The Central Bank will print a trillion rubles to save private banks

Scale of the disaster

The Central Bank is accustomed to the official role of an excellent student. Still, he managed to realize the goal that seemed unattainable to most - he tamed inflation, lowering it below the cherished 4%. This is a showcase of the exhibition of achievements of the Russian authorities in the economy. As it turns out, with a spreading crack right in the middle.

The Central Bank is a mega-regulator not only because of the beautiful name (the US Federal Reserve or the ECB do not need the prefix “mega-”; no one doubts that they are the main regulators of the economy). Before the Bank of RUSSIA a fan of goals. He himself highlighted inflation, but there are others. This includes smooth fluctuations in the ruble exchange rate, and support for the real economy, and, of course, the reliability of banks.

Recent events, when large banks were already reeling - first Yugra, then Otkritie and Binbank (the list may well turn out to be open), showed that in the dispute between German Gref and the Central Bank about whether the Russian banking community is experiencing a serious crisis, about which the HEAD of Sberbank warned back in the second half of 2015, Gref turned out to be right.

And you can't say that the Central Bank was sitting idly by. On the contrary, since the end of 2013 alone, more than 300 troubled banks have been liquidated, their total number has decreased by almost a third. But banking supervision was still far from up to par. And the holes that appeared in it cannot be attributed to the connivance of the former leadership of the Central Bank.

“The scale of the problems shows the serious shortcomings of banking supervision in Russia, including in recent years. The capital injection account went to trillions of rubles. These are significant values,” says Sergey Guriev, Chief Economist at the EBRD. He, as business ombudsman Boris Titov did before him, points to emerging macroeconomic problems that can lead to higher prices, that is, spoil the ceremonial uniform of the Central Bank as the winner of inflation. “Every trillion is 1% of GDP and 2.5% of M2 money supply. If the Central Bank did not use interest rates, then each trillion printed would be in fact equivalent to a 2.5 percent inflation tax on all ruble holders,” Guriev recalled. To curb inflation, the Central Bank will be forced to pursue a tight monetary policy. Outcome:

It remains to be recalled that only the operation to reorganize FC Otkritie through the Banking Sector Consolidation Fund (FCBS) has already led to the opening by the Central Bank of a credit line for 1 trillion rubles. According to experts, not later than in six months the market will feel the cash flow.

Words and deeds

There is a curious analogy between the actions of the Central Bank, which allowed the collapse of large private banks, and the three-year budget, recently approved by the government. In words, the leaders of both the government and the Central Bank do not get tired of repeating that the nationalization of the Russian economy is excessive. But what happens in reality?

According to the Minister of Economic Development Maxim Oreshkin, the privatization of large stakes in state-owned companies has not yet been included in the budget. One can add: even if they had “laid it down”, then, as experience shows, the privatization plan with a high degree of probability would have remained unfulfilled. The Central Bank, as we see, is ready to absorb any private troubled banks, if their rank is recognized as systemically important.

What is characteristic: neither the government nor the Central Bank abandon the thesis about the need for denationalization. Events are developing in the opposite direction. Explanation or technique (unsuitable market conditions for the sale of state shares, and when will it become suitable in the face of forcing sanctions?) or no alternative (what else to do with large banks that find themselves in a critical situation, if their liquidation can cause a domino effect?). In the first case, the market itself is against privatization, in the second, the nationalization of private banks is an act of their salvation. As a result, the share of the state in the economy increases even more.

This is the reality of "structural reforms" when it comes to ownership structure. And denationalization, as usual, is postponed until tomorrow. Or the day after tomorrow.

Raiders or rescuers?

“All happy families are alike, every unhappy family is unhappy in its own way” is a universal principle that applies to banks as well. The leaders of Yugra and Binbank, Alexei Nefedov and Mikhail Shishkhanov, gave extensive interviews to the media. With very different assessments of the actions of the Central Bank.

Nefedov directly says that the Central Bank brought Ugra to bankruptcy. Its curators have been working in Ugra since the bank entered the top hundred, they knew all the decisions that were made. The Central Bank applied to Yugra "scenarios of competent raider seizures from the 90s: a hard entry into the bank, the removal of the current management from management, the creation of huge reserves - the artificial creation of losses that led the capital to a negative value, and, as a result, the revocation of the license on formal criteria."

It was decided not to bankrupt the Binbank, but to sanitize it, and Shishkhanov's attitude to the actions of the Central Bank is completely different. On September 21, he said: “We are now talking about the fact that there will be a recovery, in which 75% will go to the state, and 25% will remain with the current owners. How things will turn out there - life will show. Shishkhanov said that Binbank found itself in difficult conditions due to the state of the banks that it undertook to sanitize: “A simple example: Rost-Bank was taken into sanitation. The loss was recorded at the level of 35 billion rubles. Calculate the economy based on this. After 10-12 days, the rate doubled. Immediately, all the bank's liabilities doubled in price. The loss immediately increased to 70 billion rubles. How was it to be predicted? Impossible. And whose fault is it that oil prices have fallen? Well, not the Central Bank.

"Glade" for "elephants"

The borderline situations that have developed in a number of banks are, of course, related to the general economic crisis, which, as the banks themselves testify, has not been completely overcome. But these reasons may not end there.

The deputy head of the service, Andrey Kashevarov, said on September 20 that about two years ago, the FAS had already sent proposals to the Central Bank to limit the state's share in the banking sector. However, “calculating the state’s share in the banking system is not an easy story given the reporting that currently exists,” therefore, “if you limit the share, then it’s just easy to administer a ban on the acquisition of banking assets to those banks that have a share in their capital of more than 50%, so called state banks. This is a more efficient way, and if this decision is made, then there will be no difficulties here.”

True, after Rosneft is not recognized as a state-owned company (otherwise, what kind of “privatization” of Bashneft can we talk about?), the path proposed by Kashevarov may not be as direct as it seems. Strictly speaking, the Central Bank is not a state bank, which means that the ownership of banks being rehabilitated is not subject to the proposed restriction. On the other hand, the Central Bank must transfer these banks to someone, and here the restriction can already play.

Fences for "elephant banks" trampling down the banking "clearing" are necessary, as well as antimonopoly control over the actions of the Central Bank in the framework of banking supervision. The very threat of its appearance will certainly not increase the similarity of this supervision with “raider seizures”.

The State Duma has questions to the Central Bank

The State Duma will ask the Central Bank and law enforcement agencies to check what reasons led to the possible withdrawal of assets from Yugra, FC Otkritie and Binbank. The Central Bank and the security forces are invited to identify the guilty and responsible persons for the loss of assets. And also, it is possible to “bring to account persons, including officials of the Central Bank, who allowed the current situation and did not carry out appropriate control and supervisory checks in time in accordance with their official duties,” Prime refers to the protocol order of the State Duma.