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
Vladimir Putin's introductory remarks:
Good afternoon.
Today, we will analyze the situation in the national banking and financial system. We will discuss in detail the state of affairs in our banks, as well as proposals to increase loans to the real economy.
We talk about this all the time. Today, we'll resume the discussion of this question once again. This is an urgent question, and it is being continuously raised before the Government by State Duma deputies and businessmen. I just visited a company of this kind, and also met with representatives from small and medium-sized businesses. They discussed this urgent issue down to the most minor detail. In fact, the first question at any company I visit is: "What about the performance of our financial system and the level of rates?"
At the same time, the Government understands what serious problems the banking sector is facing. These problems include increasingly limited access to foreign loans, inferior credit portfolios, higher borrower risks, and difficulties involved in attracting funds to replenish its own capital.
We realize that under the circumstances, banks have had to substantially increase interest rates on loans.
Our task is to find ways of resolving these problems, preserve the stability and reliability of the national banking system, and at the same time make loans accessible for companies in the real sector of the economy.
Much has already been done. First of all, trust in the national currency has been restored - the rouble exchange rate has been stabilized. In the last few weeks, we have seen a gradual slowdown in the inflation rate. Allow me to draw your attention to the fact that last January, inflation stood at 2.4%, in February, at 1.7%, and in March, at 1.3%. According to the estimate of the Ministry of Economic Development, in April it may drop to 1.1%-1.2%.
This drop gives cause for optimism that the Central Bank will reduce the refinancing rate. Is this correct, Mr Ignatyev (Central Bank Chairman)? Needless to say, we understand that this question is the prerogative of the Central Bank Board of Directors.
In turn, the Government should create the conditions under which reduction of basic rates will not remain a symbolic step, but will really help reduce interest on loans.
In this context, I'd like to issue several instructions.
First, as you know, the budget earmarks 300 billion roubles for government guarantees on loans to strategic enterprises. However, let's put it plainly -- banks do not find the established mechanism to be convenient. Government guarantees are up to 50% of the issued loans, but banks will be able to receive government money only after the entire collateral is sold. We know what is happening on the market. This is a rather sophisticated and time-consuming procedure. Moreover, loans are not worth much anymore. We have encountered this problem while discussing the situation in a number of companies in specific industries with banks.
Banks are taking big risks, which is why I am instructing the Ministry of Finance and the Bank of Russia to revise the mechanism of government guarantees. It should be made more convenient and attractive for commercial banks. It is necessary to ensure that guarantees really decrease risks involved in granting loans, and, hence, I'd like to hope, interest rates on loans for borrowers.
This problem could be resolved in the following way. If a company goes bankrupt as of the date the debt is due the bank involved should instantly receive government-guaranteed funds and start selling the collateral later. In this way, the government's guarantee will become more attractive.
At the same time, the government will become a lender to the bankrupt company and will take part in further procedures on settling its debts, which will also give serious additional support to the bank involved.
I'd like you to submit your final proposals in two weeks.
Second. I'd like you to pay primary attention to additional capitalization of banks. It goes without saying that without this, it will be difficult to settle what are called "bad" debts, and to enhance the stability of the banking system as a whole.
Needless to say, increased capitalization is primarily the task of shareholders, the owners of a bank. However, in the current conditions of the global economic crisis, the government cannot stand by as a passive onlooker.
This year, we have reserved more than 550 billion roubles for additional capitalization of banks. This is in addition to the 757 billion roubles that have already been granted to commercial banks in subordinated loans.
At the same time, the mechanism of government support in additional capitalization of banks also requires modernization. Today, the government invests one rouble for every rouble channeled into the bank's capital by the shareholders. I think this is tangible support for the banking sector. In other words, the ratio of the funds invested by the owners and the government is 1:1.
It has been proposed that at the new stage of support for the banking system, this proportion should be brought to 1:3. In other words, for each rouble invested by the shareholders, the government will add another three roubles in subordinated credit. The first stage of support, when the government invests one rouble for every rouble of the shareholders, will be retained for the banks, which have not received such support so far. To take part in the second stage of support, banks will have to go through the first stage of support. In other words, only those who were covered by first-stage support will take part in the second stage.
Use of government bonds should become another way of enhancing capitalization of banks. I'd like you to complete the discussion of this issue in two weeks. We have just discussed this issue with the Chairman of the Central Bank, which will back the Government's efforts.
We should increase lending to the real economy. Support for banks will be closely linked with obligations on expanding loans to the economy. I spoke about this in the State Duma.
With this goal in mind, the following rule is being introduced - a bank will have to fully spend the government's loan on the real sector and citizens. Allow me to emphasize that the bank's loan should not be below the support it received from the Government.
It is very important for the real economy to receive a loan at the Central Bank's refinancing rate plus three percent. Today, this comes out to 13% plus three percent - 16%. This should be the final rate for the borrower, including all commission payments.
Loans should be granted for no less than one year. The Central Bank should strictly monitor compliance with these terms.
These loans will be issued to the commercial banks, which will meet the terms of lending money to the real economy. Before issuing these loans at Vnesheconombank's Supervisory Board - and you know, they are issued through VEB - we'll look at the loans, granted by different commercial banks since January 1 of this year, and at the perspective credit portfolio for different industries that banks will help using the government support funds.
Banks will have to make public reports on the scale of loans, as well as on the bonuses of their top managers. I think colleagues will understand me - this is a proper requirement under the circumstances. Now, let's start our discussion.
