Russian Banks Could Withstand Further Western Sanctions – Central Bank Official

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Russia's Central Bank has analyzed the potential impact of possible further economic sanctions by the West and concluded they will not be fatal for the country's banking system, the bank's first deputy chairman said Friday.

MOSCOW, April 4 (RIA Novosti) - Russia's Central Bank has analyzed the potential impact of possible further economic sanctions by the West and concluded they will not be fatal for the country's banking system, the bank's first deputy chairman said Friday.

"It will survive," Alexei Simanovsky said, referring to the banking system.

Economic Development Minister Alexei Ulyukayev said last week that Russian authorities may take a number of steps to increase the capitalization of the country's banking system if the economic situation worsens due to Western sanctions.

Finance Minister Anton Siluanov earlier pledged that Moscow will support banks and businesses with large external debts in the event of a financial crisis by dipping into an $88 billion emergency sovereign wealth fund.

Earlier this week, VTB, the country's second largest bank, announced it does not expect economic sanctions imposed by the US and EU to have a significant impact on its business.

"Let me remind you that the sanctions were imposed against individuals. So far we do not expect significant effects from this sanctions regime," said Herbert Moos, VTB's chief financial executive.

Western countries imposed targeted sanctions against a number of Russian politicians and businessmen as well as against Bank Rossiya after Crimea held a referendum last month in which over 96 percent of voters supported leaving Ukraine and joining Russia.

The US and EU have repeatedly warned Russia of economic pressure and international isolation if tensions over Ukraine continue to escalate.

Russian Foreign Minister Sergei Lavrov said last month that talking to Russia in the language of sanctions is "inappropriate and counterproductive" and warned his Western partners about the "boomerang effect" that sanctions would have.

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