The Central Bank does not consider the purchase of blocked assets from financial organizations

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AK&M 04 August 2022 14:01

The Bank of Russia is not considering the option of repurchasing blocked assets from financial organizations, according to the report of the regulator "Financial Market: new challenges in modern conditions."

Such actions, according to the Central Bank, are fraught with large-scale monetary emission, destructive inflationary consequences for both the economy and the financial sector.

With this approach, it would require the purchase of assets from all holders, not just from financial institutions, which would make the consequences even more devastating, the regulator emphasizes.

At the same time, the Bank of Russia is considering various approaches to dealing with the blocked assets of Russian residents and obligations to residents of unfriendly countries.

Among such approaches is a special accounting of these assets and liabilities on the balance sheet of financial organizations themselves, as well as the allocation of these assets and liabilities into separate special companies.

If necessary, interested financial organizations will be able to unite such companies into special funds in order to jointly defend their interests and expand opportunities for counter-exchange of claims with counterparties from unfriendly countries.

The regulator emphasizes that now the relevant legal framework already exists for banks. The Bank of Russia is ready to consider the possibility of using these mechanisms for other financial organizations if they are in demand.

The Central Bank is considering the possibility of using the funds accumulated in type "C" accounts and other special accounts as part of the overall work on unblocking the assets of Russian residents.

In addition, the Bank of Russia is ready to provide financial institutions with the opportunity to form reserves for blocked assets for a longer time than other easing measures may apply.