In its latest effort to counter financial instability – and show its commitment to maintaining order and support for the economy – Russia's central bank (CBR) has unveiled 7 new measures. Ranging from bank recaps to measures aimed at helping manage interest-rate and credit risks, the reaction in the Ruble is positive for now… as perhaps, taking a lesson from the U.S., the CBR removes Mark-to-Market accounting for various credit instruments.
The Central Bank of the Russian Federation (Bank of Russia)
On measures of the Bank of Russia to maintain the stability of the Russian financial sector
1. The Bank of Russia will introduce a temporary moratorium on the recognition of the negative revaluation of securities portfolios of credit institutions and non-credit financial institutions, which will reduce the sensitivity of market participants to market risk.
2. To limit the impact of the revaluation of foreign currency denominated assets and liabilities on prudential requirements of credit institutions, the Bank of Russia plans to provide credit institutions temporary right to use in the calculation of prudential requirements on transactions in foreign currency rate calculated in the previous quarter.
3. The Bank of Russia will improve the mechanism of credit institutions in foreign currency. Within the framework of a currency Repo planned additional auctions for various periods of time if necessary. As part of the mechanism for providing loans to credit institutions secured by non-marketable assets (according to the Regulation number 312-P), is scheduled to begin providing loans to banks in foreign currency, secured credit claims in foreign currency to non-financial organizations.
4. The Bank of Russia considers the central counterparty on the Moscow Stock Exchange as an important institution for centralized distribution of liquidity among all financial market participants – both credit and non-credit financial institutions. To ensure the sustainability of the stock market for the Bank of Russia, if necessary, will provide support to the central counterparty on the Moscow Stock Exchange, market participants have confidence in the reliability of centralized clearing and continuity of its functions.
