Publication: Monitor Volume: 1 Issue: 87

On August 31, Boris Yeltsin received in the Kremlin banking leaders worried about the liquidity crisis, and told them that the state wants to see strong Russian banks which are capable of competing with their Western counterparts. Yeltsin promised that the government would help the banks overcome the interbank credit crisis, but would ask them in return to participate more actively in financing the Russian economy and the privatization process. He agreed with the bankers that the state could easily put a stop to the crisis by lowering the mandatory reserve requirement ceiling, and pledged to ask the government to do so. Meanwhile the Industrialists’ and Entrepreneurs’ Union spokesman Vladimir Aleksashchenko told Russia’s Radio that 160 Moscow banks were near bankruptcy as a result of the liquidity mess, and predicted that the crisis would deepen.

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