Primakov said that Western banks should be allowed greater participation in the Russian market to help revive the Russian economy. Likewise, Gerashchenko said foreign financing is crucial to saving the banking system. He noted that the World Bank had already drawn up a program similar to the Central Bank’s, and mentioned the European Bank of Reconstruction and Development as another possible participant in the restructuring. Both Gerashchenko and Vladimir Potanin, head of the Interros financial-industrial group, who attended the meeting, said that participants discussed the possibility that banks could use equity in their companies to pay off their debts to Western partners.
While the comments concerning the participation of Western banks sounds revolutionary, both Primakov and Gerashchenko reassured the assembled banker-industrialists that Russia’s banking system would remain “national.” Gerashchenko said there were no plans to change the current law preventing a foreign bank from having more than a 12 percent stake in a Russian bank. Foreign banks are also prohibited from providing retail banking services. He also noted that foreign banks are not rushing to get into the Russian market, given the financial crisis (Vremya, October 14).
While there has been speculation that the Primakov government would move to limit the power of Russia’s banking oligarchy, a more likely outcome is that the number of privileged banks will be reduced, while the state will increase its control over their activities–even gain stakes in their ownership. This will by no means be unwelcome to some of the oligarchs. For example, Mikhail Khodorkovsky, founder of Bank Menatep and head of the Yukos-Rosprom financial-industrial group, has long called for an “industrial policy” worked out via a partnership between the industrialists and the bankers.
Khodorkovsky, also at Tuesday’s meeting, has been in the forefront of a campaign to stop the government from raising taxes on oil exports and to oust its main proponent–Finance Minister Mikhail Zadornov. He has also attacked the “monetarist” policies of previous governments and backs increased money emissions. A government spokesman said Tuesday that during the meeting with the industrialists, the government agreed that representatives of the banking sector will meet regularly with the government to develop the state’s credit-monetary policy.
For his part, Potanin said Tuesday that the industrialists are preparing a joint approach to industrial policy, which it will suggest to the government as early as next week.
PROSECUTOR GENERAL SAYS ONE OF THE BANKERS MAY BE IN TROUBLE.