Connect with us

World

Russia’s Banking Sector Still at Risk Despite Bailouts, World Bank Warns

Published

on

The banking sector in Russia is stabilizing but remains at risk despite recent state bailouts of Russian banks totaling tens of billions of dollars, the World Bank has said, according to Reuters.

The Washington-based financial institution estimated in a scheduled report dated June 10  that state-owned banks now account for 62 percent of all assets at Russian banks following the closure of hundreds of lenders in recent years and the rescue of several major financial institutions.

“The banking sector remains afflicted with high concentration and state dominance,” the World Bank said in the report.

The warning comes less than a week after the World Bank, the lending arm of the International Monetary Fund (IMF), cut Russia’s 2019 economic growth forecast to 1.2 percent from a previous estimate of 1.5 percent because of oil production cuts.

While the bank said Russia’s macroeconomic and fiscal buffers were strong, economic growth prospects remained modest.

“Downside risks to Russia’s growth outlook stem from the potential expansion of sanctions, deterioration of financial market sentiment, souring global trade environment and a dramatic drop in oil prices,” the report said.

Russia’s business climate faces stiff headwinds for many reasons, including the economic sanctions imposed by the United States, Japan, and European allies for Moscow’s 2014 seizure of Crimea, along with alleged Russian interference in U.S. elections.

The World Bank projected annual economic growth for the years 2020 and 2021 at 1.8 percent.

“On the upside, national projects aimed at strengthening human capital and increasing productivity, if well-implemented, could positively affect Russia’s potential growth in the medium-term,” the bank said in its report.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

World

Court in Gibraltar Extends Iranian Tanker’s Detention for 30 Days

Published

on

A court in Gibraltar has extended the detention of an Iranian oil tanker for 30 days, AFP reported, citing Gibraltar’s attorney general. According to the agency, the order authorising the detention of the tanker can be extended for up to 90 days.

“We look forward to continuing to work constructively and positively with officials of the Islamic Republic of Iran to facilitate the release of the Grace 1 pursuant to the satisfaction of all legal requirements,” Gibraltar’s Chief Minister Fabian Picardo told the territory’s parliament, as quoted by AFP.

On 4 July, the supertanker Grace 1 was detained off the coast of the British Mediterranean territory of Gibraltar on suspicions of it carrying oil to Syria for refinement.

Iran’s Foreign Minister Mohammad Javad Zarif and UK Foreign Secretary Jeremy Hunt discussed the issue earlier this week, with Mr Zarif urging London to release the tanker. He also stressed that Tehran would continue its oil exports under any circumstances. Mr Hunt, for his part, said that the Grace 1 would be released once Iran gives guarantees about its destination.

The tanker’s four crew members were freed on bail earlier this month after being questioned.

The situation in the Gulf has remained tense since the US tightened the sanctions it reimposed on the Iranian oil sector after quitting the 2015 nuclear deal.

A series of incidents, including attacks on oil tankers, took place in the Gulf of Oman in May and June. Washington has blamed the attacks on Tehran, but the latter has denied all the accusations.

Continue Reading

World

Russia in Confidential Consultations with the Netherlands on MH17 Crash

Published

on

Russia is having confidential consultations with the Netherlands on MH17 flight that was downed over Donbass in July 2014, Russian Deputy Foreign Minister Alexander Grushko said on Friday.

“Such consultations are underway, but we agreed that the process will have a confidential character,” the diplomat said.

Continue Reading

World

Links Between Russia and EU’s Right-Wing Parties Cause for Concern, Says Merkel

Published

on

Relations between Moscow and EU’s right-wing political parties are a cause for concern, German Chancellor Angela Merkel said on Friday during a press conference in Berlin.

“Some questions arise here,” she stated. “We have constantly monitored the very strong support that right-leaning parties have received from Russia in one way or the other.” “This is a cause for concern,” Merkel stressed.

The German chancellor also mentioned the scandal regarding the alleged financing of Italy’s Lega party by Russia, noting that the Italian side must investigate the allegations in detail.

Milan’s prosecution launched a case based on the publications on the US BuzzFeed website and in the Italian L’Espresso weekly news magazine shedding light on the alleged financing Lega was receiving from Russia, qualifying the case as international corruption.

The main suspect in the case is one of the associates of Italy’s Deputy PM Matteo Salvini, head of th-e Lombardy-Russia Association Gianluca Savoini. According to the prosecution, his voice can be heard on the BuzzFeed published audio recording of an alleged conversation with Russian entrepreneurs with ties to the Kremlin, during which a possible oil supply contract was discussed. The party could have received the deal dividends amounting to $65 mln.

Both Salvini and Savoini have denied the allegations.

Continue Reading

Files