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Rise in volumes of credits in Russia may undercut stability of banks-FM

April 22, 2012, 12:21 UTC+3

In the minister’s words, “there are apprehensions that this can result in hamstringing stability of banks”

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WASHINGTON, April 22 (Itar-Tass) — A rise in the volumes of credits in Russia may result in hamstringing the stability of banks, said on Saturday Russian Finance Minister Anton Siluanov, heading the Russian delegation at a meeting of finance ministers and central bankers of G20 countries as well as at a session of governing bodies of the World Bank (WB) and the International Monetary Fund (IMF), which were held in the American capital.

Siluanov noted that “as to the share of credits with respect to the GDP, Russia lags far behind other countries”. At the same time, he admitted in an interview with a small group of reporters that “we have registered in the recent past an increase in the volume of credits, especially mortgage and retail ones, in our country”.

In the minister’s words, “there are apprehensions that this can result in hamstringing stability of banks”.

The minister emphasized that “efficiency of surveillance by the Bank of Russia over credit institutions” is important in this case.

In turn, Deputy Finance Minister Sergei Storchak, addressing reporters on Thursday on the results of the Washington meetings of finance ministers of the G20 countries and BRICS (Brazil, Russia, India, China and South African Republic), admitted that the danger of overheating threatens the Russian economy.

“It was noted at the talks that it is important for states with forming markets, above all for Russia, to stave off bloating of the credit blubber. According to IMF statistics, the GDP of our country doubled over the past nearly ten years, while the aggregate sum of credits trebled,” Storchak noted. In the deputy minister’s words, “fund experts compiled a chart where the top line is occupied by Russia, while analytic assessments say that there is a great risk of overheating for forming markets as a whole and for the Russian economy in particular”.

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