23 Apr 2020 15:13

Critical accumulation of bad debts, breakdowns and failures in banks' operations cannot be allowed - Putin

MOSCOW. April 23 (Interfax) - Russian President Vladimir Putin announced the need to ensure the stability of the banking system and prevent the critical accumulation of bad debts on the balance sheets of banks.

"And one more fundamental requirement - of course, it is necessary to ensure the stability of the banking system itself. We must not allow a critical accumulation of so-called bad debts, breakdowns and failures in the operations of banks. In order to reduce risks and strengthen the mutual trust of participants in economic life, we have already envisaged a number of tools, including guarantees from the Finance Ministry and VEB on preferential loans and other banking products," the Russian president said during a meeting with the leaders of major Russian banks.

The meeting was attended by Central Bank of Russia (CBR) Governor Elvira Nabiullina, Sberbank CEO Herman Gref, the head of state bank VTB Andrey Kostin, the head of Promsvyazbank Pyotr Fradkov, the chairman of state corporation VEB.RF Igor Shuvalov, and the chairman board of directors of Alfa Bank and co-owner Pyotr Aven.

Putin asked the government, the CBR and the banking community to think about what else could be done to ensure the reliability of bank loan portfolios while not increasing the burden on borrowers.

"Banks feel the pulse of economic life faster than statistics; all processes taking place in the economy are directly reflected in the banking system. Therefore, I ask the representatives of the banking community [to share their] assessments of the current economic situation and forecasts for the future," Putin said.