Russian Premier says banking sector does not fulfil one of its major functions

According to Russian prime minister Mikhail Kasyanov, the country's banking sector does not fulfil one of its major functions: investment into production.

At a press conference in Kaluga, the prime minister pointed out that the industrial sector cannot receive preferential credits develop dynamically as a result. Whereas domestic production capacities can be modernized only through investments, both internal and foreign.

The premier urged re-invigoration of the banking reform in Russia in the current year and resolution of the issue of financial market regulation.

According to Kasyanov, the financial market is simply non-existent in Russia today. Kasyanov indicated that "in the wake of the 1998 crisis the country's financial market ceased to exist, but that market provided capital and investments to industries, mostly to export oriented ones." In the premier's opinion, "we have lost time and have to make up for it. "