The head of the Central Bank proposed a new way of dealing with fictitious capital


“The Bank of Russia so far no authority on regulation and supervision of Bank holding companies, including several banks and financial companies with the same owners,” — said the head of the Central Bank Elvira Nabiullina at the VII Congress of the Association of Russian banks.

The presence of the same owners the opportunity to own various financial assets, not United into a single financial holding, leads to numerous abuses, the undermining of financial stability of banks and other financial companies, and in some cases may pose risks to financial stability, says the head of the Central Bank.

“I’m talking about cases when the expense of unsophisticated schemes banks create fictitious capital, paid-up, in the end, at the expense of credits of banks, or when funds pension funds through the purchase of bonds of banks, ultimately, are financing projects owners funds and insurance companies”, — said Nabiullina.

The Governor of the Bank of Russia also drew attention to a case of abuse of REPO transactions. Supervision, she said, is often faced with a situation where the same asset has been transfered from one organization to another when checking.

Nabiullina proposed to establish a supervision of Bank holding companies, and to oblige their owners to create a staging company to manage the holding.

In addition, the head of the Central Bank announced that it intends to make mired bankers left the banking organizations “We have an database in which more than 5 thousand persons, which we are not allowed to purchase more than 10% of the shares of the banks. This prohibition should be up to ten years for a single violation, and if repeated — it becomes a life”. This should apply to auditors and signed false Bank conclusions, she added.

“There are unscrupulous practices of Bank audit in more than 50% of banks with revoked licenses was a positive audit report,” said Nabiullina. According to her, it is necessary to authorize the CBR to maintain a register of auditors.