Bank of Russia Looks for Feedback, Advice from Lenders: Report

Meeting with representatives of commercial banks and think-tanks are organized by the Bank of Russia, which is seeking feedback and advice from the banking sector it oversees, three people who attended the first such meeting told Reuters.

The central bank plans to meet with experts once every three months to listen to views on banking sector trends, the sources said. The Bank of Russia undertook a massive cleaning operation in the banking sector in recent years, halving the number of banks in the country  to 440 as of early 2019.

“Yesterday, at the central bank, there was a meeting of its leadership with experts,” said Kirill Tremasov, the head of research at Loko-Invest and a former head of the forecasting department at the economy ministry.

The meeting discussed competition in the banking sector, an issue with which the state has become increasingly involved, Tremasov said.

The central bank has taken over several major banks in recent years, including Otkritie and Promsvyazbank, in order to limit risks to Russia’s financial stability.

Discussions about how the ECB should act are becoming louder on the eve of the regulator’s meeting on March 7, when officials should assess the rate of economic growth and decide whether new incentives are necessary. The central bank needs to find a solution in which the choice in favor of completing the asset repurchase program last year would not seem to be a mistake. In this situation, non-standard ideas can be helpful, bankers said.

A source close to the Bank of Russia told Reuters that Governor Elvira Nabiullina, First Deputy Governor Dmitry Tulin and Deputy Governor Vasily Pozdyshev took part in the meeting. The initial plan was to discuss the structure of the banking sector, retail lending and debt burden on the corporate sector but only the first topic was covered, the source said.

The central bank indicated at the meeting that it was interested in attracting foreign capital into the Russian banking sector but that appeared contradictory following the recent Baring Vostok case, Tremasov said.

Concerns were raised about the business climate in Russia when state prosecutors this month charged Baring Vostok’s Michael Calvey, the U.S. founder of one of Russia’s biggest private equity firms, with fraud. The Baring Vostok issue was not raised at the central bank’s event, one source who attended the meeting said.