Alexei Vedev, Doctor of Economic Sciences, Head of the Financial Studies Department of the Gaidar Institute has shared his views with the RBC on whether a new global crisis is likely and what may become the cause of it.

September 15 is the date of the outbreak of the global financial crisis of 2008. In response to it, the world’s overall banking regulation has undergone transformation. The US mortgage crisis started in August 2007 and at first Russia did not react to it at all, but as early as Q4 2008 the Russian economy fell by 1.3% on the back of the Russian-Georgian armed conflict and the collapse of Lehman Brothers. Over the next year, the Russian economy fell by 7.8%, which is still a record since the mid-1990s.

The 2008–2009 crisis was “poured with money”, Alexei Vedev notes. “Over a long period of time, they pursued the policy of quantitative easing. Right at the time when central banks of developed countries started exiting from the soft stimulating policy, high inflation and a risk of recession emerged,” Alexei Vedev explains.

According to Alexei Vedev, information flows are now faster and central banks have amassed crisis-combating experience. The “price of the issue” is becoming much lower. “The notion of “a crisis” is quite vague. If in 2009 the Russian economy shrank by 7.8%, now when we say “the crisis” we mean a GDP decline of 0.5% - 1.5%. Both the depth and extent of a crisis are getting smaller: it is highly unlikely that any G20 country will experience a GDP decline of 10% or 8%,” Alexei Vedev adds.

According to most economists, a structural economic transformation, isolation on the part of the West and reorientation to the East will not immune Russia from shocks of a new global crisis.

In Alexei Vedev’s opinion, if a global financial crisis breaks out, it will affect Russia the least because “the country is dealing with its internal problems,” including the level of inflation, a shifted pattern of the balance of payments and the exchange rate. “Playing with the exchange rate is a great risk to financial stability,” Alexei Vedev warns.