15 Jul 2009 16:07

Second wave of crisis to only affect banks

MOSCOW. July 15 (Interfax) - Russia will see a second wave of the financial crisis in October-November 2009, but it will only affect the banking sector, Troika Dialog President Pavel Teplukhin said.

Teplukhin said that 90% of the payments on loans issued just before the financial crisis are due between mid-October and mid-November since most of the loans were issued for one year. "Companies won't be able to pay. As a result, there will be an accounting operation called 'the second wave'," he said at a press conference on Wednesday.

Banks will either have to write off past-due debt or classify it as bad loans, which would lead to a sharp reduction in funds at Russian banks, he said.

The only way to combat the crisis will be to compile a balanced budget under which expenditures would decline in accordance with the reduction in income, he said. "It should be remembered that with oil prices at $60 per barrel in 2003-2004, we were living extremely well. There was just a different level of consumption and a different level of state budget expenditures," he said.