Russian government discussing banking system strategy

Thursday's cabinet session did not include the banking crisis on the agenda, though the ministers discussed the development strategy of the Russian banking sector until 2008. Prime Minister Mikhail Fradkov said, "public deposits in credit organizations have been growing recently," which points to increased public trust in the banking system.

On the other hand, Finance Minister Alexei Kudrin admitted that the people's trust in small banks had diminished and some credit organizations "whose names are widely known" have problems. What the minister said next promises an increase in the number of martyrs: "The Central Bank is acting according to plan."

The development strategy was approved in general and sent back for two weeks' worth of detailed polishing. It is clear that supervision of banks will be strengthened, which can be viewed as a positive decision because it is designed to increase the transparency of the banking system. Bankers approved the document as a whole. The government decided not to allow foreign banks to open branches in Russia. According to Kudrin, "we will certainly return to this question in the future, in 7-8 years."