Russian accession to WTO expected to have little impact on banking sector - CBR
MOSCOW. April 23 (Interfax) - Russia's accession to the World Trade Organization will have very little to no impact on the condition of the country's banking sector, Central Bank first deputy chairman Alexei Simanovsky said Monday.
Simanovsky, speaking at a round table discussion in the State Duma on protection of Russia's financial sector after WTO accession, said there are a considerable number of banks with foreign capital in Russia. The share of nonresidents in the combined charter capital of Russian banks reached 4.7 trillion rubles in 2001 and has grown to 5.2 trillion rubles this year. Banks of nonresidents held 11.6% of retail deposits, and accounted for 21.7% retail loans; they are even more active on the interbank lending market, where their share is 28%.
Simanovsky said the priority for Russia's banking system in terms of international integration is still the adoption of the principles of Basel II and Basel III.
He said the Central Bank is currently focused on further developing the system for assessing protection from risks.
The Central Bank, for example, believes that close relations between the shareholders of a bank and its top executives is a risk factor, Simanovsky said. If a situation arises where poor management decisions are possible, a question will arise about the bank's understanding of its objectives, which cannot be aimed at solving problems related to financing of side projects.
A commercial bank, as an institution, has its own goals and objectives, including the job of meeting the interests of clients and depositors, Simanovsky said.
Simanovsky also said that the Central Bank insists on the legislated preservation of a 50% quota for nonresident banks' share in the combined charter capital of Russian banks.
Simanovsky also supported legislative restrictions on the operations of foreign bank branches in Russia, saying that in most jurisdictions "a branch of a bank is not a legal entity and is regulated by the oversight body of the location of the bank's head office." Thus, the activities of branches that are opened without establishing a legal entity are regulated by foreign legislation.
