Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
A bill authorizing a 1-trillion ruble recapitalization of banks was rushed through Russia’s lower house of parliament.
Legislators in the State Duma approved the bill in all three readings today, allowing the Finance Ministry to issue new OFZ bonds that will be exchanged for subordinated bonds of recapitalized banks.
“Those who are against are Bolsheviks,” Andrei Makarov, chairman of the Duma’s committee on budget issues and taxes, told deputies. “You are calling for 1917.”
The bill adds to efforts by Russian authorities to boost confidence in the financial system in response to the slump in the ruble, which has lost 45 per cent against the dollar this year. The currency fell to a record 80.1 per dollar at one point on Dec. 16, even as the central bank raised its key interest rate by 6.5 percentage points to 17 per cent, before rebounding in recent days.
Finance Minister Anton Siluanov told the Duma that it expects recapitalized banks to offer “market” yields of 12 per cent to 13 per cent on the subordinated bonds. The ministry is “giving assets, rather than money to support settlements between banks,” he said. Recapitalization will be available to all banks considered systemically important.
The Duma passed the bill a day after Russian President Vladimir Putin warned citizens at his annual media conference in Moscow that the country faces a long recovery from the crisis. “Under the most negative external economic scenario, this situation can last two years,” Putin said. “If the situation is very bad, we will have to change our plans, cut some things.”
He struck an uncompromising stance, blaming the ruble’s decline on external factors and accusing the U.S. and the European Union of trying to undermine Russia’s economy in the confrontation over Ukraine. The U.S. and the EU imposed sanctions when Russia annexed Ukraine’s Crimea in March.
“They won’t give up because they will always try to chain it,” Putin said, as he compared Russia to a bear protecting its territory. “As soon as they chain it, they’ll rip out its teeth and claws.”
Efforts by Putin to prop up the economy are constrained by the country’s dependence on oil, its main export. The central bank forecasts GDP may shrink almost 5 per cent next year if the price stays at US$60 a barrel and Putin said yesterday that Russia must prepare for oil as low as US$40.
He suggested the slump in oil prices was the result of collusion between the U.S. and Saudi Arabia to punish Russia, though he also said that it was possibly due to rivalry between traditional oil and shale-oil producers. https://www.city-data.com/forum/newth...ewthread&f=114
LOL..kinda reminds me of the US and the hasty TARP that got pushed through.
No matter what type of government a country has they will never let the banks fail.
It is our money, after all. There lies the problem. Do we trust today's banks to run a huge sector of the economy, which is essentially non-productive, or do we not? Do we prefer efficiency or safety? If we decide that we don't trust these bankers, by what means other than government can oversight be accomplished? I prefer some guarantee that my net worth won't dive because of the greed of financiers. If there's a free market solution, I'd love to hear it, but I think breaking up the main players is a start. Failures should be localized as much as possible.
Last edited by nvxplorer; 12-23-2014 at 12:16 AM..
A bill authorizing a 1-trillion ruble recapitalization of banks was rushed through Russia’s lower house of parliament.
Legislators in the State Duma approved the bill in all three readings today, allowing the Finance Ministry to issue new OFZ bonds that will be exchanged for subordinated bonds of recapitalized banks.
“Those who are against are Bolsheviks,” Andrei Makarov, chairman of the Duma’s committee on budget issues and taxes, told deputies. “You are calling for 1917.”
Looks like they learned from the three American musketeers, the masters of bail-out, Bush, Paulson & Bernake.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.