June 7, 2018 / 8:17 AM / 9 months ago

RPT-UPDATE 1-Russian c.bank proposes asset freezes on banks being bailed out

(Repeats to additional subscribers)

ST PETERSBURG, Russia, June 7 (Reuters) - Russian Central Bank Governor Elvira Nabiullina said on Thursday the government should consider drawing up legislation to freeze the assets of banks being bailed out by the state and those of their owners.

She also told a banking congress in St Petersburg that her bank would propose a mechanism to prevent the owners and senior executives of lenders undergoing rescues from leaving the country.

“Regrettably bankers are escaping abroad and regaining access to withdrawn assets there,” Nabiullina, in charge of the central bank since 2013, said, without giving any names.

The central bank spent over $40 billion on rescuing three private banks - Otkritie, B&N and Promsvyazbank - last year alone. More funds could be provided to a proposed bank that would take over the non-core and bad assets of bailed-out lenders, Nabiullina told Reuters this week.

So far, the central bank has managed to recover around 100 billion roubles ($1.62 billion) in assets from the ex-owners of the bailed out banks.

On Thursday, Nabiullina reiterated that the bulk of weak banks or those with doubtful business practices have left the Russian banking system.

She also repeated that the central bank was moving towards a neutral key interest rate, which it sees as closer to the upper end of a 6-7 percent range.

“Neutralisation of monetary policy - which we will reach soon - means a slowdown and, at the end of the process, a halt to cuts in the key rate,” Nabiullina said. “Still, situations when rates could be raised are possible if inflationary risks appear.”

The key rate is currently 7.25 percent, unchanged from March 26. The central bank is set to hold its next board meeting about the key rate on June 15.

The chances of the central bank trimming its interest rate in June have fallen as expectations of higher consumer price inflation during the World Cup have grown, a monthly Reuters poll showed in May.

By the end of the year, the central bank is still expected to cut the key rate to 6.75 percent, according to a poll of 20 analysts and economists. ($1 = 61.8398 roubles) (Reporting by Andrey Ostroukh, Elena Fabrichnaya and Tatiana Voronova; writing by Tom Balmforth and Katya Golubkova; Editing by David Stamp)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below