First Deputy Prime Minister Igor Shuvalov supported the proposal to change the model of rehabilitation of banks, but noted the need to reduce the risks of conflict of interests between the parties of this procedure.
“Now the Central Bank lends ASV (Agency on insurance of contributions). ASV provides appropriate resources by credit institutions themselves. It is necessary to depart from that model and move on to another”, — said Shuvalov TASS.
The meeting with Shuvalov, on these issues was held on August 24. According to a TASS source familiar with the discussions, the meeting was attended by representatives of the Central Bank and Ministry of Finance. Deputy Finance Minister Alexei Moiseyev said that the participants generally supported a joint model for the redevelopment of the banks. “This bill was submitted to the Central Bank, the parties expressed their comments,” — said Shuvalov.
Vice Prime Minister stressed the need to reduce the risks of conflict of interests between the actors of the procedure of financial rehabilitation of banks. “If a conflict of interest exists, and he even with the current powers of the Bank of Russia exists, then we have to see how the government it can affect”, — said Shuvalov.
The Agency notes that the Central Bank has repeatedly criticised the current model of rehabilitation of credit organizations, in which the DIA receives on these target loan funds from the Bank of Russia, and then at preferential rates gives them selected on a competitive basis to banks-sanatory. According to the regulator, sanatory used credit resources for other purposes and often require additional funds for rehabilitation rehabilitated their Bank.
The Central Bank has drafted a bill to amend the Bank resolution mechanism, changing the model with credit to equity. This model assumes that funding through a special Fund for Bank resolution will be forwarded directly to the capital of reorganized institutions.
The day before the meeting with Shuvalov, the newspaper “Vedomosti” wrote that the DIA has prepared the response document to the draft law of the Central Bank which proposes to engage in self-rehabilitation of banks. The Agency planned to present it at a meeting with Deputy Prime Minister. In ASV believe that direct investment into the authorized capital can create substantial losses. So, the Central Bank will lose 20 to 40 kopecks for each ruble invested in the capital of the reorganized Bank. Otherwise, the Bank of Russia will have been engaged in the management, development and recapitalization of the Bank, however, this scheme violates the principle of independence in making decisions.
The DIA also noted that the proposed CB scheme, there is a conflict of interest, since the principle of independence in making decision on reorganization of the Bank is broken. So, the Central Bank will single-handedly perform the functions of the regulator, the banking supervision Agency and the Bank rehabilitation, which greatly violates the global practice. In addition, the Central Bank actually creates the state Bank on the basis of banks, which will require additional investments in development. At the moment it is the responsibility of private investors in the course of rehabilitation of the Bank.