VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Putin's introductory remarks:
Good afternoon, colleagues,
Our main task today is to analyze the effectiveness of measures on improving the situation in the financial sector and individual industries. In effect, we should sum up intermediate results of the anti-crisis plan.
I don't think it is worth discussing its provisions in detail once again. All measures on alleviating the negative influence of the global crisis on the Russian economy are transparent and public. They were taken after an active dialogue with regions, businessmen, key political forces, and public organisations. We will continue to work in the same manner in the future.
We have promised that no matter how difficult it may get, we won't apply shock therapy. I believe that these measures have primarily helped the country to avoid a crisis shock.
We have enabled all economic operators and common citizens to adapt themselves to the current situation; we have prevented uncontrolled devaluation, reduced taxes, and backed the hardest hit real economic branches. It is sufficient to mention large-scale support given to agriculture. We are launching programmes to help people who have lost their jobs, or cannot afford paying mortgage loans.
I'd like to make special mention of the measures taken to support the banking sector. On the whole, confidence in banks and their working capacity have been preserved. This is clear from both the increasing investment of the population, and positive dynamics in the issue of loans to companies. Obviously, the financing of companies has been resumed but is not growing quickly enough, and we should be straight about this. The rates of lending money to the real economy grow by more than one percent per month. I'd like to repeat that this is clearly inadequate. Our next task is to increase these rates.
We understand well that future development of the entire economy depends on the stable performance of banks.
At a meeting on economic issues the day before yesterday, we took a number of major decisions that I'd like to tell you about.
In the next few months, the state will considerably increase the share of its participation in the banking capital of the second level. This primarily applies to private commercial banks. I'd like to stress once again that I'm talking about the second level, that is, so-called subordinated loans. They are given for a long term and cannot be recalled ahead of time. For this reason, banks register them as their capital. However, creditors do not have the right to take part in administering banks; the ownership of banks does not change, either.
We consider it inexpedient for the state to invest directly into private banks of the first level. In other words, we do not want to buy shares of private banks. First, responsibility for these banks should rest with their current owners; they should not seek shelter behind the state. This is not the case. Second, the state's participation in banks' capital of first level may violate the rights of minority shareholders, which is also inadmissible.
We will use the following mechanism for granting subordinated loans. An additional 100 billion roubles will be earmarked, apart from the already allotted 225 billion roubles, for this purpose.
To receive subordinated loans, the shareholders of commercial banks should increase their capital themselves. For each rouble of additional capitalisation, commercial banks will receive one rouble of a subordinated loan.
The capital of state-owned banks will also be increased. Needless to say, here the state can take part in first level capital, that is, increase its presence in these banks. We are planning to invest 200 billion roubles in the VTB and 100 billion roubles in Vneshekonombank, plus, possibly, a 100 billion subordinated loan. Sberbank will not be neglected, either, if it needs more money. This task will be carried out by the Central Bank as the main shareholder.
I'd also like to emphasize that the initial measures to support the banking system were actually designed to save the national financial system, and in funding these banks we did not burden them with any systemic requirements. Allow me to repeat, our major goal was to save the financial sector and the savings of our citizens.
The next stage in the support of the banking system should be accompanied by mandatory issue of loans to the real economy.
In general, Vneshekonombank has already elaborated special measures to this effect. They should be tested and used on a broad scale. The issue of subordinated loans must be made conditional on these requirements.
I would like the Finance Ministry and the Economic Development Ministry to pay special attention to this, and to use this in practice. It goes without saying that in the future, additional measures will have to be taken to support not only banks but also other sectors of the economy. We are doing this, as I've already said, and will continue doing this. The Government will be keeping an eye on this, and will be at work on this at all times.
We should closely link these additional steps with our strategic plans and tasks. They should effectively facilitate structural overhaul and improve the performance of the entire economy.
Formation of an international financial centre in Russia is one such step. It has both anti-crisis and strategic significance. We will have to review a relevant concept today.
It is clear that one of the problems Russia has encountered in the last few years is inadequate development of its financial sector. The crisis has revealed the magnitude of this problem. We should face reality and act without any excessive ambitions, but we should understand what is taking place in our own economy and the economies of our next-door neighbours.
We have said more than once that our goal is to turn the rouble into reserve currency. Please believe me, this is an understandable and reachable goal. We are already using roubles for settlements in trade with some countries. I've recently said this and want to stress it. Our exports to Belarus are settled in Russian roubles by 90%; the relevant figure for imports from Belarus is 45%-50%. In other words, we are using roubles in almost our entire bilateral trade. We are considering using roubles more extensively in some other directions of our cooperation with next-door neighbours.
This goal is absolutely realistic if we consider that the level and depth of cooperation of some of our companies with former Soviet republics is unprecedented in the world economy, and that the Soviet-inherited energy systems and railways are operating under the same pattern. Its implementation will benefit both our economy and our major partners in the CIS space.
The recent events triggered by the crisis have shown how uncomfortable it is to depend too much on foreign sources of funding, when key decisions bearing on the Russian financial market are mostly made outside our borders. Moreover, they are based on criteria that are loosely linked with the condition of Russian companies, and the Russian economy as a whole.
We must create the conditions for our companies to attract investment at home, and enable our citizens to derive a profit by placing their savings in reliable banks.
The plan of major measures to establish an international financial centre in Russia is designed for five years but the main bills on the operation of up-to-date exchanges and on streamlined taxation of transactions with securities must be adopted without much delay.
It is important to work meticulously on these bills and to discuss them in detail with the community of experts and State Duma deputies. We should not repeat the mistakes of other countries, such as weak and ineffective regulation of transactions with securities, which has led to the global economic and financial crisis.
Now let's proceed to the discussion of today's agenda.
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