Page 58 - RusRPTJuly18

one borrower relying on infrastructure of another, over half of revenues of costs of one borrower accounting for another party, among others. At the same time the CBR officials maintain the right to rule on the relation between parties "based on their judgement." However, it is not clear how state companies and corporations will be treated by the new regulations.
The recently appointed head of Russia's Audit Chamber and heavyweight Alexei Kudrin is seeking to expand his mandate to include scrutiny of the CentralBankofRussia (CBR),V edomosti dailyandFinmarketsaidonJune 12 citing the chamber's Andrei Perchyan. The CBR spent over RUB2.6 trillion in capital injections and deposits on banking sector clean-up in 2017, and has now paused to recalibrate Russia’s regulatory framework. Sources told Vedomosti that CBR is resisting attempts by Kudrin's Chamber to be given the power to audit the central bank. Double-checking how the central bank spends trillions in the banking sector would be in line with Kudrin's goal of tying Russia's strategic development goals to the actual budget and overall Kremlin's economic focus on consolidation of domestic resources for a spending leap under President's Vladimir Putin's May Decree .
The Central Bank of Russia will revise the supervision mechanisms of banking and financial holdings , the head of the CBR Elvira Nabiullina announced at the International Financial Holding. The main reason for such revision is the bail out of large banks, and most notably Financial Corporation Otkritie. "Should the temporary administration [appointed by the CBR] have authorisation for all the holding, and not only the bank Otkritie, it would be much easier to find and return funds that were extracted [by the owners] through the holding," the governor argued as cited by Vedomosti daily. The banking sector clean-up waged under Nabiullina culminated in 2017 with $40bn worth of bailouts of some of Russia's largest private banks, such as Promsvyazbank (PSB), and FC Otrkitie, and BinBank (B&N Bank) through a specially designated fund. Malignant players are leveraging "regulatory arbitrage" between sectors, as well as between different entities in a single sector, according to Nabiullina. She named cross-sector deposits, risk shifting, deal and investment source concealment, mass sale of non-core risk assets as some of the practices that the CBR will seek to weed out. Most recently the head of the CBR argued that assets of the owners of the failed banks should pay for their bailouts . She estimated that so far the regulator recovered only RUB100bn in assets from former bank owners, while injecting RUB758bn in capital and RUB1.86 trillion worth of deposits. The numbers are final and additional capital and liquidity provisions are seen as limited.
The Central Bank of Russia (CBR) will revise the supervision mechanisms of banking and financial holdings , the head of the CBR Elvira Nabiullina announced at the International Financial Holding conference. The main reason for such revision is the bail out of large banks, and most notably Financial Corporation Otkritie . "Should the temporary administration [appointed by the CBR] have authorisation for all the holding, and not only the bank Otkritie, it would be much easier to find and return funds that were extracted [by the owners] through the holding," the governor argued as cited by Vedomosti daily. The banking sector clean-up waged under Nabiullina culminated in 2017 with $40bn worth of bailouts of some of Russia's largest private banks, such as Promsvyazbank (PSB), and FC Otrkitie, and Binbank (aka B&N Bank) through a specially designated fund. Malignant players are leveraging "regulatory arbitrage" between sectors, as well as between different
RUSSIA Country Report July 2018 www.intellinews.com