New challenges for financial market in modern conditions: regulator’s approaches
The Bank of Russia has published a document inviting market participants and the expert community to discuss key directions of the financial market’s development amid sanction restrictions. This material consists of 14 sections and describes the tasks, which the regulator will have to complete jointly with the Russian Government and market participants.
A restoration of the resilience of financial institutions and their involvement in the modernisation of the economy are among the priorities for the near future. The Bank of Russia is ready to assess the possibility of introducing risk-based regulatory incentives for banks’ participation in transformation projects as their capital recovers. It is required to develop criteria for such projects. The importance of development institutions and state guarantees will increase significantly. The document also highlights the importance of expanding debt and equity instruments to finance economic development.
The blocking of Russian assets by unfriendly states, as well as operational restrictions on payments in the world’s main reserve currencies, pose risks for individuals and businesses when using the US dollar and the euro.
The Bank of Russia will help speed up the natural process of reducing the share of foreign currencies and introduce additional measures aimed at minimising banking operations in such currencies. Concurrently, the regulator intends to solve problems with blocked assets.
Particular attention is paid to the disclosure of information by market participants. It is proposed that organisations should resume the publication of financial statements. The Bank of Russia will also create conditions for the development of national financial and commodity indicators, which can be used for concluding transactions and for market analyses.
The regulator puts more focus on the protection of financial consumers’ rights and the limitation of risks for retail investors. This will be supported by the development and improvement of transparent investment products and long-term savings instruments.
‘Now, we need to develop systemic solutions to help market participants adapt to the new reality, maintain people’s confidence in the financial system, and create investment resources to finance companies and projects, which allow us to diversify the Russian economy and improve the quality of life,’ said Vladimir Chistyukhin, First Deputy Governor of the Bank of Russia. ‘When preparing the document, we took into account the factors that will impact the market over the medium- and long-term horizons.’
Comments and proposals will be collected until 1 September 2022. The results of the discussion will be taken into consideration when preparing the Russian Financial Market Development Programme for