Russian banking TOP will double in quantity
Another 30 banks will be declared «systemic»
The Central Bank of Russia has lowered the financial threshold for recognition of strategically important banks. In December 2013 25 banks have been pending to be included in the list of «reliable» banks, now this number increased to 59 due to changes in eligibility requirements. Experts find the regulator striving to even out the existing disbalance weighting in favor of a few TOP banks.
The Central Bank of Russia introduced new scope of criteria determining strategically important banks. The final indicator for each bank will still comprise four key components: volume of assets, share of due from banks, volume of due to banks, and share of individual customer accounts. Previously a systemic bank must have had an aggregated factor of these four accounting for at least 0.6% of the market total – the new regulations pull this indicator down to 0.17%.
The quantitative requirement has also changed. In December it was proposed to count these banks based on the final factor – the aggregated value of «strategic» banks must have constituted over 2/3 of market total. The new plan now refers to the aggregated asset base, which must comprise 80% of market total assets. This can put at least another 30 banks on the list of strategically important banks, experts say.
Regulatory supervision over «systemic» credit institutions will be performed both in central and territorial offices of the Central Bank of Russia. It is also planned to establish special supervisory bodies to be located at the place of each strategic bank residence, which will maintain control over management quality in these institutions.
«Just a few banks are not enough to keep the system smooth, and the Regulator knows that, – SDM-Bank Deputy CEO Vyacheslav Andryushkin says. – The initial plan of the Central Bank seemed questionable. The adjusted one looks mush more reasonable». Although, being in this list gives nothing but a formal status. «So far the list does not mean any specific association with CBR» – Andryushkin says.
Financial ombudsman Pavel Medvedev expects the list extension to have a positive result. «Our financial system is “crumpled” – the head is huge, while the tail is long and thin. And oftentimes the problems start from the tail, which no one pays attention to. The increasing number of systemic banks will make the supervision process better sustainable. Once CBR starts actively communicating with a lot more banks than it used to, the rest of the banks will at least have the patterns of how to solve their problems», – Medvedev says.