For the past nine months, Russia’s financial system has strengthened, said in the financial stability review, published on the website of the Bank of Russia. Today the main risk to the Russian economy remain the deceleration of global growth, geopolitics with its sanctions and uncertainty in key interest rates of the Western Central banks and the fall in incomes, increased retail loans.
It is the internal factors, according to experts, come to the fore. “In the last few years, the stability of the Russian economy to the global challenges has increased. We have a small foreign debt, a budget surplus. But there are internal vulnerabilities that at current trends themselves can become risks”, — RBC quotes the first Deputy Chairman of the Central Bank Ksenia Yudaeva.
In the domestic financial market experts of the regulator, apart from falling real incomes and high rates of retail lending and debt, allocate some more negative factors, which in the case of implementation vulnerabilities reinforce the negative momentum. So, the Central Bank is concerned about the valyutizatsiya the banking sector, which began with the end of last year. In addition, since the beginning of 2019 OFZ-residents are buying again after the mass release of securities in 2018: the share of government bonds in the hands of foreign investors for January — March rose from 24.4 to 26.7%.
Another reason for concern, according to analysts, the growth of short — term funding of banks. Statistics show that citizens and companies are discovering more and more short-term deposits and less long-term, potentially threatens the stability of banks. The Central Bank has developed and the method of dealing with this trend. One of the tools will be the introduction of the Deposit with higher rate, which a citizen can not close early.
Another vulnerability is related to the concentration of loans to large companies.
According to Central Bank estimates, around 35% of all loans to the nonfinancial sector have in the 92 largest companies of Russia. The default of one or more of them could harm the banking system and the economy as a whole. To avoid this, the regulator plans to prepare measures to monitor and prevent excessive debt burden of Russian companies.
Amid falling income, the debt load of individuals, which we said in the beginning, the Bank of Russia is also struggling. First, the Central Bank since April 1 raised to 30 p. p. premiums on unsecured loans, meaning that banks now need more capital under the provision of loans. Secondly, from January 1, doubled for mortgage loans with small down payment, a premium to the risk factor from 50 to 100%.
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