Russia needs to do more to ensure its banks are sound, the IMF said, signaling the country’s efforts last year to stress test its financial industry weren’t sufficient to renew confidence and credit flows. “What we have recommended is for the central bank to make a comprehensive assessment of the status of the banking system,” Odd Per Brekk, the IMF’s Russia representative, said in an interview. “What’s important here is to lay the basis for the banking system to restart credit expansion, because that has not really happened yet.” Russia stress-tested all its banks last year and a number of the 100 biggest lenders fell short of capital adequacy requirements, Bank Rossii First Deputy Chairman Gennady Melikyan said in October, adding that capital shortages may start to appear by April. The test results weren’t made public beyond policy maker comments. Fitch Ratings on Jan. 22 raised its outlook on Russia’s BBB grade, in part because bank risk had receded, though the service warned of “uncertainty” over banks’ ability to provide adequate credit. (Bloomberg)
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