A State Council ad hoc team leader had called to spectacularly increase that capital and enhance related government guarantees. However, "it will be inexpedient to boost guarantees to that extent-our analyses have proved the point," said Mr. Kudrin.
As the ministry debated the matter with people prominent in the market, they said they were apprehensive of the housing market monopolized. The federal agency may make just such a monopoly if it bloats its authorized capital and enjoys exorbitant guarantees. "The market is making good progress on its own-it has doubled for now, which means it has snatched at the conditions we offer," the minister went on.
He called the audience not to forget that the disputable capital and guarantees were to get their increase out of the federal budget, that is, out of taxpayers' pocket.
Andrei Sharonov, Deputy Minister of Economic Development and Trade, offered objections. "Your apprehensions are exaggerated," he said to the Finance Minister with reference to corporate majors active in the market even now, and to the worse-off parts of Russia, where a federal agency would come in handy. Sharonov thinks it quite possible to build up government guarantees as private mortgages and corporate creditors' own authorized capital ought to come prior to such guarantees.
The deputy minister came up against initial installments on mortgage loans cut to 10 per cent from present-day 30, and objected to interest rates on such loans subsidized-"there is no way to get far off from market rates. If the scissors gets too big, a danger may come up of the money invested elsewhere." As Sharonov sees it, the situation demands interest rates subsidized only within involved companies as the personnel know each other well enough.
