The banking crisis in Russia in the current economic situation will be massive, CEO of Russia’s largest lender Sberbank German Gref said on Wednesday.
“Of course, it’s obvious that the banking crisis will be most massive,” he said on the sidelines of the annual Gaidar Forum.
Since mid-2014 Russian banks have publicly announced they are having problems with currency liquidity due to sanctions and growth of bad loans because of the situation in the economy. The Russian Central Bank consistently introduced new mechanisms of providing liquidity, including non-standard ones, in a move to support banks in difficult times. Also, the government made a decision to increase the capital of Russia’s banking sector by $15 bln.
At the end of last year Russian President Vladimir Putin signed a law envisaging sovereign bonds worth up to $15 billion (1 trillion roubles) to be sent by the government to the national Deposit Insurance Agency to increase the Russian banks capital. According to First Deputy Prime Minister Igor Shuvalov, this will insure the banking sector and the economy as a whole against additional risks.