"Politics, I think, have a say occasionally, when one wants to display us not in the most favorable light-so I utterly disagree with the S&P evaluation," Gareghin Tosunyan, Russian Banking Association president, said to Novosti.
Our interviewee was commenting a paper on the present state of the CIS countries' banking systems, which the S&P made public Tuesday. As the paper has it, banking networks in the Commonwealth of Independent States countries share hazards, which are among the world's worst. Russia is lagging behind its neighbor countries for banking reliability and efficiency, warn S&P experts.
As they conclude, the Russian banking capital is too small to meet national economic requirements-an opinion Mr. Tosunyan agrees with. This capital scarcity is a hazard in itself, and Russian bankers are aware of it, he acknowledged. However, he does not think the S&P is right because things are to be appraised in their development, remarked the banking boss.
Russian banking hazards are subsiding with every passing year, and will shrink even more after a current insurance reform is over, he said with reference to the Central Bank of Russia selecting banks to join an emergent deposit insurance network. The reform will purify Russian banking, hopes Mr. Tosunyan.
Russian banks will shift, next year, to international financial accounting standards. That will spectacularly reduce hazards-just as dynamic efforts against money laundering. "There are a great many hopeful trends. The only trouble is that we are not implementing those trends quickly enough," he concluded.
S&P experts are painting things blacker than they are, says Anatoly Aksakov, second in charge of the committee for credit organizations and finance markets on the State Duma, parliament's lower house. "As the matter really stands, the Russian banking system is among the most advanced and reliable-in the CIS, at any rate. Ukrainian bankers are learning from us, and imitate our legislative moves. True, they took up deposit insurance before we Russians did-but they know our system is the more progressive. They are displaying great interest in our Bankruptcy Law, too." The MP also pointed out the Russian resource basis, which exceeds that of any other CIS country.
Russian banking will get steadier and more reliable after the weaker banks drown. Russia is in for an avalanche of mergers, bigger banks swallowing the smaller banks, as finance market necessarily demands fat capital.
Russia equally needs to extend the opportunities of using the banking resource basis, and to reduce credit hazards. This job will become far easier after a credit history bill is passed. Mortgaging also must be streamlined, said Mr. Aksakov.
