Meeting of the Expert Group “Development of the Financial and Banking Sector”

The Expert Group on development of proposals on urgent problems of Russia’s socio-economic strategy for the period through 2020 on the direction “Development of the Financial and Banking Sector” (Group №10) held its session on 18 April 2011 at the Institute of Economic Policy named after Ye. T. Gaidar to discuss prospects of development of the derivatives market.
Presenters were Alexey Zabotkin (VTB Capital) and Oleg Solntsev (Center for macroeconomic analysis and short-term forecasting)

In his presentation “Derivatives and securitization”, A. Zabotkin touched upon such issues as possibilities for using derivatives and securitization to ensure a greater financial stability of the real sector and bolstering its efficiency. He also considered the role played by the regulator and infrastructure, and the international record of development of the derivatives market, and the current situation in Russia.

O. Solntsev focused on the problem of syndicated loans. Advancement of this particular segment of the financial market should contribute to expansion of lending to the real sector and form a partial remedy to the problem of “long money”. If expanded, the market for corporate bonds and syndicated loans would help the domestic banking system to alleviate such problems as low capitalization and a short term of disposable liabilities.

The discussion helped build consensus on the fundamental importance for the financial sphere of development of such segments as the market for derivatives, securitization and syndication. Meanwhile, the discussants raised the issue of creation of a mega-regulator, its configuration and powers. That said, the key challenge facing the derivatives market is an imperfect legislative base with regard to collaterals. As far as development of securitization is concerned, the emphasis should be put on extension of the list of assets (other than mortgages).