“Too big to stay”: The Central Bank explained why it spent 1.5 trillion rubles on the rehabilitation of the three largest private banks

on the reorganization of banks since last September have been spent In total , 2.6 trillion rubles (of which 1.5 trillion were spent only on the three largest ones) and even more may be spent. But there is nothing to regret, says Elvira Nabiullina. . Today, she gave her first programmatic interview with Vedomosti since then, in which she spoke about how the Central Bank cut the bank account, where to look for money to fulfill Putin's "May decree", what will happen to pension savings and the key rate

“These banks are not only too big to fail, but also too big to stay as it is”

• Sergey Gavrilov, the manager of Alfa Capital management company, was the first to warn his clients about the Moscow banking ring last year, who wrote that the fate of several large banks at once could be decided before the end of 2017. Gavrilov was called in for explanatory work at the Central Bank, but there really was a ring, Nabiullina now admits.
• It included banks, pension funds, and "some other financial institutions" - they carried out mutual operations in order to circumvent the regulation of the Central Bank and "camouflage risks." As soon as one of the participants in the scheme began to have problems, they responded to everyone else. Of all the banks listed by Gavrilov, only MCB managed to avoid reorganization, not without the help of Rosneft, for which it became a new reference bank.
• The size of operations within the ring, according to Nabiullina, amounted to "at least tens of billions of rubles" (more on them can be read here ). Analysts believe that even the regulator does not see the whole picture, and the value of the ring can be hundreds of billions.
• Sanitation of only three banks of the ring cost 1.5 trillion rubles. Their former owners returned 100 billion, but this is not enough. The Central Bank sent appeals to law enforcement agencies for another 260 billion rubles, including 20.5 billion for Otkritie. The regulator still hopes to recover this money through amendments to the law, according to which damage can soon be presented to the former controlling owner of the bank being rehabilitated .

The entire interview with Nabiullina can be read here (paid material), but it is really big. Briefly retell what else is important she said:

• Despite the fact that the head of the Central Bank takes part in all key meetings in the government on the economy, it is not clear how the new May orders of Vladimir Putin will be implemented. There are few options - to raise taxes, increase loans or spend oil and gas revenues. Nabiullina clearly opposes only the latter option.
• Even if an additional 8 trillion rubles for infrastructure, healthcare and education are found, this will not give the desired economic growth of 2% or more.
• Inflation is under control, but, as you might guess, there will be no rush to reduce the key rate of the Central Bank - because of the sanctions. The regulator is guided by the fact that they will not be removed, not softened, and probably strengthened.
• You can forget about the restoration of the mandatory funded system in the pension system. It is much more correct, Nabiullina believes, to launch the mechanism of individual pension capital, in which citizens save up for their own pension, and the money set aside for it remains their property, but it is unlikely to work before 2020.

What do I get from this?

The main feeling of the interview is the feeling of uncertainty. The Central Bank, along with business and the population, remains in the dark about how the government will decide to finance the growth in spending and what will happen to taxes.

Irina Malkova