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WTO to Sustain Russia’s Banks
The bank system of Russia is nearing optimal loading, the role of foreign capital is still increasing and Russia is likely to need full-scale investments in bank capitals in two or three years, the Central Bank of Russia (CBR) said in its Bank Sector Survey promulgated past Friday. Exactly the need for money could explain softer standing of the Kremlin in WTO negotiations with the United States.
The capital adequacy is steadily going down in bank system of Russia, signaled the Bank Sector Survey promulgated by CBR on Friday. As of October 1, 2006, the ratio of capital base to assets weighed by risks was 14.8 percent (vs. 16 percent on January 1, 2006 and 19.1 percent on January 1, 2003). The bank is deemed stable if the indicator exceeds 10 percent, according to CBR.
Another indicator of capital adequacy is ratio of fixed capital to assets weighed by risks, and this value is also the record low now – just 10.7 percent. In other words, the bank system of Russia is nearing optimal usage of capital and may face shortage in a given time.
But foreign banks will help tackle the problem, signaled the survey of Russia’s bank authority. As of October 1, 2006, the total capital base of banks controlled by aliens covered 12.6 percent of the aggregate amount (9.3 percent January 1, 2006 and 7.1 percent on January 1, 2003). The capital growth was at least equally illustrative in the banks with 100-percent ownership of foreigners. Their total capital base accounted for 9.8 percent of the aggregate (9 percent and 5.4 percent respectively).
According to Economic Development Minister German Gref, the pact sealed by Russia and the United States on bilateral terms for Moscow’s entry into the World Trade Organization implies liberalizing the access to financial markets. The statement released by the office of the U.S. Trade Representative was more explicit. It made clear that Russia had sanctioned the 100-percent foreign ownership in banks, broker’s offices and capital companies.
www.kommersant.com
All the Article in Russian as of Nov. 20, 2006
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