Tight monetary policy conditions will not upset financial stability, companies have safety margins - Russian Central Bank

MOSCOW. Nov 1 (Interfax) - Tight monetary policy conditions will not upset financial stability, and Russian companies have accumulated safety margins, the Central Bank of Russia's head of financial stability Yelizaveta Danilova said.

"Our companies have sufficiently large margins of stability, and we don't think that our tight monetary policy conditions will have negative consequences for financial stability. We will have the option to ensure a soft landing," Danilova said at a meeting of young economists.

Corporate lending continues to grow despite the rise in rates, she said. "We need to see the growth of lending slow down to reach our inflation targets," she said.

Amid high rates, less efficient companies with higher debts will not be able to attract loans as actively as they could before, she said. "Amid our restrictions on the labor market it will probably be a blessing for the economy if a certain redistribution towards more efficient companies occurs," she said when answering a question as to whether the regulator sees risks of some inefficient companies going bankrupt.

The CBR is making sure financial instability does not develop, and so that potential credit risks are covered by banks and don't have systemic effects, she said.

The bank is also paying greater attention to floating-rate loans, which make up two thirds of the corporate portfolio. "In previous years and previous periods of tight monetary policy, we really didn't have such a high proportion of loans with floating rates. So we're carefully following what's happening in the portfolios," she said.

The bank is currently not seeing a major rise in the restructuring of corporate loans. The share of problematic loans overdue by more than 90 days is minimal. "But we undoubtedly need to keep an eye on this," she said.

The current situation should not be compared to 2008, when there was a global financial crisis, she said. "Now we are taking measures to tighten monetary policy amid rapid growth of the economy [and amid] a rapid, but not overheating, growth in lending," she said.