08 June 2004 04:35
Kozlov Tries to Calm Banks
The Central Bank on Monday moved to calm a banking sector jittery over the recent collapse of two major banks,
promising to inject cash into the interbank lending market to maintain its liquidity and stave off a run for
deposits.
But paranoia was still the order of the day, with banks cutting lending limits to one another, lists of possible
problem banks being circulated by e-mail and on the Internet, and some media warning of a looming crisis.
Analysts said it will take news of problems at a top bank to trigger a serious run for deposits and that the current
panic is a storm in a teacup, the result of ongoing banking investigations and uneven pools of liquidity on the
market.
Central Bank deputy chairman Andrei Kozlov sought to reassure banks that there was nothing to worry about.
"If the volume of liquidity continues to shrink, the Central Bank will refinance the banking system as much as
is needed," Kozlov said.
"There are no fundamental economic reasons to worry about. Of course, we have some questions for banks, but they
are of a routine nature," he said.
Alexander Timofeyev, chairman at troubled CreditTrust, the nation's 70th-largest bank in terms of assets, said
Monday that a timetable for paying out accounts will be decided by the end of the week.
It was unclear whether the bank has filed for bankruptcy. A bank secretary refused to comment.
The bank has closed its doors after a run by depositors spooked by its close association to Sodbiznesbank, which lost
its license on charges of money laundering in May. Thirty Sodbiznesbank depositors filed suit in a Moscow court Monday
demanding their money back.
"Nonresidents" took a total of $800 million out of Sodbiznesbank and CreditTrust last year -- in a possible
sign that management was stripping the banks' assets, Deputy Interior Minister Sergei Veryovkin-Rakhalsky told
reporters Monday. "It is no secret that there is a link between the two cases, and the name of the co-owner of
these two banks is no secret either," he said. The banks have a murky ownership structure but are believed to be
controlled by businessman Alexander Slesarev.
Veryovkin-Rakhalsky also offered reassurances, saying the Interior Ministry does not have a hit list of banks.
"I repeat again, there is no list and we are not chasing down banks," he said.
Speculation about a possible list grew when Internet reports that criminal lawsuits were being brought against top
managers at Guta Bank surfaced late week. The bank denied the reports.
"There are all sorts of rumors. ... What is happening is that competitors are taking advantage of the
opportunity to make the most of the negative PR," said Richard Hainsworth of the Rusrating bank rating agency.
Natalya Orlova, an analyst at Alfa Bank, said it would be a problem if speculation about any top 20 bank starts to
come true. "They represent a big share of interbank market volumes," she said.
Mikhail Matovnikov, an analyst with Moody's Interfax Rating Agency, welcomed the Central Bank's
announcement Monday but said it had been a long time in coming. "The Central Bank has pretended nothing was going
on for a long time," he said. "This situation is very risky; there are banks on the market that rely on
interbank financing."
Part of the reason for the bank's delay, Matovnikov said, might have been a legal precedent in which a Central
Bank employee was prosecuted for signing off on a bail-out loan for the ill-fated SBS-Agro after the 1998 financial
crisis.
"No one wants to carry out their normal banking activities and go to prison. They don't want to take a big
personal risk," Matovnikov said.
Hainsworth said there is no sign of a liquidity crisis. He said the actual number banks that depend on interbank
lending is "very low" and predicted that the market will pick up this week.
More worrying, Hainsworth said, is the effect all the bad banking news might have on public opinion.
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[The Moscow Times] |
RUSSIA IN FACTS
