By Vestnik Kavkaza
Yesterday, Barack Obama stated that the USA and Europe are ready to launch additional measures which would damage whole sectors of Russian economy, even if they damage themselves in the process. The West will launch sanctions, if Moscow continues attempts to undermine Ukrainian independence.
“What we have today is a message rather than sanctions. For examplethe “Russia” Bank – it is a message about what could happen to the banking system of Russia,” Alexander Abramov, professor of the chair of the stock market and investment market of NRU-HSE, thinks. “It is a yellow card. In fact at the moment the sides develop the matters. Crimea is a situation of no return; so, the problem will last for years or even decades. And sanctions will be launched gradually.”
However, according to Abramov, “nobody in the West is interested in sharp launching of sanctions, as their business, banking system, and economic growth shouldn’t suffer from this. But everybody will suffer. The most painful things which can happen in a midterm are connected with our financial system. Cut-off of banks from the international payments system will touch on all users of credit cards. Moreover, at the moment, the USA Securities and Exchange Commission are calling major portfolio investors in America and finding out how much Russian emitters they have.”
“The whole market begins to cheapen, but stock of public Russian banks is falling in price faster than the market. First of all, Russian investors will withdraw from the assets, and an additional outflow is expected,” the analyst of Investcafe, Mikhail Kuzmin, predicts. “Sanctions influence indirectly the whole banking system and financial system. At the moment the Central Bank has raised the key interest rate up to 7% by 1.5%. As a result interests are growing, i.e. funding is growing. It seems certain banks will raise deposit interest rates. It means banks need additional liquidity which they lack. As there is no trust in the ruble, foreign exchange investing is growing. In the near future loan interest rates will grow. As risks of unsecured credits are big, banks will also have to reduce paces of giving loans. Development of the banking system is slowing down, and now the situation may become worse due to launched sanctions and the growing key interest rate. It will influence citizens directly, as all interest rates will grow for them. At the moment the banking system deals with the current sanctions, but still problems with funding and access to international loans are worsening. And the banking system will have to orient at the internal market.”
