Originally posted by emodin
IIRC, the bank crisis manly revolved around the average citizen wanting to take their money out of the banks due to the colapse (financially) of several banks. Since banks only hold a small percentage of cash on hand in relation to the amount of money their customer has in their "savings" or "checking" accounts, a "run" on the bank (where everyone shows up and tries to withdraw all of their money from the bank) results in the bank giving away all of its cash reserve on hand, and yet it would still be unable to give the rest of their customers their cash after that reserve is eliminated.
This is exactly what we have now. The problem is that this process is provocated by government and our "free press". One of the reasons is to seize the banks that are unable to pay cash to customers. GUTA-bank is already bought by Vneshtorgbank, a relic from Soviet times, a bank that was used for all Soviet foreign trade. We see some structures trying to get control of banking business -> going back to Soviet system of state (or some olygarch group) monopoly.
Alfa bank declared that cashing "timed" accounts will be charged by 10% additional fee. I wonder if they will get sued for violating the contract with clients.
Originally posted by emodin
The main fix proposed and accepted by congress was the Federal Deposit Insurance Corporation (FDIC). The FDIC is basically a voluntary agreement between the bank and the government whereby the money deposited into an account would be charged a certain fraction of a percent (on interest IIRC), which would go to the government, who would hold it to pay the depositer in case their money was rendered unavailable (due to theft, bank failure, ect.)
This is what our government talks about now. So far the only bank where deposits are insured by State is Sberbank - another relic from Soviet (or even Imperial) times. It's controlled by the state, has the smallest percent for deposits and holds up to maybe 80% of all people's savings.
The idea of deposit insurance is good only on paper in Russia. It's obvious that they will use this insurance to get control of private banks or push them out of the market. When I hear the word "insurance" I wand to take my gun out. Obligatory insurance is only another word for robbery of the people by some financial groups. Look at our obligatory automobile insurance: we have highest payments and lowest compensation in Europe (including other ex-USSR countries).
Originally posted by emodin
One of the biggest problems that I see in the Russian banking sector (as a foreigner) is that when the last bank/rouble crisis errupted, and the IMF (or maybe the World Bank-can't remember which anymore) bailed the banks out, the money didn't go to pay back depositers across the board, it went to the well connected, and wealthy, with only a pittiance going to the people who actually needed the money most.
I'd be curious to see if they get another bailout, and what will happen to the money this time.
Good luck, and I hope everything turns out okay.
Well, this is probably why Western media focuses on Yukos case, and skips the current situation that can lead to unpredictable things. I try to stay away from banks and advise all my friends to do so. The only option is to have an account in some foreign bank, but you need to be really Rich
In 1998 the most horrible thing was that all payments between banks were stopped, and, as you can guess, it lead to the collapse of many businesses all over the country. For example: our clients send us money, the bank accepts payment and then keeps the money because some stupid governor banned all money transfers outside his small steppe republic on Volga...
Current situation looks like the goal is to destroy privateley owned small/medium enterprises. This will mean the return to controlled monopolies. And it will mean the return to Soviet economical model, but this time without Soviet social programms and benefits. And that will mean the feudal society in it's worst.
