Vnesheconombank Supervisory Board resolved to appoint Anatoly Vladimirovich Tikhonov as Management Board Member – Vnesheconombank First Deputy Chairman. Earlier A.V. Tikhonov was Deputy Governor – Deputy Chairman of the Krasnodar Territory Government.
Origin: Press Office of Vnesheconombank
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
An Extraordinary Meeting of Vnesheconombank Supervisory Board Held
V.V. Putin, the Russian Federation Prime Minister, chaired the meeting of the Supervisory Board of the Bank for Development – Vnesheconombank
In the past few days, as you are well aware – and we have already discussed it at the Presidium meeting today – the Government has taken a series of important measures designed to protect the national economy against the negative impacts of the global financial meltdown.
In my judgment, securing sustainability and resilience of the Russian banking system, ensuring a stable and continuous operation of Russian enterprises is a key objective. In addressing the task, the Bank for Development – Vnesheconombank (VEB) has an important role to play.
By the year-end, Vnesheconombank’s charter capital will be increased by RUB 75 billion. These funds could be used for the purchase of the Russian securities and insurance of transactions on the domestic financial market.
Another RUB 175 billion worth of funds from the National Wealth Fund will be transferred for management to VEB to maintain the stability of the Russian stock market, including the purchase of the Russian companies’ corporate bonds. Actually, I mentioned it just a couple of days ago.
Furthermore, the financial bailout package provides for allocation of RUB 950 billion as subordinated funding to Russian banks. It is going to be the so-called ‘long money’ extended for a 10-year term. These funds are intended for recapitalization of the Russian banks and, at the same time, should help resolve the liquidity crunch.
Thus, the Central Bank of the Russian Federation (CBR) will advance RUB 500 billion to the Russian Savings Bank (Sberbank) and RUB 450 billion to Vnesheconombank, which, in its turn, will distribute the subordinated funding as follows: VTB – RUB 200 billion, Rosselkhozbank – RUB 25 billion, other commercial banks – RUB 225 billion. However, the shareholders of such commercial banks should be prepared to use their own equity to recapitalize the banks.
More importantly, these banks must be sound and solid, have a high potential and high credit ratings.
Along with the stimulus package for the banking sector, we should obviously support the real sector of the Russian economy. Today, we have already discussed it in detail. Primarily, the real economy sector should be ensured access to financial resources.
Lots of Russian enterprises have been raising foreign credits. Regrettably, at present, this mechanism is not working any longer. Meanwhile, debts are coming due.
Obviously, we should come up with alternative solutions and seek to refinance our companies’ foreign borrowings drawing, first and foremost, on internal sources of refinancing. That could help to stave off the threat of selling off the Russian enterprises’ assets at knockdown prices that have nothing to do with the fair value of businesses.
To this end, the Central Bank is allocating USD 50 billion to Vnesheconombank, with the right to obtain refinancing of foreign credits to be granted primarily to companies that raised them prior to 25 September 2008, i.e. before the aid package was announced.
Today, we are going to approve the procedure and conditions VEB will have to apply when refinancing Russian enterprises. This decision is critically important. It would help to immediately address the needs of the Russian borrowers.
I am fairly confident the eligibility criteria for obtaining subordinated loans would be as follows:
First, a Russian company’s core business is to be focused on the real economy sector on the territory of the Russian Federation;
Second, its activities should be viewed as important either for the region’s economy or strategic industries. Equally important, we could not possibly afford ‘to lose’ assets, if it leads to negative social impacts;.
Third, we must refinance only those credits that were raised to deliver investment projects or acquire assets in Russia, in the Russian economy, I am emphasizing.
Finally, the bailout package is intended for those companies that will attract co-financing on their own, thus sharing risks with the state.
All these steps are specified in the amendments to the Federal Budget and in Federal Law ‘On Additional Measures for Supporting the Financial System of the Russian Federation’. The State Duma and the Council of Federation have already approved the Law. The amendments to the Budget are subject for discussion this week. I hope that the Russian Government and members of the Parliament will manage to arrive at the right decisions and agree their positions. There is no time to be lost.
By the moment the above acts become effective, Vnesheconombank should take all organizational decisions. The Bank should be gearing up to effect the required financial operations. That is why we promptly convened an extraordinary meeting of the Supervisory Board of the Bank for Development today.
Now, let us proceed with the agenda.
Origin: Internet-portal of the Government of the Russian Federation