Russian Authorities Considering Bank Bailout Plan
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According to an FT article, Russian officials are considering an even more encompassing bail out of its banks than the U.S. has undertaken. To do this, the Russian government will take large stakes in troubled banks, issuing OFZ treasury bills and also taking Board seats and veto rights.
With about $100 billion in domestic loans coming due by the end of this year, the need for some type of plan is essential. Analysts believe such a move would unveil the "true level" of banks bad loans, with hopes that these assets could be cleaned up by next year. Furthermore, recapitalization funds which will be needed to smooth the process, are expected to be limited to just the top 55 banks out of 1,100 total banks in the Russian system.
With about $100 billion in domestic loans coming due by the end of this year, the need for some type of plan is essential. Analysts believe such a move would unveil the "true level" of banks bad loans, with hopes that these assets could be cleaned up by next year. Furthermore, recapitalization funds which will be needed to smooth the process, are expected to be limited to just the top 55 banks out of 1,100 total banks in the Russian system.
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