Headed for the exit

The Central Bank gets rid of risks

Yesterday, the Bank of Russia officially announced the cessation of issuing unsecured loans. According to experts, at present only a few credit institutions are experiencing problems with liquidity, and the withdrawal of this instrument will not affect the market in any way, especially since the conditions for obtaining such loans were unfavorable for most banks.

As noted in the regulator's message, from October 1, 2010, unsecured auctions will be suspended for periods exceeding five weeks, and from January 1, 2011 - for all periods. “The mechanism for providing unsecured loans by the Bank of Russia was introduced in the acute phase of the crisis (in the fourth quarter of 2008) and, in combination with other measures taken, helped overcome the systemic liquidity deficit in the banking sector,” the Central Bank said in a statement. “Currently, in conditions of stabilization of the situation in the domestic financial market, and in particular the normalization of the situation with the liquidity of the banking sector, the demand for this refinancing instrument has sharply decreased.”

Earlier this week, First Deputy Chairman of the Central Bank Alexei Ulyukaev announced plans to curtail such anti-crisis measures. He explained that the mechanism does not allow banks to correctly assess risks and increases them for the lender of last resort, that is, for the Central Bank itself. By July 1, banks owed the Central Bank 50.2 billion rubles. for loans without collateral.

“When the Western credit market closed to Russian banks as a result of the collapse of Lehman Brothers, the liquidity crisis developed into a financial and economic crisis due to the lack of effective government assistance instruments,” notes Maxim Osadchiy, head of the analytical department of the Corporate Finance Bank. — Towards the end of the year, such instruments appeared, however, due to the lack of practice in their use, the markets were literally “flooded” with state aid, which led to the collapse of the ruble at the end of 2008 - beginning of 2009. Despite huge injections of government money into the banking system, the economy's credit continued to decline, but the liquidity crisis was suppressed. At the moment, only a few credit institutions have serious debts on unsecured loans: AMT Bank (formerly BTA Bank), which owed 9.7 billion rubles as of June 1, Petroff Bank (4 billion rubles), International Industrial Bank (32 billion rubles). In the conditions of recovery from the crisis, the need for such an “anti-crisis” instrument as an unsecured loan has disappeared. The Central Bank received huge interest income from the unsecured loan program, but these income did not compensate the state for the losses incurred during the bank reorganization."

By deciding to provide unsecured loans to commercial banks, the Central Bank moved away from the practice of pre-crisis times, when borrowed funds were issued to financial organizations only on the security of reliable securities, including government bonds. “In this scheme, the opportunity to quickly receive money appeared for those banks that were not admitted to deposit auctions of the Ministry of Finance,” notes Salavat Khalilov, director of the center for work with financial institutions of Alfa Capital Management Company. “Unsecured loans from the Central Bank, along with auctions from the Ministry of Finance, were a rather specific instrument, which, however, fully corresponded to the spirit of the first stage of the Russian fight against the crisis,” says Pavel Gennel, CEO of the Capital Financial Corporation. “Provided on very favorable terms, these loans were subject to so many requirements for the recipient that they were available mainly to banks from the top ten, which used them both to maintain liquidity and for speculation in the then volatile market.”

Nikolay KOCHELYAGIN