The Central Bank of Russia unlicensed Sodbiznesbank last after it was caught red-handed in money laundering. The scandal dampened confidence in the bank crediting market. Many small and medium-sized banks suspended or limited operations in June. The problems spread to several big banks in July. The Central Bank somewhat improved the situation as it cut compulsory reserve standards, spread government guarantees to all deposits, and made certain other curative moves.
The latest developments are by no means foreboding another crisis. On the contrary, they promise improvements in Russian banking, Mr. Tosunyan said emphatically. The national economy was in a depression six years ago-same about banking. Today, both are on an upswing.
Russia's sweeping economic progress necessitates a stronger and smoother banking network, and makes regulation agencies toughen banking standards. True, the RBA might have been harsher than necessary as it demanded greater capital transparency, more stability and a streamlined proprietorship structure, admitted our informant.
Mr. Tosunyan spoke up for thorough planning as Russia is getting its banks into order. "We must work step by step to enhance transparency. In that, we are to avoid tough moves, and act according to the market situation and within the limits of our economy," he added.
"It is pointless to make primitive reasoning on just how many banks the Russian economy presently needs. The quality and sufficiency of banking services, and banking infrastructure developments are the only matters that ought to come under discussion," said the RBA president.
