On the losses of banks in case of continuation of the economic war of the West against Russia
At the end of 2014, the latest Basel Bank for International Settlements (BIS) data was published, which characterize the positions of foreign banks in Russia and Russian banks abroad, and also give an idea of the possible losses of the parties (banking systems) in case of further involvement of banks in the economic war of the West against Russia. Positions of foreign banks in Russia
As for the positions of foreign banks in Russia and their probable risks, the BIS gives this assessment. The obvious part of the risks is the obligations of Russian banks and companies from all sectors of the economy to foreign banks on loans received. This is the main risk, which is measured as total (100-percentage) non-payment of debts by Russian recipients of loans and borrowings. This major risk for banks of all countries was estimated at 207,6 billion. There are other risks (potential risks). All types of risks of foreign banks in Russia in the middle of 2014 have amounted to 363,3 billion dollars (tab. 1). At the same time, as of December 31 2013, the BIS estimated the main risk of foreign banks in Russia at 225 billion, i.e. in half a year it was reduced by 7,7%. This dynamic arose as a result of the fact that in March economic sanctions were imposed on Russia. Old loans and loans were paid off, and the provision of new loans and loans to Russian banks and companies began to decline. It almost completely stopped after the introduction of the third package of sanctions, according to which Russian organizations were cut off from the "long" and "medium" credits and loans.
Table. 1.
Cost indicators of risks of foreign banks in Russia (as of 1 July 2014, billion dollars)
Country
Volume of all risks
Major risks (on loans and borrowings)
Other risks
USA
109,6
26,1
85,3
France
59,1
47,8
11,3
United Kingdom
45,2
14,3
30,9
Italy
34,0
18,4
6,3
Germany
20,8
17,7
3,1
Japan
20,3
18,4
1,9
Netherlands
15,7
15,7
-
Sweden
9,1
9,1
-
Spain
1,4
1,2
0,2
Other countries
48,0
31,4
16,6
Total
363,2
207,6
155,6
The main part of all the risks of foreign banks in Russia falls on US banks - 30,0%. The shares of banks of other major countries are as follows (%): France - 16,2; Great Britain - 12,4; Italy - 9,4; Germany - 5,7. A total of nine countries indicated in the table account for 86,8% of all risks.
At the same time, the overwhelming part of all the risks of foreign banks in Russia falls on the risks of losses associated with non-repayment of loans provided to Russian banks. The share of these risks as a whole is 57,2%.
The remaining 42,8% falls into the category of “potential risks” (“contingent liabilities”). They include the potential losses of foreign banks arising from their liabilities for bank guarantees and derivative financial instruments. Experts believe that in relation to Russian risks, we are talking mainly about such tools as credit default swaps (CDS). Those foreign banks that provided loans and loans to Russia bought these swaps from other foreign banks in order to insure themselves against Russian defaults. It is noteworthy that the bulk of the potential risks are accounted for by US banks - 85,3 of 155,6 billion dollars, i.e. 55%. The potential risks of US banks are 3,3 times the risk of credit. In second place in terms of potential risks are UK banks. At British banks, the potential risks exceed the credit risks in 2,2 times. In general, US and UK banks account for of all potential risks of foreign banks in Russia. It was American and British banks that in the past decade actively sold such new financial instrument to banks (and not just banks) such as defaults insurance (CDS). Including from defaults in Russia. It can be assumed that those banks that are actively engaged in sales of Russian CDS are not interested in the occurrence of an “insured event” (in other words, the default of Russia). But for those banks that today are holders of Russian CDS, the occurrence of such an "insured event" would be very useful.
The risks of foreign banks and the stability of banking systems
Despite the rather impressive risk figures of foreign banks in Russia, their impact on the stability of the banking systems of other countries should not be overestimated. If we compare the value of these risks with the total assets of foreign banking systems, nowhere does this proportion go beyond 1% (Table 2).
Table. 2.
Ratio of risks of foreign banks in the Russian Federation and total assets of foreign banking systems (as of 1 July 2014)
Country
The value of the risks in Russia, billion.
The total assets of the country's banking system, trillion. Doll.
Ratio of risks to assets,%
USA
109,6
15,6
0,7
France
59,1
9,7
0,6
United Kingdom
45,2
11,0
0,4
Italy
34,0
5,0
0,7
Germany
20,8
9,3
0,5
Japan
20,3
7,7
0,4
Netherlands
15,7
2,8
0,6
Sweden
9,1
1,5
0,6
Spain
1,4
3,9
0,4
Table 2 presents data on all assets of the banking systems of foreign countries, both domestic and foreign. For the US banking system, foreign assets in the middle of 2014, by the Bank for International Settlements, were estimated at 6,22 trillion. dollars For the banks of the main European countries, they were equal (trillion dollars): Great Britain - 3,35; Germany - 1,85; France - 1,81; Italy - 1,02. Thus, if we correlate the risks of foreign banks in Russia with their foreign assets, we will get the following values (%): USA - 1,8; Great Britain - 1,3; Germany - 1,1; France - 3,3; Italy - 3,3. As you can see, the highest relative risks associated with Russia are fixed for the banking systems of France and Italy.
The deterioration of the economic situation in Russia can affect individual European banks, which are closely tied to the Russian banking sector and Russian companies in the non-financial sector. In particular, these are banks such as Italian UniCredit and French Societe Generale. Mention and banks of Austria. In particular, Raiffeisen Bank International, whose Russian loan portfolio is 10,8 billion euros. Unfortunately, since 2013, the Bank for International Settlements has stopped publishing data on the operations of Austrian banks in Russia.
Foreign assets of Russian banks: scope and geography
The BIS also provides information on the geographical distribution of foreign assets of Russian banks. The latest data is in the middle of the year 2014 (see table 3). The total value of foreign assets of Russian banks was estimated by the Bank for International Settlements at 235,5 billion dollars. These are foreign assets in a broad definition (total foreign claims). This is a very modest amount against the background of the giant foreign assets of US banks and leading countries in Western Europe. In terms of foreign assets, the banking system of the Russian Federation is comparable to the banking systems of such relatively small European countries as Norway (299,7 billion dollars), Austria (292,0 billion dollars), Finland (274,6 billion dollars).
Table. 3.
Foreign assets of Russian banks in distribution by individual countries (as of 1 July 2014)
Countries
Billion Doll.
Share,%
Total*
235,50
100
USA
23,75
10,1
Canada
0,61
0,3
Japan
19,21
8,2
Taiwan
1,49
0,6
European countries, total
174,80
74,2
France
50,61
21,5
Italy
29,04
12,3
Germany
21,55
9,2
Holland
16,89
7,2
United Kingdom
14,72
6,3
Sweden
10,54
4,5
Switzerland
6,40
2,7
Spain
2,68
1,1
Belgium
0,75
0,3
* The calculation of the total value of 25 countries.
The sum of 235,5 billion dollars can be considered as a cost estimate of the risks of Russian banks in the event of an escalation of the banking war between Russia and the West. After all, most of all international assets are located in countries that are controlled by Washington. It is impossible to exclude the possibility of arrest of foreign assets. According to the Bank of Russia, in the middle of 2014, the share of foreign assets of the country's banking system in the total volume of all banking assets (without the Central Bank) was about 17%. And most of them are in the countries listed in Table. 3.
The BIS in the composition of the foreign assets of Russian banks includes not only loans and borrowings, but also investments, funds on correspondent accounts, deposits, foreign currency in cash, etc. Foreign loans and loans of the Russian banking sector amounted, according to the BIS, 140,5 billion dollars. The narrow definition of international assets means only those assets that are formed through cross-border operations. Such foreign assets (total international claims, external assets) were estimated at 166,8 billion dollars. The remaining 69 billion dollars are assets placed in foreign currency within the Russian Federation (loans, deposits). As well as the ruble claims of Russian banks to non-residents.
The foreign assets of Russian banks in the narrow sense (international claims) are noticeably less than the aggregate requirements of foreign banks for Russian banks and companies, but these assets are located almost exclusively in those countries that have imposed economic sanctions against Russia. To prevent Western adoption of sanctions against foreign assets of Russian banks painfully affected the banking system of the Russian Federation, can the withdrawal of Russian banking assets from Western countries and their transfer to other jurisdictions - to countries of the Eurasian Economic Union and to the BRICS countries.
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