Chief economist says EBRD sees more bailouts of Russian banks

LONDON, Nov 8 (PRIME) -- The European Bank for Reconstruction and Development (EBRD) does not rule out that the Russian banks may have to undergo new bailouts and hopes that the central bank will improve its oversight, Chief Economist Sergei Guriyev told reporters late on Tuesday.

He praised a new bailout mechanism through a fund for consolidation of the banking sector, which the regulator applied to Otkritie Financial Corporation Bank and B&N Bank, as a modern instrument, but added that risks of new bailouts are high.

“The Russian economy has undergone through a serious crisis, many assets lost their value, including the assets into which banks and their clients invested, this is why we have to give credit to the central bank for the way that it is carrying out these bailouts without creating nervous or panicky situations on the market,” he said.

But the bailouts of the two large banks became necessary because of mistakes in oversight made over the past two or three years. “The problems of the banks that are being bailed out did not appear 10 years ago, but two or three years ago. But we know that central bank executives replaced the heads of the banking oversight, and we can hope that now the quality of the banking oversight will improve significantly,” he said.

End

.