Other banks are too small to carry large loans without exceeding loan concentration regulation, and syndication is virtually nonexistent because of mistrust among banks.
The large credit risk/bank capital ratio increased from 170 percent to 700 percent in 1998–99 for the system as a whole.
$12–14 for 9–12 months.
If these treasury functions performed for related corporate parties were carved out, the Russian banking system may already be effectively as much as one-fifth smaller than currently measured, assuming that roughly one-half of credit activity performed by FIG banks is with related parties.
The CBR argues that several technical factors, including the assumption of additivity, unduly inflate these estimates of losses. According to their preliminary calculations using slightly different, but also plausible assumptions, losses would be half as high.
22 banks lose less than 20 percent of their RAS tier 1 capital (1 state owned, 7 FIGs, 6 independent, 8 foreign). 28 banks lose more than 50 percent; whether these banks would be critically undercapitalized would depend on the size of their capital cushion, which is not known.
It should be noted that the last two points relate also to many other banks.
Only 32 companies are listed at the two major exchanges; an additional 322 companies are traded on the exchanges in an unlisted market.
Under the Law on Mandatory Pension Insurance, the second pillar pension scheme will be introduced in 2004 creating demand for investment. The second pillar pension scheme consists of multiple, defined contribution (i.e., funded) pension funds which are to be managed by competing private asset management companies.
Prepared by Credit Lyonnais Securities.
The staff understands that subsequently the CBR Board of Directors decided not to adopt the paper. Instead, the CBR is in the process of preparing a revised version of an earlier (1997) concept paper.