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The discussion also covered measures to stabilise the financial sector and to support small and medium-sized businesses.

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President of Russia Vladimir Putin: Good afternoon, colleagues,

I asked you to gather here to discuss the situation in banking and relations with the real sector of the economy. We know that for a number of reasons, including objective ones, the Bank of Russia was forced to raise the key interest rate. This, naturally, had its effect on commercial banks, which created certain difficulties for a number of branches of the economy – the processing industry, agriculture and construction – in obtaining loans at acceptable rates. I believe there is no need for me to repeat obvious things; we all know what is going on.

At the same time, both the Bank of Russia and the Government have recently launched a number of measures to steer the situation in the right direction, to stabilise it. As you may know, it was decided to provide 1 trillion rubles to fund the additional capitalisation of a number of system-making banks, including VEB [Vnesheconomsank]. This will be funded from the National Welfare Fund; we spoke about this only yesterday. We also plan to increase the volume of government guarantees on loans taken out by enterprises to implement investment projects. This, by the way, also includes restructuring their current debt.

We need to create a mechanism to subsidise interest on loans to organisations so they can replenish their working assets and finance their current debt.

Besides, the Bank of Russia has developed a number of instruments to support small and medium-sized businesses, primarily those not involved in raw materials exports and those using project financing.

I am certain that together these measures will make loans to the real sector of the economy more accessible. At the same time we all know – and you know this better than anyone else – that the financial sector is experiencing certain difficulties, despite the support from the Bank of Russia and the Government. Due to the limited access to external markets – or rather no access at all – they are having certain problems.

I asked you to get together today to consider these very issues: what is being done and whether it is enough to support the financial sector, and what we will do together to support the real sector of the economy.

Let us begin.

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