ensure healthy competition in the market," he said.
Changing the key interest rate may become another way to support the banking sector. "The next meeting of the Bank of Russia, which will decide on its reduction, will be on October 30th. And it seems that it could be reduced by 0.5%. And it will provide more cheap loans, and an increasing number of organizations will take loans. As soon as the loans will become more accessible, the banking system in Russia will begin to revive," Vasily Yakimkin concluded.