Banks are alerting on the crisis beginning

The Russian banking sector is already experiencing liquidity problems, which since September 2011 is in the negative zone. In fact, there are two reasons for that. First, currently Russia is experiencing an upsurge in consumer lending. Thus, when compared with last year, the consumer crediting increased by 44% (as of July 1). Banks offer loans at very low interest rates. One shouldn't be even surprised, if the loan rates would match the deposit interest rates. However, it could entail negative consequences, such as the bad debts growth.


Second, there is a decline in deposits, which is forcing banks to raise funds with the Bank of Russia. Currently, the volume of refinancing of the Central Bank centralized credits is 5.2% of the total liabilities. As to the stability of the banking system, in the opinion of the international rating agencies, if a bank attracts more than 10% of liabilities of centralized credits, it is an indicator of the negative prospect. Now all Russian banks are dependent on refinancing.
Thus, the Russian banking system is already short of resources, which in turn is a negative signal for the Russian economy in general.
A.L. Vedev,  PhD, Director of Structural Research Center