Financial Markets: Increasing Complexity, Maintaining Stability

3–5 July 2019, ST. PETERSBURG

    The Bank of Russia does not purposefully pursue the policy of nationalization of the banking sector, said Elvira Nabiullina, Governor of the Bank of Russia, during the discussion at the International Financial Congress.

    “There is no policy targeted at increasing the government share in the banking sector and other sectors. There are circumstances that prevent us from reducing the role of government,” Nabiullina said.

    According to her, the Bank of Russia closely watches that supervision and regulation is equal for private and state-owned banks, and that access to public resources is equal as well.

    It must be mentioned that in February during the meeting of the interregional banking council in the Federation Council, the Speaker of the Council Valentina Matviyenko reported that the Bank of Russia's “cleaning” of the banking sector led to decreasing competition in the sphere and to the monopoly of large banks, many of which are state-owned banks. According to Matviyenko, the Bank of Russia and the financial authorities should closely monitor the correlation of public and private banks. Nabiullina answered then that the Bank of Russia was not going to stop the process of recovery of the banking sector out of fear to governmentalize the system. Nabiullina noted that the Bank of Russia would try to bring the banks to the market after sooner receivership.

    Meanwhile, the governmentalization of the Russian economy is one of the key issues raised by both independent economists and Russian government officials. According to the estimates of the Federal Antimonopoly Service (FAS) for 2015, the state controls 70% of the economy, compared with 35% in 2005.

    Receivership of Otkritie FC, Binbank and Promsvyazbank increased the share of the economy’s public sector by 0.2–0.3%, said Alexei Kudrin, Head of the Centre for Strategic Research.