“Over the long term, real risks always materialize”

How effective are the regulator’s proposals for differentiating contributions to the Deposit Insurance Fund and what other options are there for extending the maturity of raised funds, the head of the financial analytics center of Sberbank (MOEX) told Kommersant. SBER) Mikhail Matovnikov.

— At a meeting with bankers in early March, the head of the Central Bank, Elvira Nabiullina, said that it was necessary to introduce a differentiated approach for banks in paying contributions to the Deposit Insurance Fund so that they would bear financial responsibility for risky policies. Do you think this could be an effective tool? Under what conditions?

— The use of differentiated contributions to the DIA as a measure to limit risky behavior is not an innovation; it has been working since 2015. Deductions depend on the bank’s risk group. There are currently three types of bets – basic, additional and increased additional.

This was initially introduced when the DIA was faced with an increase in payments in banks, which, on the eve of the revocation of their license, sharply increased the volume of funds raised due to an aggressive interest rate policy. Therefore, contributions began to depend on how much the bank’s maximum borrowing rate exceeds the market average. Then the contributions were tied to the bank’s risk group according to the Central Bank’s methodology, and the dependence on rates was abolished. If a bank is classified with the appropriate risk category, it has to pay increased fees. Nevertheless, in 2017, the DIA had to borrow 842 billion rubles from the Central Bank. for payments to depositors. Five years later the debt was repaid.

— Is the tool working normally now?

— Now it doesn’t work at all. In 2020, the increased premium and increased additional contribution rates were reduced. And from February 2022, the DIA reset them to zero. In December 2023, the decision was extended until the first half of 2024.

When the system worked, the main complaint was that the “premium” on the deduction rate was not closely related to the probability of bank failure. Therefore, the increased premiums were not high enough to fully offset the additional risk to the insurance system.

— The Central Bank announced that contribution rates will be differentiated according to the terms of deposits – lower for long-term ones than for short-term ones. Thus, the rate should stimulate the lengthening of liabilities. How effective is it?

“From my point of view, until now such a scheme has been abandoned, since it was clear that it allows for the creation of a variety of variants of abuse. You can arrange deposits in such a way as to qualify for low premiums or an increased insurance limit. For example, start a long deposit, but with the right of early withdrawal and repayment. It ends up in long-term deposits even if it is “on demand”. In general, if the term of the deposit is determined by the bank account to which the money is deposited, banks may well begin to structure products in such a way as to pay less contributions to the DIA.

Or you can open a long-term irrevocable deposit and, for example, indicate that the first three months the rate is 10% per annum, and then – 1% per annum, and if the deposit is terminated early, the accrued interest is retained. Naturally, you do not expect these funds to remain there for the entire ten years. But the contribution is de jure ten years old. And the fact that the client came and closed it ahead of schedule—he has every right to do so under the Civil Code.

You can come up with many products that satisfy the requirements of a long-term deposit and, accordingly, reduced contributions to the DIA. It is not at all obvious that this will change the real maturity of deposits in the banking system in any way, because it depends on completely different parameters.

The key question: how to make the contribution differentiation tool so that it does not create incentives for fictitious product design.

— For banks, can savings on fees be materially tangible? Is it really possible to stimulate the lengthening of liabilities with this?

– Certainly. The volume of household deposits in the banking system exceeds 50 trillion rubles. This means that even at the base rate (0.12% per quarter), banks transfer more than 240 billion rubles to the DIA per year. in year. You can save a lot here; you only need to change a few parameters of the legal documentation. But the effective maturity of deposits may not increase.

— They want to make such deposits irrevocable, that is, they cannot be withdrawn ahead of time.

– This is prohibited by the Civil Code – I’m afraid it will have to be changed first. It is more realistic to apply a similar measure to savings certificates that already have an irrevocable status. At one time, these financial instruments were popular precisely because there were no contributions to the DIA at all. And banks shared the savings with clients. As a result, the rate on savings certificates was higher than on other instruments. The savings were formed precisely due to the absence of contributions to the DIA, and not the “irrevocability premium.”

The additional premium to the rate for an irrevocable deposit is potentially much less than the premium that the bank can provide to the client by sharing the savings on DIA contributions. So in this case, the Central Bank’s proposal to reduce contributions to the DIA may work, promoting an increase in rates on such instruments.

— However, do banks actually need to lengthen their liabilities?

— Short liabilities are a problem of volatile interest rates. Why don’t we have, for example, five-year deposits? Because it is not clear at what rate to attract them. This is a completely non-regulatory issue. Normal rational financial behavior of depositors and banks. In principle, it is much more useful for long-term liabilities to develop an instrument of floating rates on borrowed funds.

— At the end of 2022, the DIA paid off the loan to the Central Bank for the debt taken out against the backdrop of the massive revocation of licenses. There have been no bank failures for a long time. Recent cases of license revocation were mainly due to AML/CFT violations. How justified is rate differentiation in such a situation?

— The DIA needs to not only repay the debt, but also restore the volume of the deposit insurance fund to the target. After this, the mechanism for reducing contributions usually begins to operate. The current base rate of 0.12% per quarter is itself increased, since the law sets a minimum level of 0.1%.

Given that there have been almost no bankruptcies over the past couple of years, it may seem that differentiation is irrelevant. But over the long term, real risks always materialize, so the very intention to return to differentiation of contributions can only be welcomed – and it is important to maintain the connection between contributions and the real riskiness of the bank. In principle, the regulator can reduce fees for certain categories of deposits. Banks, naturally, will not be against any form.

Interview conducted by Olga Sherunkova