Expert Belyaev ambiguously assessed the activities of the Central Bank on two scales

There are no “people without conscience” left in the Russian banking system

At an educational marathon as part of the Russia exhibition, the head of the Central Bank, Elvira Nabiullina, said that the domestic banking system is currently absolutely healthy and capable of helping the economy. “We were forced to revoke a large number of licenses and rehabilitate some banks. This caused serious resistance, but now the banking system is absolutely healthy,” said the head of the regulator.

She recalled that in the 90s, people without competence and often “without conscience” came into the banking system due to fairly simple regulation.

In the “dashing 90s” it was easy to collect money from gullible Russians, and then safely take it abroad. At that time, banks were very weak, without their own capital. The system had to be cleaned, because it is the circulatory system of the economy.

But, as they say, all’s well that ends well.

In total, since 2013, the Central Bank of Russia has withdrawn 452 unscrupulous and unviable banks from the market, and 15 players have undergone financial rehabilitation. “This has led to the fact that in recent years we have not allocated money; on the contrary, the banking system itself helped the economy, restructured loans to both people and companies,” the head of the Central Bank emphasized.

She also outlined her position on increasing the key rate. This is done solely to combat rising prices, otherwise the economy may fall into an “inflationary spiral.”

There is no need to explain to Russians how this spiral unfolds. We remember from the 90s of the last century, when our retail prices for essential products (and not only!) in 1992 increased 25 times. Fearing rising prices, people are starting to stock up on food. Manufacturers see that there is demand and raise prices even higher…

This is how the notorious inflationary spiral unfolds.

I would like to hope that such a price nightmare in Russia will not happen again. Including thanks to the position of the Central Bank, which “keeps its finger on the pulse.”

According to Candidate of Economic Sciences Mikhail Belyaev, since 2013, the Central Bank has carried out a truly powerful and useful operation to cleanse the system of unreliable elements operating in the semi-legal sphere.

“This is his merit,” he explains. – Here I would add a well-established system of fast payments, the introduction of plastic cards, supervision of the activities of banks… All this works properly.

However, the banking system itself depends on the general state of the economy. But the country’s economy as a whole, including through the work of the Central Bank, is not very stable. Regarding this part, there are certain questions for the regulator that are subject to discussion.

– What do you have in mind?

– When the key rate is high, it is difficult to place loans, which means that it will be difficult for banks to earn money and be in a profitable zone. Yes, they have the opportunity to work on exchange rates, charge commissions, and other instruments. However, lending activities require additional study.

– What rating on a 10-point scale would you give to the Central Bank?

– There cannot be a single scale here. Regarding the organizational aspect, I have already said that the score is very high, close to ten. 9 or 8 points. In emergency situations, the Central Bank works very well.

And the second scale is the bank’s work in managing macroeconomic processes using monetary levers.

Here I would give 3 points and let them say thank you. Industrial production cannot develop and take out loans at a high key rate.