PRESS: Cbank to share bailout losses with bank former owners

MOSCOW, Mar 28 (PRIME) -- Russia’s central bank seeks to share expenditures on bailout of banks and insurers with their former owners by charging them lost profits from the money spent on financial recovery, business daily Vedomosti reported on Wednesday.

The proposal is part of amendments to the bankruptcy law prepared by the Finance Ministry and the central bank for the second reading at the State Duma, the parliament’s lower house.

The size of losses will be defined based on the fact that the central bank could have not provided funds for bailout free of charge or at a preferential rate and could have placed them at a key rate. The damage will be assessed both during injection of funds into a bank capital and provision of funds on condition of repayment at a rate below the market one, the central bank’s Deputy Chairman Vasily Pozdyshev told the daily.

After the introduction of an interim administration the regulator uncovers that decisions and actions of people, who controlled the bank, were the reason for significant losses. The proposed amendments will raise efficiency of recovering losses in court, Pozdyshev said.

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