Anatoly Aksakov: ‘They pile up term deposits, and then the state will have to pay’
The head of the State Duma’s Committee for Financial Market offered to restrict the access of small banks to irrevocable deposits arguing with Vice Chairman of the Federation Council Nikolay Zhuravlyov
“Those who will want to invest money in term deposits will get a high rate. But the decision has to be made quicker,” First Vice Board Chairman of Sberbank Alexander Vedyakhin hurried the regulator on 22 September to elaborate a new bill. Heads of Sber, VTB, Promsvyazhbank talked about what scenario the Russian banking system will transform with at the Banks of Russia — 21st Century International Banking Forum in Kazan. Rejecting the “Iranian” model of bypassing sanctions, bankers were in favour of strengthening the role of the state as guarantee of granting a loan to restructure the economy. Read more in Realnoe Vremya’s report.
“We have talked with Mr Kostin”
The banking forum opened in Kazan the next day the partial mobilisation of citizens to participate in the special military operation was announced, which changed the general tone of speeches of representatives of the banking community. It seemed they were in shock but, of course, they maintained a facade and were tired of repeating that the Russian banking system would withstand another blow.
“It is necessary to move forward despite all the problems arising on the path of our country,” head of the State Duma’s Committee for Financial Market Anatoly Aksakov encouraged the audience at a panel discussion.
Before the start of the discussion, the moderator of the session congratulated VTB’s CEO Andrey Kostin on his birthday and gave him a bunch of flowers. “We have talked with Mr Koston. I asked him about his mood on his birthday that coincided with the well-known events. He replied very vividly that we always moved forward and we had already gone through something like this,” Aksakov called people upon not to be sad.
Later, the parliamentarian noted that the banking sector prepared for the shock of sanctions well enough, but serious transformation awaits it.
“The reports of the Central Bank (Editor’s note: on upcoming transformations) caused a positive effect in the banking community. But discussions showed that the measures in them are rather aimed to destimulate currencies of unfriendly countries and there are few proposals to stimulate the economy,” noted Aksakov in his brief introduction.
Now approach to the regulation of the banking activity will change to stimulate banks to actively grant loans to restructure the economy. Producers were concerned about how to set banks’ face to the Russian economy earlier, and now they cannot survive without it, Anatoly Aksakov gave the audience to understand and offered heads of federal banks to express their opinion about the place of banks in the new economy.
Birthday man Andrey Kostin was given the floor first, but he deviated from the main agenda focusing on an urgent issue. The VTB board chairman named the creation of an alternative system of international settlement with friendly countries independent from American SWIFT a number one task. He explained why Russian banks turned out to be cut off from correspondent accounts.
“Our foreign partners didn’t show interest in creating the infrastructure because the dollar and euro were the main settlement currencies. As a result, they accounted for a gigantic part of payments. It seemed then that there was no real need to replace them. The process of development of alternative ways of payments progressed slowly, and now it became a number one task,” Kostin noted.
Mir card doesn’t use the dollar
According to him, the topicality of this task is obvious. Russia won’t stop being a country with great export potential, also, imports need to be organised. VTB CEO Andrey Kostin urged the audience to make transactions in currencies of friendly countries to bypass blocks of transfers in dollar and euro, while barter schemes — coal in exchange for bananas — are not acceptable. “It is necessary to set payments to politics when our financial institutions will be under sanctions,” the VTB president noted.
Meanwhile, the first attempts of replacing SWIFT faced an illegal opposition of the USA. Mir card doesn’t use the dollar in settlement, but because of the USA’s pressure, friendly countries refuse this instrument.
“According to all laws, if we can talk about laws now, what the American administration is doing to the Mir card, it is complete lawlessness. Americans have always said that sanctions apply to those spheres of financial activity where the dollar was used like if it was dollar, it was their territory, their sovereignty. But the Mir card doesn’t use the dollar at all and it doesn’t meet the criteria to be affected by the US sanctions policy,” he was indignant.
He stressed that the States haven’t yet imposed sanctions on the Mir card but they have gone to Turkey, Vietnam, Kazakhstan and “we see that friendly countries are refusing this instrument we hoped to develop.” The head of VTB thinks that the remaining sector of the economy that hasn’t been imposed sanctions “will get smaller,” therefore it is necessary to switch to alternative payments in national currencies.
Pyotr Fradkov about “Iranian model” and “economy able to overcome”
Unlike him head of Promsvyazbank Pyotr Fradkov sees wider prospects of banks. In his opinion, it is the ability of “combining commercial interests with the performance of state tasks in the development of critically important sectors.” He is convinced that the previous model when banks worked to attract foreign capital, accumulate and do settlements is exhausted.
“Earlier, the banking system was integrated in international chains of capital attraction. The banking system isn’t able to satisfy the needs of the current economy anymore,” he noted.
At the same time, Pyotr Fradkov admitted, banks are in a difficult situation because of fro\en international payments and foreign assets.
From his perspective, now there are two models to get out of the “sanctions shock.” “The Iranian model is first. It is an economy of opposition when the banking system looks for ways of bypassing sanctions. Iranians developed a big number of different formats that allow bypassing sanctions. I don’t know, is it our path?” Fradkov doubted.
The Russian authorities rest on the economy of overcoming, that’s to say, the search for new opportunities relying on their own capabilities, claimed the head of PSB. In this model, banks must perform a new role. “It is a combination of commercial banks and state tasks to develop critically important sectors,” he explained. It is the launch of new financial products that would help investors to promote products in friendly countries’ markets. According to him, now it is necessary to focus on “quickly filling a deficit of resources that are necessary to keep the technological sovereignty, service new export routes.”
Alexander Vedyakhin, Serbank: where to get “long money”
What to do and where to get long-term resources the economy cannot be restructured with? First Vice Board Chairman of Sberbank Alexander Vedyakhin who delivered a speech via teleconference expressed Sberbank’s position. He sees citizens’ savings that can be used for term deposits as one of the sources of “long money.”
“We have discussed this issue for a long time. Those who want to invest money in term deposits will get a high rate. But the decision has to be made quicker,” he hurried the regulator to accelerate the creation of a new bill.
Now the Central Bank is working on the idea of term deposits and examining what part of the deposit can be guaranteed by the state. Term deposits are profitable for the bank because they have a predictable interest risk.
The discussion heated up after a speech of Vice Chairman of the Federation Council Nikolay Zhuravlyov who claimed the necessity of “giving access to all banks to open this kind of deposits” but introduce requirements for the quality of assets. Aksakov immediately disagreed with him.
“There is a risk that they [small banks] will pile them [term deposits] up, and then the state will have to pay the liabilities,” noted the head of the Duma’s Committee for Financial Market.
As a result, they decided to discuss this topic in Moscow.