Russian Economic Development Minister sees no signs of banking crisis in Russia

MOSCOW, November 18. /TASS/. Russia’s Economic Development Minister Alexey Ulyukayev assumes that the current problems in the country’s banking sector cannot be viewed as a crisis, he said in an interview aired by the Rossiya-24 TV news channel on Wednesday.

"I would share the view of the representative of the Bank of Russia. There is enough liquidity, the level of deposits both of companies and population has growth by around 15% this year," he said, adding that the banks’ capital base "enables them to actively provide loans."

"It is a different matter that the demand for loans is not sufficient as interest rates are high. The level of interest rates itself creates risks of non-execution of obligations by borrowers. So-called non-performing loans appear… Those are ordinary working issues, which our banking society has got used to dealing with," the minister said, adding that "crisis" is not an appropriate work for describing the situation."

On Tuesday Chief Executive Officer of Russia’s top lender Sberbank said Russia is facing a massive crisis, adding that next year will not be simple for Russia’s banking either. According to Gref, the financial recovery procedure will take another several years due to tightened requirements to capital and from the viewpoint of introducing state-of-the-art technologies, transparency and risk management. This view was not shared by the First Deputy Chairman of the Central Bank Alexey Simanovskiy who said there are no signs of banking crisis in Russia. According to Simanovskiy, "it’s not a crisis but a challenging working situation similar to the one some time ago." "Hard evidence says that the situation is slowly getting better. There is evidence highlighting economic improvement, though weak and hardly visible," First Deputy Chairman said.