Kremlin to tighten control over government’s financial support for banks
Highlighting the measures already taken by the government to support the economy in general and private business in particular, Igor Shuvalov, Russia’s first deputy prime minister, noted that the government has already disbursed sufficient financial resources to the banking industry to help boost liquidity that will enhance freer cash flow and settlement operations between banks and also enable them to provide sufficient loans to other companies in the economy.
“Today, we understand that the money granted to the banking sector is enough, and that banks have as much liquidity as needed to carry out all financial settlement operations and also grant loans to companies that need them,” noted first deputy prime minister, who was recently appointed by the Kremlin to oversee the Russian financial market hard-hit by the current global financial crunch. “However, our contacts with business representatives have revealed that the government’s financial bailout packages have not reached the real sectors of the economy. In other words, despite the fact that banks now have a huge cash supply, they are not providing loans in sufficient volumes that would enable cash-starved companies work normally,” he added. “We’ve reviewed this problem with Russian Central Bank (CBR), representatives of private banks and banks with state participations, so-called ‘the system banks’.”
In order for the government’s financial support to attain its stated purpose, the CBR has been ordered to grant additional authorities to its representatives that will enable them tighten their supervisory roles over how banks spend the government’s financial bailout. "It has been decided that the CBR will grant additional powers to its representatives who will work the management executives of private banks and oversee how the state’s financial resources granted to private banks via the Finance Ministry or CBR are being spent,” Shuvalov noted.
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