Vneshekonombank (Foreign Trade and Investment Bank) chairman Vladimir Dmitriev
Photo: Vasily Shaposhnikov
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Vneshekonombank May Shut Down
The state corporation Vneshekonombank may stop functioning unless the government allocates it 350 billion rubles, Vedomosti newspaper writes. According to that newspaper, bank chairman Vladimir Dmitriev has written a second letter to Russian Prime Minster and chairman of the bank’s supervisory board Vladimir Putin asking for an increase in the bank’s authorized capital. The first time, Dmitriev asked for 950 billion rubles, but the Finance Ministry stated that the sum was impossible.
According to Vneshekonombank, its authorized capital on November 20 was 262.5 billion rubles. “At that level of funds, Vneshekonombank is forced to cease its activities until capital corresponding to the scale of its activities is attracted,” Dmitriev wrote in the letter to Putin. The bank is also asking for a state guarantee on all of its operations. They total about 1.85 trillion rubles, the allocation of which is not allowed for in the federal budget.
The Ministry of Economic Development has already stated that the bank’s supervisory board will not allow it to cease operations. Since the beginning of the economic crisis, the government has assigned the bank a number of functions to support the Russian economy. The government uses it to consider companies’ applications to refinance their debts to foreign banks. It has allocated $50 billion for that purpose. Vneshekonombank also invests on the open market to maintain demand for Russian assets and it is issuing Russian banks 450 billion rubles in subsidized credit.
The government reorganized Vneshekonombank in 2007 as the Bank of Development. It can operate on the Russian market without a license from the Central Bank and without observing its rules.
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