Add to favorite
Subscribe to our Newsletters Subscribe to our Newsletters Get Daily Updates RSS
russian visa

Significant Risks in the Russian Financial System
January 28, 2020 17:19

The Accounts Chamber announced significant risks inherent in the Russian financial market. Based on the results of the audit of the Central Bank, auditors recognized that the development of the country's financial market is not comparable to the scale of its economy.

Significant risks are inherent in the Russian financial market, and its level of development is not comparable to the scale of the Russian economy and its needs for financial resources, primarily in investments. This conclusion is contained in the report of the Accounts Chamber, which analyzed the main directions of development of the financial market for 2016-2018 and for 2019-2021.

“Despite the almost complete implementation of the action plan for the past three years (97.8%), we mainly failed to achieve the expected results,” the document emphasizes. Target values for 8 out of 13 key performance indicators have not been achieved, and out of 7 indicators for the development of financial market sectors, only one has been achieved - in terms of the assets of insurance organizations.

The Accounts Chamber notes that in recent years Russia has risen in the Global Competitiveness Index from the 45th to the 43th place. But Russia  did not improve its position in developing the financial market, occupying the same 95th place as in 2015-2016.

“In terms of the stability of the financial system, we occupy the 120th place, and in terms of the size of the financial market - the 77th place. This does not correspond to Russia's positions in nominal GDP and in purchasing power parity – 11th and 6th lines, respectively,”  Alexei  Savatyugin,  the author of the report said.

The Accounts Chamber cites data from the Central Bank, according to which the total volume of the largest sectors of the financial market of Russia in relation to GDP decreased from 110% of GDP in 2016 to 103% of GDP in 2018, which is significantly lower than the maximum value achieved in 2007 (141% of GDP) . The number of financial market institutions was significantly reduced - up to 1.5-2 times in individual sectors, which "leads to a decrease in competition and indicates the difficulty of new entrants to the financial market."

According to the auditors of the Accounts Chamber, most of the problems are in the banking sector. Low growth rates affected the financial market as a whole. For 2016-2018, the value of banks' assets and equity increased in real terms insignificantly, while their number decreased by 1.51 times, and the degree of concentration in the market increased. Lending to the non-financial sector over the years has significantly decreased in real terms, and in nominal growth amounted to only 70.9 billion rubles, which is not comparable to the growth in lending to individuals - from 4.2 trillion rubles.

“The indicators of the Russian banking system during the period under review indicate problems in the development of this largest sector of the financial market, the low level of lending to the Russian economy and the presence of significant reserves   to meet the challenges of accelerating economic growth,” the Accounts Chamber said in a report.

The Bank of Russia
generally agreed with the conclusions of the Accounts Chamber. “Most of the conclusions accurately note the problems that accompany the development of the financial market,” Sergei Shvetsov, First Deputy Chairman of the Central Bank said.

Author: Anna Dorozhkina

Tags: Russian economy Central Bank    

Next Previous

You might also find interesting:

Russian Political Leaders Congratulated Donald Trump Russian Academy of Sciences Reports On Russian Economy Russia welcomes eight new urban agglomerations Russian electronic gas platform makes gas trade rise The Cherkizovsky Market revival

Comment on our site

RSS   twitter   facebook   submit

Bookmark and Share

search on the map
Voronezh   Russian Architecture  Macedonia  Elbrus  Russian politicians  poll  St. Petersburg  Power Museums  travel to Russia  Russian regions  Mercedes-Benz Fashion Week Russia  Fashion  Russian customs  Russian business  terrorism  Republic of Tatarstan  health  Boris Grebenshchikov  Moon Rovers  Confederations Cup  Russian tourism  Exhibitions in Moscow  Russian Cinema  Festivals in Moscow  Archaeology  Sberbank  Gagarin Cup  Russian political parties  State Russian Museum  Roskosmos   Russian tennis  All-Russian Festival Of Military History Clubs  Sergei Lukyanenko  Russian people  Republican Party of Russia  medicine  Gerard Depardieu  Teletskoye Lake  Yekaterina Baibayeva  Mir submersibles  Urals brand  Russian cuisine  Lyudmila Gurchenko  Red Arrow  Khabarovsk  Moscow  helicopter tours  Russian space exploration  Book Illustration  ZDDZ London 

Travel Blogs
Top Traveling Sites