The Russian Central Bank considers the repetition of the financial crisis of December 2014 unrealistic, according to the Central Bank report on financial stability published Tuesday.
“In the current environment the repetition of the situation similar to December 2014 is unrealistic,” the report said, noting that even in the case of extremely negative scenario, including a sharp drop in oil prices, capital outflows from emerging markets due to rising interest rates in the developed markets, the Russian Central Bank “has a wide arsenal of tools to ensure stability in the financial sector.”
At the same time the Central Bank notes that it continues to work on expanding the collateral base – assets that banks can offer to the regulator as collateral for obtaining a loan. “Mortgages, that can be refinanced through the issuance of mortgage bonds have a notable potential,” the Central Bank says.
In mid-December of last year, the Central Bank took the unprecedented decision to raise the key interest rate to 17% on the background of sharply increased risks of inflation and devaluation. This solution helped to stabilize the situation in the financial market, but lending in the country sharply decreased.