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Operators of international payment systems must be ‘brought to senses’ - Medvedev

April 22, 2014, 16:00 UTC+3 MOSCOW
Earlier, as a part of sanctions against Russian banks, the Visa and MasterCard payment systems topped servicing cards issued by the Rossiya and SMP banks
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© ITAR-TASS/Aleksandra Mudrats

MOSCOW, April 22. /ITAR-TASS/. Russian Prime Minister Dmitry Medvedev said on Tuesday it was necessary to bring into account operators of international payment systems in order “to bring them to senses.”

Addressing lawmakers of the Russian parliament’s lower house, the State Duma, Medvedev said it was illegal to cut off a number of Russian banks from servicing plastic cards of international payment systems.

“This must not go unpunished,” the prime minister said.

“We need to imply efforts and means in order to bring to senses relevant contractors so they would not be hiding behind various force majeure actions and presidential or parliamentary decisions,” Medvedev said.

The Russian prime minister said operators of international payment systems should act in line with international norms.

 

Sanctions against Russian banks

Earlier in the year, the United States imposed sanctions against the Rossiya Bank and SMP Bank. As part of these sanctions, the Visa and MasterCard payment systems stopped servicing cards issued by the Rossiya and SMP banks. Both plastic card payment systems are American and are subject to regulations of the US authorities, which passed a set of sanctions against Russia over Moscow’s stance in regard to Ukraine.

Following the incident with the operators of international payment systems, Medvedev announced that Russia will establish its own national payment card system on the basis of a new open joint-stock company, the controlling stake in which will be held by the Russian Central Bank.

The United States and the European Union imposed a set of sanctions against Russia following its merger with Crimea.

 

A new multi-currency system

We want to invest our funds in something else, but the question arises in what? Even our friends in China which have much larger gold and foreign currency reserves than we have, but ours are also quite big, they keep their monetary funds in securities which are nominated in US dollars and euro all the same Dmitry Medvedev Russian Prime Minister Russian Prime Minister Dmitry Medvedev believes that the world needs a new multi-currency system of reserve currencies with all financial players involved and abolition of the Bretton Woods system (the Bretton Woods system of monetary management established the rules of commercial and financial relations among the world’s major industrial countries in the mid-20th century). The rouble should be turned in a reserve currency, the prime minister said in reply to questions of lawmakers of the State Duma lower house of parliament on Tuesday.

The prime minister believes that the modern financial world is formed in a way of no optimal decisions in which currencies gold and foreign currency reserves should be kept. “But we want to invest these funds in something else, but the question arises in what? Even our friends in China which have much larger gold and foreign currency reserves than we have, but ours are also quite big, they keep their monetary funds in securities which are nominated in US dollars and euro all the same,” Medvedev noted.

“Meanwhile, we bear all consequences of development of American economy and European economies,” he noted.

The prime minister believes that in the future it is needed “to create a better balanced currency system,” Medvedev said, adding that “I refer to a system based on a multi-currency system of reserve currencies when stores of value are not only US dollar and euro, but also other currencies.”

For this purpose “all countries which are main economic players should reach an agreement,” he said. “If we succeed to form this financial system and this is actually abolition of the Bretton Woods Agreements which were reached after the Second World War we will receive a fairer financial system and an opportunity to invest our gold and foreign currency reserves in other currencies,” the prime minister noted.

He also said with confidence that Russia “should seek for the rouble to become a reserve currency.” “For this it is needed to shift trade in roubles, including trade with primary commodities,” Medvedev added.

 

Standard of living

Russian Prime Minister Dmitry Medvedev believes that Russia has a unique chance to bring the standard of living in Crimea and Sevastopol to a decent level.

"Our country has grown larger this year," Medvedev said. " It is a unique story and this story has given us a unique chance to ensure comfortable and decent life in the Republic of Crimea and Sevastopol while continuing to develop all other regions, towns and villages of our country." "The government is hoping for your help," said Medvedev addressing the deputies. "We all work towards making Russia stronger, richer and freer."

The premier urged the parliamentarians not to fear the coincidence of serious domestic and external challenges using them to Russia’s advantage instead. In his speech, he cited from Pyotr Stolypin, leader of the Duma (1906-1911) who had maintained that countries that came under powerful blows showed vitality only when they took up their revival with great vigor and willingness.

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