7 September 2022
KEY
CONCLUSIONS
The Russian banking sector coped with
the first stage of transformation under the sanctions, which was greatly
facilitated by the policy of the Central Bank
“The changes [in Russia's economy caused by the introduction of the
European sanctions – Ed.] are so extensive and so deep that the adaptation of
the financial and banking sectors to the new reality will take more than a
year. <...> But the adaptation is already happening. <...> Even the
financial indicators of the banking sector have started to change. <...>
VTB also started working at a profit in July. The most important thing is that
we managed to avoid the mass default of our clients. <...> Regarding rouble
settlements... the day-to-day operations with credit cards and even online
banking were not seriously affected, so much so that customers would not
suddenly feel the changes,” Andrey Kostin, President and Chairman of the
Management Board, VTB Bank.
“The initial shock has subsided.
The Central Bank of Russia helped a lot. <...> I think the government of
the Russian Federation made the right call to introduce a moratorium on
bankruptcy and support the backbone [enterprises – Ed.],”
Ilya Torosov, First Deputy Minister of Economic Development of the Russian
Federation.
“Today, the financial and banking
markets work roughly the same way they did a year ago: a great appetite for
bonds, a good competitive environment in lending. <...> In general, the
situation is dynamic,” Mikhail Oseevskiy, President, Rostelecom.
“We learned how to implement
anti-crisis policies quickly. The Government and the Central Bank were quick to
take decisions, such as regulatory relief, various breaks, the moratorium on
bankruptcy... preferential lending programmes, which certainly helped our
industries to withstand,” Nikolai Zhuravlev, Deputy Chairman of the Federation
Council of the Federal Assembly of the Russian Federation.
The
volume of banking operations in national currencies will grow
“Obviously, the world's
leading currencies – primarily the dollar and the euro – have discredited
themselves. Now, the whole world has seen ‘who is who’. This will certainly
stimulate even non-sanctioned countries to switch to national currencies. This
will stimulate the creation of economic macro-regions. At the same time, the
longer this will last [the sanctions – Ed.], the greater will be the share of
settlements in national currencies. We can already see in Russia that during
the last six months settlement in yuan has increased from 0.4–0.5% to over 20%,
while only a few months have passed,” Nikolai Zhuravlev, Deputy Chairman of the
Federation Council of the Federal Assembly of the Russian Federation.
“The dollar and the euro
will no longer have such power [as before – Ed.] in the international financial
system. <...> The yuan, the rouble, and other currencies will grow more
and more important,” Igor Shuvalov, Chairman, VEB.RF.
PROBLEMS
Difficulty in building long-term
strategies and the possibility of the Russian financial sector facing new
sanctions
“Several of the largest banks and more than half of the entire banking
sector are now under sanctions. [The possibility that] some banks would not be
under sanctions is an unlikely scenario. It is clear that new restrictions will
be introduced,” Igor Shuvalov, Chairman, VEB.RF.
“Long-term strategies are probably untimely today: it is very important
to be here and now, making the right decisions. But on the whole, it seems to
me that big Russian business has been seriously preparing. It was in good shape
when it faced the challenges that we are working with today,” Mikhail
Oseevskiy, President, Rostelecom.
“The liquidity cushion and the decisions of both the Central Bank and
the government helped cope [with difficulties in the banking sector after the
sanctions were imposed.] But the real transformation is still ahead. The most
important problem is the long investment process, our financing of investment
projects. Here we were very much dependent on Western financing, and now we
need to replace it all [with domestic resources and funds – Ed.] from friendly
countries,” Ilya Torosov, First Deputy Minister of Economic Development of the
Russian Federation.
SOLUTIONS
There will be changes in global
market operations, interoperability mechanisms, and other properties
“Frankly speaking, in the banking community we have agreed that
regardless of whether or not tough sanctions will or will not be imposed on the
entire banking sector, we need to act as if they will definitely be imposed,” Igor
Shuvalov, Chairman, VEB.RF.
“Our main stand is that the economy should be open. We have to gradually
move away from the Central Bank's easing with a clear understanding of how we
are going to move on according to Basel [the Basel Committee on Banking
Supervision document with methodological recommendations in the field of
banking regulation – Ed.],” Ilya Torosov, First Deputy Minister of Economic
Development of the Russian Federation.
“First of all, we need to restore confidence in the financial sector and
the financial market in the nearest future. Here it is very important [to maintain
– Ed.] the right rhetoric on the part of the government. <...> It is
necessary to bring back the transparency in the statements from our listed
companies, because the financial market is unthinkable without it. It is necessary
to develop the stock market. <...> It is necessary to restart individual
investment accounts, to make them a real tool for long-term investments of
citizens,” Nikolai Zhuravlev, Deputy Chairman of the Federation Council of the
Federal Assembly of the Russian Federation.
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