The Central Bank intends to set up a fund for consolidation of the capital of banks undergoing financial rehabilitation by the Bank of Russia, after which they will be sold on the market, according to Central Bank Governor Elvira Nabiullina, speaking at the International Financial Congress. The Fund will be managed by a special management company.
“Operational management of banks undergoing financial rehabilitations will be handled by a specially established management company. Restoration of solvency will be supervised by the Central Bank. Bail-in will not be put off but take place straight away,” Ms. Nabiullina said, noting that the banks requiring rehabilitations would be reorganized and merged.
The financial rehabilitations will be an easier and cheaper process. To avoid conflict of interest between the Central Bank and the management company, a Chinese Wall will be raised, the regulator’s Governor added.
According to her, a draft law on setting up such a fund will be submitted to the State Duma during the autumn session.