Cheap Accommodation Central Moscow

Kazakhstan hands over SCO presidency to China

China assumes the rotating presidency of the Shanghai Cooperation Organization (SCO) from Kazakhstan on Friday in what Beijing claims will be the SCO’s “golden stage”.

Chinese experts praise SCO countries’ readiness to arrive at a political accommodation on a wide array of pressing issues. Speaking at a recent SCO summit in Astana, Kazakh President Nursultan Nazarbayev touted his country’s rotating presidency in the SCO, which saw the adoption of a long-term anti-narcotics strategy along with other important documents. Some problems still persist, though, according to Moscow-based economics expert Sergei Luzyanin, who specifically cited the absence of a special SCO bank akin to that of the EU. 

"Kazakhstan’s rotating presidency saw the SCO’s ever-increasing economic clout, Luzyanin says, praising China’s role and singling out the implementation of a string of bilateral and trilateral economic projects in Central Asia. In this regard, developing collective economic collaboration is yet to be tackled, Luzyanin concedes. As for security issues, they remain bright on the SCO’s radar, he goes on to say, touting the SCO anti-terror center’s interaction with the Collective Security Treaty Organization and other international bodies. Such a partnership is of paramount importance given that the Afghan drug-trafficking shows no sign of abating, Luzyanin concludes."

Over the past couple of years, an array of countries has signaled their readiness to join the SCO, including India, Pakistan, Iran, Afghanistan, and Mongolia. Experts, however, remained downbeat on these countries’ accession to the SCO in the immediate future, specifically citing the necessity of joining almost 160 SCO agreements. They are echoed by U Dahwei, head of the Chinese Association of Russia, Eastern Europe and Central Asia, who points, as an example, to the EU, which has been repeatedly wary of accepting new members. In Moscow, CIS expert Alexander Karavayev warns of possible differences between SCO rookies, which he hopes will be able to reach a consensus on a string of issues pertaining to Afghanistan.

"A possible accession of India, Pakistan and Iran to the SCO is fraught with political conflicts within the organization, Karavayev says, citing Afghanistan, which he claims would be the right option. Its entering the SCO could help boost our cooperation with the United States – something that would in turn add significantly to regional security, Karavayev wraps up.

CBR steps in to help VTB's Bank of Moscow morass — RT

The Central Bank of Russia has announced that the Russian Deposit Insurance Agency (DIA) will lend Bank of Moscow 295 billion roubles, or about $10.6 billion, at the discounted rate of 0.51% over 10 years.This will come on top of a 100 billion rouble commitment from VTB to recapitalize the Bank of Moscow. The central bank said the loan component of the bailout would be repaid as problem loans are recovered.

RussianDeputyPrime Minister and Finance Minister Alexei Kudrin, said the bailout will require VTB to increase its stake in the Bank of Moscow to at least 75%.

"The CentralBank andDeposit Insurance Agency have prepared a plan, which I have agreed on, that puts the main burden ofcollecting loans [Bank of Moscow's toxic loans] on VTB. VTB needs to consolidate a packet worth up to 75% and boost Bank of Moscow's capitalization by100 billion rubles."

Kudrin added that VTB would increase its stake "In various ways, such as boosting capitalization and through buying out share from shareholders."The developments come in the wake of VTB’s payment of $3.5 billion for a 46.5% stake owned by the Moscow City government, as well as a minority blocking stake in an insurer that owns a 17% of BoM.

After VTB had secured control of the bank, and ousted much of the former management early in 2011, it was discovered that as much as a third of Bank of Moscow's $30 billion loan book consisted of related-party loans to real estate projects involving former CEO Andrey Borodin, who has departed for London claiming that the loans are backed by sufficient collateral.

Egor Fedorov, Senior Credit Analyst at ING Wholesale Banking and Financial Markets, says the development reflects severely on the oversight of the banking system by the Central Bank of Russia

“This is already the second major banking issue in Russia this year, after the Eurobond default of International Industrial Bank (Mezhprombank), which says that banking regulation and controls are very poor in Russia.”

Senior Director of Fitchratings Financial Institutions team in Moscow, Alexander Danilov, agreed that “In terms of banking regulations in Russia there’s certainly room for improvement,” but noted that oversight of the Bank of Moscow, in particular, had failed.