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Central Bank: “Government nailed Russian investor’s hand”

27.08.2014 18:21 / slon.ru

The Central Bank is preparing to retaliate against Western financial sanctions. “We need to adjust our tactics in dealing with Western partners”, CB First Deputy Chairman Sergey Shvetsov told the press today at the roundtable celebrating the megaregulator’s first year. Laws regulating the financial market will be amended. This particularly concerns the National Payment System Act (this Act was already toughened in May 2014, amendments in force since 1 July).

Today, Shvetsov says, the ‘adjustments’ are only beginning to be drafted. The protective measures will become part of the new “Financial Markets Development Strategy 2018”: this autumn, the Central Bank will present to the Government only the table of contents, with the bill due to pass to the State Duma only next spring. Shvetsov says that the current sanctions against Russia will not last long, and the CB is working on a back-up for the future: “The precedent is what is dangerous. It happened once, and there are no guarantees it will not happen again. It used to appear impossible, but now it seems probable”.

CB First Deputy Chairman refused to list the protective measures, quoting his own uncertainty regarding the changes and their possible repercussions: “This is new. This really came out of the blue for us”. Shvetsov promised, however, that the general trend towards making the Russian financial market part of the global community will continue, and none of the ideas that have been approved earlier – such as the International Financial Center – will not go to waste.

Essentially, Western sanctions mean less internal financing for Russian state banks and military corporations – they will be unable to take loans in the EU or the US. Asked whether the sanctions are unfair, Shvetsov said cagily: “I didn’t say they are unfair. ‘Fair’ is judgmental. I regret to see foreign countries use Russia’s involvement in the global financial market to put pressure on it for political gain, which has nothing to do with the financial market”.

The financial expert does not deny that more harm has been done to the Russian economy by the fact that Russia and the West are in conflict, prompting private funds and corporations to back out – not by the sanctions alone: “Great risks easily bring short-term money to Russia, then it leaves the country just as easily, adding nothing to economic growth. Whereas long-term investors have put on hold their cash flow to Russia due to the risks”.

Moreover, Shvetsov railed against Russia’s decision to confiscate pension savings for 2015: “The time has come to pull the internal investor into the spotlight. The nail that our Government has driven… not in the coffin, let’s just say, in the hand of the Russian investor, definitely drags down the process. But this will not change our plans”.

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