The complete banking trace. Part II

We have to make our banks work for the rise of the Russian economy

It was a midday of June of 2002 outside the conference hall of the Krasnoyarsk Education House. During the forum “Practical issues of the development of the Russian banking strategy,” Alexander Bolshakov, a PricewaterhouseCoopers partner, released a statement, which was almost like a revelation.

“About a hundred banks know how to draw up accounting in compliance with international standards. One thousand two hundred other banks have little knowledge of what this actually is. We are deeply concerned about the process of the introduction of those standards. The Central Bank of Russia also doubts the institution of the standards of international financial accounting only in the banking field. These standards are also needed in other economic branches.”

Did you get the idea? The entire Russian business accounting is going to be “raised to the international level.” They might also say that all office work must be done in the English language.

Seriously, what is this all about? This is a large operation of the transformation of the banking accounting system. The success of this transformation is very unlikely. Yet, the Central Bank suggests its total expansion. Even the Bolsheviks’ attempts were more expedient in 1917, when they offered to abolish the use of money in Russia. They also proclaimed the transparency of economic relations! They say that humor is a form of absurd logic. However, no one even smiled in the hall when Alexander Bolshakov spoke those words.

The meeting became more lively after a speech from American specialist Richard N. He drew up ratings for Russian banks. Such ratings are used by foreign financial institutions. Richard N. also teaches Russian banks business ethics principles. Richard spoke good Russian. With the help of a colorful slideshow, he explained why Western investors have such a distrust towards Russians. As it turns out, Western economists think that Russian standard investment schemes look like money laundering. I think that it would have beeen more fun for the people present if the expert concluded that American corporations learned how to make fake business accounting from their Russian colleagues.

It seems to me that the public forums of our home businessmen look like political party assemblies. The audience did not take the speeches from the tribune seriously. Russian television sometimes broadcasts old footage of communist parties assemblies. But they do it for fun, in order to show something like the theatre of absurdity. I wonder what the next generation will think when they watch videos of present reports and speeches.

Then there was a speech from Vladimir Tarachev, the chairman of the State Duma Committee for Bankruptcy. “Spending on the liquidation of Agroprombank (Agricultural Industrial Bank) tripled the payments to the creditors of the bank. What cynical business!” – he exclaimed.

As it turns out, over 400 million rubles were spent on the arbitration manager's team - $100 per hour. Only 100 million rubles were left for the creditors. What did you expect, mister? We are instituting international standards.

The only material that I wrote on the base of the results of the conference was an interview with Yury Chikhanichin. This official is the first deputy chairman of the committee for financial monitoring of the Russian government. In 2000, FATF included Russia on the list of countries that have weak counteraction against criminal financial deals. Russia stood next to Ukraine, Israel, Cyprus, and several other countries. Today, the managers of the Russian financial intelligence hope that their current efforts will be adequately estimated by the world community.

We speak the Russian language, and we can easily understand Russian words. Nevertheless, if you read shorthand records of a meeting, or listen to a tape of one, you will have an impression that all this talk of bank reform sounds like a riddle.

“We have to make our banks work for the rise of the Russian economy,” – Valery Zubov said. Why is that? Banks “owe” only depositors. If they are ordered to conduct some activity, then there should be at least a strict system of state policy references in this field. Is there such a system?

The question of “extension” has been discussed recently. The raise to the level of 100 million euros would force 90% of lending organizations quit the game. At first, “reformers” and central newspapers frighten bankers. Then they conduct conferences in order to pacify the banking community. Do they call it a strategy?

The government stated that the banking field is not involved enough in the economy. The government claimed that the banking field does not criticize the economy properly. What is the proper way to do it, I wonder? About 60% of investments in the Krasnoyarsk region make up the funds of enterprises. This index becomes higher in Russia as a whole. But how can banks reduce the amount of a credit rate if this rate is determined by the refinancing rate of the Central Bank? Isn’t it the state that must be an example of investment policy? There are many questions, but no answers.

Pavel Poluyan PRAVDA.Ru Krasnoyarsk

Translated by Dmitry Sudakov