Читать книгу Putin's Russia - Группа авторов - Страница 38

In recent years, Russia’s banking system has been going through a systemic crisis. Some believe it has extremely large “banking holes”. In 2013, the Bank of Russia launched a “clearance campaign” revoking the licenses of banks non-compliant with regulatory requirements. The campaign revealed significant discrepancies in the real and book value assets, and capital structure problems attributable to inefficient management practices and highly risky credit policies. In some instances, bank managers provided loans to fictitious one-day paper companies, purchasing assets that had no real value to attract, or off-balance deposits (Katasonov, 2018). The collapse of domestic private banks, particularly the failure of Otkrytie and Binbank in 2017, exposed banking holes of this sort, calling into question the quality of the Bank of Russia’s macroprudential control and supervisory function.

In the past 17 years, 2,600 out of almost 3,000 registered banks have lost their licenses due to dubious transactions such as money laundering and tax evasion. Many of these banks were established in the 1990s, and were controlled by industrial capital (including that of oligarchs) that focused on the capital accumulation to finance shareholders’ purchases of privatising enterprises rather than providing intermediary functions in the financial market. Some banks that survived the 1990s were hard-hit by the 2008 financial crisis.

Many banks at present are still engaged in illegal transactions and asset-stripping as these activities are far more profitable. Continuous efforts by the Bank of Russia to establish market discipline have led to excessive regulations that make it difficult for many Russian banks to operate legally. In such conditions, many banks issued loans with fake collateral, overstated their assets value, inflated formal capital through structured transactions with affiliated companies and prioritised investing into corporate and sovereign bonds as these investments generate larger profits than investing in the real sector (Movchan, 2018).

The major reasons for the systemic crisis in the banking sector are as follows: (1) rapid expansion through domestic M&A of banks with financial problems; (2) international sanctions; (3) sharp decline in petroleum prices; (4) ruble devaluation and (5) high number of bankruptcies and increased non-performing loans (Guarino, 2017). In particular, a sharp decline in petroleum prices reduced the amount of funds allocated to banks and significantly hurt their cash flows. A depreciating ruble and rising inflation aggravated the liquidity problem of many banks and international sanctions deprived many banks of opportunities to attract cheap financing from traditional international capital markets.