| Participants of the deposit insurance system will be named tomorrow Tomorrow in Russia, a deposit insurance system will begin to operate, the creation of which the authorities announced at the beginning of Vladimir Putin’s first presidential term. The Central Bank and the Deposit Insurance Agency (DIA) will take a long-awaited step - they will name the names of the first banks to enter the system. According to a Vremya Novostey source close to the Bank of Russia, there will be about 30 of them. On Friday, both departments tried to prevent the redistribution of the market in favor of these credit institutions. “The acceptance of a particular bank into the deposit insurance system in no way means that banks that joined it earlier have higher financial indicators, and those that joined later have lower ones,” the DIA and the Central Bank said in a statement.
According to the interlocutor of Vremya Novostey, the usual procedure for admitting banks to the insurance system will look like this: the Banking Supervision Committee (BCS) of the Central Bank (usually weekly) makes a decision on whether a group of credit institutions meets the requirements for participation in the system, the next day the Central Bank informs banks about this, and the board of the Deposit Insurance Agency (DIA) includes them in the register of “insured” credit institutions. On the third day after the CBN meeting, banks receive a notification from the agency about inclusion in the register. However, for the first time it was decided to make an exception. On the morning of September 21, a meeting of both the CBN and the (formal) board of the DIA will take place, after which the first deputy chairman of the Central Bank, Andrei Kozlov, and the general director of the DIA, Alexander Turbanov, will solemnly announce the acceptance of the first banks into the insurance system.
Both bankers and officials were looking forward to this day. There is only one thing that spoils the picture of the holiday: for banks, admission to the “pool of insured persons” has recently lost all economic meaning. As you know, in July, during a “crisis of confidence” in the banking market, the Duma, in order to calm panicked depositors, at the instigation of Sergei Ignatiev, urgently adopted a law guaranteeing up to 100 thousand rubles. (at the expense of the Central Bank) deposits in all bankrupt banks that are not included in the deposit insurance system. Depositors calmed down, but from that moment on, banks had only one reason left for participating in the general deposit insurance system: by law, this is the only way they can maintain a license to attract public deposits. An unpleasant aftertaste also remained from a vague misunderstanding: why the government, which was able to create a powerful system of guarantees for depositors in a matter of days, could not implement a standard deposit insurance model based on available international experience for years.
Face control
The law on guaranteeing deposits, which would make it possible to quickly compensate part of the lost deposits to depositors of bankrupt banks from a special fund, was started by deputies of the Duma of the first convocation (among its authors were DIA General Director Alexander Turbanov and Deputy Chairman of the Duma Banking Committee Pavel Medvedev). They adopted the concept of the "American model" launched in the United States after the Great Depression. True, the first option turned out to be weak: firstly, because it assumed that all banks would be allowed into the guarantee system without special selection (which was feared by market participants who did not want to pay depositors of weak or fictitious banks), and secondly, because it secured the right to appoint the head the State Commission for Deposit Guarantee (which manages the fund and collects insurance premiums from banks) behind the Duma - the Kremlin could not agree with this. As a result, in the post-crisis year of 1999, the law was rejected first by the Federation Council and then by President Boris Yeltsin.
In March 2000, the Ministry of Economy was instructed to develop a new concept for guaranteeing deposits, but things went slowly: the document was ready only a year later, and the draft law, written by the Ministry of Economic Development and Trade and the Ministry of Finance on its basis, was submitted to the State Duma only in 2002. And although by this time the law had acquired additional lobbying resources (after the change of leadership of the Central Bank, Andrei Kozlov, an ardent supporter of the idea of deposit insurance and Western regulatory principles, came to the post of first deputy chairman of the Central Bank in charge of supervision), its adoption did not accelerate.
In the discussions around it (along with the problem of participation in the Sberbank of Russia system), the question of how to select credit institutions for the “pool of insured”, based on what criteria, again came to the fore. For banks, it was fundamental already because, by decision of the White House, deposit insurance became mandatory for all credit institutions wishing to attract funds from the public, and banks that remained outside this system must return the license to the Central Bank to attract deposits from individuals. It is no coincidence that 1,140 banks out of just under 1,300 in the country submitted applications to undergo a Central Bank inspection and join the system.
The International Monetary Fund and the World Bank persistently drew the attention of Russian authorities to the danger of allowing a wide range of banks into the system. “Deposit insurance will help mobilize savings, but this is only possible if the deposit insurance system itself is reliable; therefore, it can only be extended to a limited group of banks that are able to meet strict requirements for quality and disclosure of information,” wrote Christoph Rühl, a senior economist at the Russian office of the World Bank, in the Vremya Novostei newspaper in 2001. Andrei Kozlov had the same opinion, and bankers began to fear that the regulator would introduce too strict barriers to entry into the pool and even use the introduction of deposit insurance as a reason to “cleanse” the entire market. From the moment the law was introduced into the Duma, the confrontation lasted more than a year. “A number of influential players, including Alfa Bank, Bank of Moscow, Mezhprombank and a number of others, secretly opposed the option proposed by the government and the Central Bank,” says a newspaper interlocutor close to the leadership of the Central Bank. “Each had their own reasons: some did not like special conditions for insurance of deposits in Sberbank, for others - a system of checks for compliance with special criteria.”
Under pressure from banks and the Ministry of Economic Development and the Federation Council, which supported them, the criteria were rewritten twice in 2002-2003 at Neglinnaya. As a result, there were four of them left: the reliability of the bank’s accounting and reporting, its compliance with mandatory standards of the Central Bank, recognition of the bank’s sufficient financial stability and the non-application of certain supervisory response measures to the bank. Moreover, any bank has two attempts to pass inspections based on these criteria.
The Law “On Insurance of Individual Deposits in Banks of the Russian Federation” was adopted at the end of 2003 and came into force on December 27. In the spring, the Central Bank began to evaluate and inspect banks within the framework of this law, although the process was delayed this time too. At first, officials planned to announce the first results of the inspections in July, but in August they said at Neglinnaya that so far the documents for the meeting of the Banking Supervision Committee were not ready for any bank that had passed the inspection.
First come, first served
So, in the process of creating an insurance system, a decisive stage has arrived. The deposit insurance fund, managed by the DIA, amounts to 2.6 billion rubles. at the expense of the state contribution, the Central Bank checks and announces the banks - members of the new pool, and these banks begin to pay their contributions to the fund (the annual contribution is 0.6% of the volume of deposits). Will this stage pass painlessly for the market and the authorities? Apparently, the White House is not yet sure of this. A certain concern of officials is indicated by the statement of the Central Bank and the DIA that appeared on Friday, according to which the order of admission of credit institutions to the insurance system does not indicate the level of their financial condition. The newspaper’s interlocutor at the agency says that the statement is a kind of “part of the dialogue between the regulator and the market,” and it was made precisely in response to a certain unrest in society. “The fact is that the first group of banks receives a so-called technical advantage over the rest - their depositors will be insured earlier. But in reality, this is a rather dubious advantage, because within a month the next participants in the system will be announced,” explains a representative of the DIA.
Previously, some bankers feared that the “technical advantage” could lead to a serious shift of private depositors from not yet insured banks to insured ones. “Banks with an unstable reputation are most exposed to this risk,” says one of them. The recent story with Raiffeisenbank, which, according to some media reports, allegedly received a letter from the Central Bank about problems with entering the insurance system, showed: the selection organized by the Central Bank may be the subject of unfair competition. However, Probusinessbank President Sergei Leontyev calls the procedure for publishing CBN decisions “increasing openness and information transparency in the relations of the Central Bank with the banking sector”: “This will only increase confidence in the Central Bank and in the banks themselves.” Deputy Chairman of the Board of MDM Bank, where an inspection of the Central Bank is now beginning, Irina Busheva believes that “everything will go smoothly if the media does not exaggerate statements that, for example, Raiffeisenbank is already included in the DIA register, and MDM Bank is - No". In her opinion, the results for the largest banks will be announced closer to the end of the year: “Checking a large bank takes longer: can you imagine what it means to check an organization that has 12 branches in Moscow and 40 branches?”
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From the law “On insurance of deposits of individuals in banks of the Russian Federation”
Article 11. Amount of compensation for deposits
“Reimbursement for deposits is paid to the depositor in the amount of 100% of the amount of deposits in the bank in respect of which the insured event occurred, but not more than 100,000 rubles.”
“If a depositor has several deposits in one bank, the total amount of obligations of which on these deposits to the depositor exceeds 100,000 rubles, compensation is paid for each of the deposits in proportion to their size.”
“If an insured event occurs in relation to several banks in which the depositor has deposits, the amount of insurance compensation is calculated for each bank separately.”
Article 49. Features of the return of deposits of individuals in credit institutions in which the Bank of Russia participates in the capital (Sberbank of Russia. - Ed. ) in the deposit insurance system
“Return of deposits of individuals in the amount exceeding the amounts of compensation determined by this federal law for deposits in credit institutions in which the Bank of Russia participates in the capital, under bank deposit agreements or bank account agreements concluded before October 1, 2004, if these agreements do not any changes and additions were made after September 30, 2004, is ensured by the subsidiary liability of the Russian Federation for the depositor’s claims to the bank in the manner provided for in Article 399 of the Civil Code of the Russian Federation, until January 1, 2007.”
Article 44. Requirements for participation in the deposit insurance system of banks that have permission from the Bank of Russia on the day this federal law comes into force
"1. A bank that has a permit from the Bank of Russia on the day this federal law comes into force is recognized as meeting the requirements for participation in the deposit insurance system if it simultaneously meets the following conditions:
1) if the bank’s accounting and reporting are recognized by the Bank of Russia as reliable;
2) if the bank complies with the mandatory standards established by the Bank of Russia;
3) if the financial stability of the bank is recognized by the Bank of Russia as sufficient;
4) if the measures provided for in Article 74 of the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”, Article 20 of the Federal Law “On Banks and Banking Activities”, Article 3 of the Federal Law of February 25, 1999 No. 40-FZ “On Insolvency” (bankruptcy) of credit organizations” do not apply to the bank, and there are no grounds for their application based on the results of a thematic inspection.”
According to the Bank of Russia, the Central Bank is considering 1,137 applications from banks, and a preliminary analysis has been completed for almost all of them. As of September 16, 2004, thematic inspections are carried out in 231 banks, and in 531 banks these inspections have already been completed. In other banks, the start of thematic inspections is planned for September-October of this year. All subject reviews must be completed by the end of December. The Banking Supervision Committee plans to issue opinions on banks wishing to join the deposit insurance system: on first applications - by March 27, 2005, on repeated applications - by September 27, 2005. Yuri VERETENNIKOV |
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