08/14/1998 07:50:35 Russia bank association sees no systemic crisis
MOSCOW, Aug 14 (Reuters) - Russia's banking association
denied on Friday the country was in the midst of a wide-ranging
"I do not think there is a systemic crisis of banks,"
vice-president of the Association of Russian Banks, Vyacheslav
Zakharov, told Reuters.
Zakharov, whose organisation represents Russia's commercial
banks, said the central bank was the lender of last resort in
the market and it would not allow big banks to go bankrupt.
The central bank was likely to help banks on an individual
basis after they had fulfilled any requests that the central
bank made of them, including a change of owner, he said.
He said the central bank's efforts would aim at having the
maximum effect for the minimum effort.
It was the largest banks which were having most problems on
the markets because they were the most active in interbank trade
and in buying Russian treasury bills, he said.
All Russia's markets have been thrown into panic this week,
fearing a rouble devaluation and that Prime Minister Sergei
Kiriyenko will be unable to pull Russia back from the brink of
The interbank market has been particularly hard hit, with
trade grinding to a halt and some banks failing to make
The T-bill market has seen yields soar to unprecedented
levels of 200 percent for paper maturing in a month.
Zakharov said downgrades of Russian banks by international
rating agencies was a reflection of the whole Russian economy
rather than just the financial sector.
The downgrades would make it more difficult for Russian
banks to obtain credits abroad, he said.
((Svetlana Kovaleva, Moscow Newsroom, +7095 941-8520