OREANDA-NEWS. December 17, 2007. The press conference, “The Russian Banking System – Results of 2007,” was held in the press center at ITAR-TASS on December 11, 2007. Key representatives of the banking community and governmental authorities took part. Chairman of the Management Board of Bank Electronika, Vladimir Romanov, spoke on behalf of the financial institution.

In addition to Mr. Romanov, Garegin Tosunyan, president of the Association of Russian Banks; Pavel Medvedev, deputy, State Duma of the Russian Federation; Alexander Popov, chairman of the Management Board of Rosbank; and Ishtvan Lendel, general secretary of the Association of Banks of Central and Eastern Europe, answered questions from journalists.

In the opinion of those who took part in the press conference, Russia’s banking system continues to advance vigorously, notwithstanding serious volatility in global financial markets. Equity of domestic banks in the first ten months of 2007 grew by more than 50 percent to reach 2.5 trillion rubles. Assets of the banking system exceed 18 trillion rubles, which is more than a 40 percent increase. Credit extended to individuals grew by 46 percent and reached three trillion rubles. Lending to legal entities also rose by 46 percent, to 8.4 trillion rubles. These indices demonstrate that the banking system preserves the trend toward progressive development that has been observed for the last four to five years.

The chairman of the Association of Russian Banks, Garegin Tosunyan, noted that in 2008 the ARB will have do a great deal to maintain soundness in the banking system and to increase the role and significance of the financial market in Russia. Particular attention, Mr. Tosunyan observed, must be given to development of the private sector. “We must not rely solely on the evolution of government institutions. Private capital in the financial markets is very important. It is essential to stimulate credit mechanisms. We must raise the status of the country internationally, as a county with a fully developed financial market,” Mr. Tosunyan said.

State Duma Deputy Pavel Medvedev recounted how, during the last four years, the development of the banking system of Russia had been subordinated to the creation, confirmation, and development of a supervisory system: “The instrument through which supervision was established was the law on deposit insurance. That law was adopted by the Duma’s third assembly and evolved over the past four years. The ARB, since its very inception, has supported the law, which guarantees residents that their deposits will be returned. The law works so well that the ceiling for payment has been raised from its initial 100,000 rubles four years ago to 400,000 rubles today.”

Vladimir Romanov, Chairman of the Management Board of Bank Electronika, touched upon problems of developing banking infrastructure in Russia. He told journalists: “A program to bring contemporary banking to the country was adopted during the ARB congress in early April 2007 and at this moment is being realized fully. We have large plans and many challenges. Despite the amount of credit we have extended, the country has insufficient infrastructure to meet demand from the general public. We would not like to see lawmakers take initiatives that would give businesses not holding banking licenses access to the banking services market. Cooperation between the banking system and the public has grown, but there remain significant problems that we intend to resolve – the competence of the general public and the behavior of banks.”