“We have much more serious reasons to worry” - Finance - Kommersant
On March 10, the California bank Silicon Valley Bank (SVB), which specialized in lending to technology startups, went bankrupt. The SVB bankruptcy was the largest since the 2008 crisis and the second largest in US history after Washington Mutual Bank. Following this, due to systemic risks, the New York Signature Bank was closed, the shares of the Swiss Credit Suisse fell by 30%, and Moody's lowered its outlook on the American banking system to negative. Kommersant asked financiers how the crisis in the United States could affect the Russian financial system.
Georgy Luntovsky, President of the Association of Banks of Russia:
— Regulators in the US have already taken measures that should prevent the problem from growing. Perhaps these measures could be more prompt, but now it is important that they are being implemented and can stabilize the situation.
The consequence for us is that our regulator will take a closer look at interest rate risk. Our credit institutions and the regulator already have a fairly large experience of working in conditions of turbulence and uncertainty. Therefore, we should not be afraid, but monitor the development of events and realistically assess the risks.
Yaroslav Kabakov, Strategy Director of Finam Financial Group:
- If the situation with the crisis of American global banks spreads, then this will affect the capital markets for the needs of the Russian economy in the worst way. This market is still, to put it mildly, not very positive, but if the situation deteriorates further, the stagnation of financial markets will quickly lead to a decrease in demand for commodities.
We can get a double whammy here. For the population, this may result in a devaluation of the ruble, an increase in the budget deficit, and an even greater increase in the influence of the state in the economy. And if the real estate market in China collapses, for example, then our metallurgists, oilmen, and many other commodity companies will be very uncomfortable.
Vladimir Kozinets, President of the Association of Corporate Treasurers:
Russia is never afraid of anything! We now have much more serious reasons to worry. Unfortunately, or fortunately, the remnants of our financial market have already been cut off from large Western investors, whose panic moods could provoke a local collapse. What happened just adds its share of entropy to the current problems associated with raising rates, falling oil, accelerating inflation, low labor productivity, depreciation of fixed assets and other factors of instability, but I don’t think this is the last straw. Still ahead.
As for the banking crisis in the US, the key word here is "possible". Frankly speaking, I do not think that right now this will result in something global and serious. The public outcry of the recent bankruptcies was caused primarily by a large number of deposits in bankrupt banks, including the funds of start-up companies. They will be protected, and this is the main thing, which will allow to stop the domino effect. Of course, the investors of these banks will suffer, but against the backdrop of systemic cash injections from the state, people have lost the habit of really bad news. While bad news does happen, it's not always catastrophic.
Oleg Shibanov, Head of the Center for Macroeconomic Research, Sberbank PJSC:
- The basic scenario is as follows: the US Federal Reserve and the US Treasury are solving the problems of two banks and their depositors, other American banks will not be particularly affected by the outflow of depositors, these bankruptcies will not affect the economy of Russia and other countries. The story of the two failed banks is not systemic and is unlikely to lead to a financial crisis in the rest of the world.
First, Silicon Valley Bank and Signature Bank were not very large banks (about 0.9% and 0.45% of the assets of all US banks). Secondly, they initially operated on a risky business model. These banks attracted large deposits from start-ups, while only up to $250,000 were insured. At the same time, the sharp increase in Fed rates over the past year (by 4.5 percentage points) reduced the value of stocks, bonds, and bank loans. When depositors began to take money to spend on salaries and other expenses, banks did not find a way to add liquidity and attract new deposits. They had to sell bonds and lose money, after which the value of the bank's shares began to fall rapidly.
As a result, external management by the American Deposit Insurance Agency was introduced. All deposits will be returned, with the rest of the obligations of the banks is not clear. Since the support of depositors is guaranteed, the crisis is likely to be avoided.
Sergey Drobyshevsky, Director for Research at the Institute for Economic Policy named after E. T. Gaidar:
“I don't think there's much to be afraid of. We are well protected, shall we say, from banking and financial crises in the US and other countries by the sanctions imposed against us. The isolation of our financial and banking system plays a positive role in this case, in the sense that the mechanisms for transmitting their crisis in such a situation hardly work.
It is clear that there will be indirect negative consequences, for example, from the unfavorable level of oil prices, the negative impact of the crisis on the economies of countries, our partners, and so on. But in our financial and banking system, this will hardly be noticeable.
Vasily Koltashov, Director of the New Society Institute:
- Undoubtedly, this crisis is dangerous, it can pull down world prices. Now, for example, oil prices have fallen. But it can also be useful for the Russian economy, because the US will lose strength, which will ensure a further change in the balance of power in the global global economic system.
The devaluation of the dollar at times or the announcement of the rate "zero" could improve the US economy. They have chosen a policy of raising the Fed's key rate, which means removing the props of the financial system and the economy. Now we should expect the development of problems in a controlled manner, when some structures will be saved and others will be destroyed. New crisis situations may open up, and it is possible that this will drag down world trade and much more.
A difficult economic year awaits us, the United States will strongly pull down the entire world economy. And we may find ourselves in a situation where it becomes unprofitable for us to supply goods to Western markets. We need to develop the manufacturing industry more energetically, copying entire layers of EU industry.
Natalia Tutova, Deputy Chairman of the Board of Zenith Bank:
— For several years now, the Bank of Russia has been pursuing a policy aimed at increasing the stability of the financial sector, so the development of a crisis in Russia, by analogy with the situation in the United States, is unlikely. The measures taken do not allow excessively risky operations of banks. Moreover, the high concentration of banking assets in Russia makes it possible not to fear a systemic crisis.
Last year, the Central Bank of the Russian Federation made regulatory easing, allowing credit institutions to quickly adapt to external challenges and the transformation of the economy. Taking into account the accumulated margin of safety, this does not threaten the stability of the entire system. Of course, some large banks may need additional capitalization as part of compensation for losses, but this does not indicate an increase in the likelihood of a full-fledged crisis in the financial sector.
Anna Kuznetsova, Deputy Chairman of the Board of the Russian Agricultural Bank:
- The crisis in the US banking sector may develop, but is unlikely to spread to us. Because of the sanctions and the isolation of the financial and banking sectors, we are now outside observers. The most difficult period was last year, but, having overcome all the difficulties, we have reached the restoration of profitability.
If we talk about the reaction of our stock market, then the impact of the banking crisis in the US has an indirect character on it. The fall in our stock market will not be so strong, since foreign investors are not working on it now and, therefore, will not withdraw money. At the same time, Russian shares are traded at low levels and remain undervalued. Since both trading volumes and the real free fleet of Russian stocks have now significantly decreased, market drawdowns on small volumes are quickly redeemed.
Yaroslav Lisovolik, Program Director of the Valdai International Discussion Club, Founder of the consulting company BRICS+ Analytics:
— Analysts on Wall Street are already beginning to draw parallels to the current financial instability in the US with the 2008 crisis, but this time the impact of the American crisis wave on the Russian economy will be weaker due to large-scale sanctions against Russia. The most significant effect could be a drop in oil prices, whose impact on the exchange rate could be exacerbated by investor risk aversion and a stronger dollar.
The effect on the real sector of the Russian economy will be limited by a significant reorientation of trade and investment flows towards Asian countries, which will be affected by these crisis phenomena to a lesser extent than the US and Europe.
Alexey Tretyakov, General Director of Arikapital Management Company:
- Do not worry, but we must seize the moment to invest in Russian assets within the country. The volume of the economy and the money supply will grow, at least through emission and inflation. The stock market is very promising. Such "blue chips" as, for example, "Sberbank", banks similar to it, not tied to international activities, "Severstal" and metallurgy in general, ALROSA, "Phosagro" have passed the most difficult year and feel confident. Even Gazprom shares could turn a profit, despite the upcoming write-offs of assets in Europe.
Banking problems in the US (Silicon Valley Bank, etc.) and in Europe (because of Credit Suisse) will not affect us in any way. Although SVB is not comparable to the failure of Lehman Brothers, it is reminiscent of the March 2008 collapse of respectable investment bank Bear Sterns that preceded it. Then it became clear that something was going on that went beyond the usual market correction.