Director of the Russian Central Bank prudential supervision department Alexey Simanovsky
Photo: Valery Melnikov
| Other Photos |
 |
|
 |
Credit Requirements Tightened
The Central Bank of Russia intends to set stricter requirements for rating credit. It holds that banks are demanding too little collateral relative to the credit risks. Experts acknowledge that collateral is overvalued by 30-450 percent, and its collection in the event of nonpayment is extremely difficult. The Central Bank’s efforts may slow crediting growth and reduce the number of participants on the market, however.
Alexey Simanovsky, director of the Central Bank department banking regulation and supervision, announced the coming changes yesterday. He observed that cosigners also often evade their obligations when a loan is defaulted on, and “a good guarantee doesn’t make a bad loan good.”
Assessors are no longer licensed, and the profession has no institution of self-regulation, so it is easy to place any value desired on collateral. Banks also use affiliated companies to make assessments. The problem is most severe in corporate crediting. Mortgages and auto loans are the most effected in the retail sector.
Analysts say, however, that the changes proposed by the Central Bank make crediting a subjective process and are a reaction to a situation broader than just problems with the assessment of collateral.
www.kommersant.com
All the Article in Russian as of Sep. 03, 2008
|
|
|
