Page 15 - RUSRptSept18

($96mn) of guarantees, which is nine-times higher than the bank's own funds. In other words, the bank’s business was a variant on a pyramid scheme.
"The formal approach used by the bank to evaluate the activities of the principals ultimately led to a significant increase in the current year losses related to the fulfillment of obligations under the guarantees provided, including in the courts," a CBR statement reads.
The Bank conducted a risky credit policy, which led to the formation of a significant amount of low-quality assets on its balance sheet, the report said. The Central Bank revealed a significant decrease in the bank's own capital and saw a threat of bankruptcy.
Over the past year, the Central Bank has applied four measures to the Central European Bank for supervisory purposes. The bank's owners did not take measures to normalize its activities, the regulator stresses. The Central European Bank is a member of the deposit insurance system and the state is obliged to bail out its depositors if the bank goes to the wall.
2.7 Putin’s good cop softens the pension reform
After two months of silence Russia's President Vladimir Putin came out with a televised address to the nation on August 29, in which he scaled back the controversial, long overdue, and widely unpopular pension reform that hikes the retirement ages for Russians from Soviet era lows.
In an address that was drum-rolled in a PR build up by the Kremlin, Putin cut back the retirement age increase for women that had hiked the retirement age by eight years from the current 55 to 63 but now Putin has scaled it back again to 60 years. He also introduced a number of other compensatory measures that were immediately picked up by the cabinet and the parliament.
Putin has staunchly opposed a retirement age hike throughout his 18-year rule and since the pension reform was launched in 2018 Putin commented on it only once , but then he did not categorically denounce it. The original bill currently in the State Duma proposes hiking the retirement age for women to 63 and for men to 65 by 2034, from 55 and 60, respectively. The Ministry of Finance has said previously that he change is necessary as with Russia’s deteriorating demographics it is afraid of pension payments overwhelming the state finances in the coming years.
In the address Putin said that the reform "could no longer be postponed", and urged the people to "treat with understanding" the "difficult, but necessary
15 RUSSIA Country Report September 2018 www.intellinews.com