Russian central banker briefs Putin on recent Moscow money market turmoil
[Presenter] Almost immediately upon his return to Moscow from [the G8 summit in] Sea Island, where the global economy
was discussed, the president met Sergey Ignatyev, the head of the Central Bank. Vladimir Putin asked about the situation
on the interbank market, which was unnerved by the Central Bank's decision to rescind one bank's licence for
breaches of the law. Ignatyev described the concerns as subjective. Someone simply got the jitters, he said. The banking
system is healthy but needs a clearout.
[Ignatyev] Our banking system is sound. I think it is stronger now than a few days ago, which is in part due to the
Central Bank's measures to improve regulation in the past days. We are doing a lot of work to counter the
legalization of criminal proceeds, including via the banking system. Unfortunately, we've had to take fairly tough
action. For example, in May we rescinded the licence of a Moscow bank for breaches of the law. Unfortunately, this
affected what I would call the psychological mood of bankers in Moscow and some imbalances appeared on the Moscow money
market. We're in control of the situation. There are no real grounds for them, the reasons are purely
psychological.
[Putin] How do you interpret the tension that has arisen in the banking system? Could it have been deliberately
provoked by specific groups as a form of protection against Central Bank action to ensure compliance with legislation on
money laundering and other illegal business?
[Ignatyev] I don't know. But the thought had occurred to me.
[Putin] Without doubt, order must be imposed. But I ask you to proceed with caution. There mustn't be any
large-scale or precipitous purges of the banking system. I hope you weren't planning anything like that. It should
be a systemic and cautious process, and I repeat again that whatever you do you must bear in mind the interests of
[ordinary] people.
|
RUSSIA IN FACTS
