The Agency on Deposit Insurance will be able to invest in foreign securities

15.02.2012 Yesterday, 14 February 2012, at the meeting of the State Duma of the Russian Federation committee on financial market a report on the draft of the Federal Law № 476130-5 "On Amending Article 14 of the Federal Law "On insurance of physical persons deposits in the banks of the Russian Federation" (in the part of the possibility to open a bank account by the Agency on Deposit Insurance) was submitted. The draft was introduced by the Government of the Russian Federation, it went through the stage of first reading. The speaker was the chairman of the Committee Burykina Natalia Victorovna.

Through this draft the Agency on Deposit Insurance (ADI) will be able to invest the deposit insurance funds in securities of foreign issuers, as well as in eurobonds issued by the Russian Federation.

Let’s recall that the draft has for a long period been discussed by the Agency on Deposit Insurance in cooperation with the Ministry of Finance. According to the document ADI will open accounts in Russian banks, as well as in the relevant foreign credit institutions.

Today ADI can invest in Russian securities as well as in the corresponding objects of the civil rights of foreign countries - members of the OECD. However, the Agency has no access for the implementation of these operations if the securities are nominated in foreign currency.

Expert’s opinion

“Russia took another step toward integration into the global financial system. This decision (if it is accepted) should be viewed from two perspectives: the populist-political one and economic one. In terms of populist one – there will be the chorus of advocates of the Russian land, and fighters with offshore companies, anti-globalists: “Again the authorities transfer our money abroad!” This squeal will be actively exaggerated and will have reproaches for the current authorities.

The authorities will frown and come up with all sorts of the lumpen electorate satisfying justification - hiding the true motives of such a solution - economic. Namely as a result of uncontrolled emission of the ruble and the inclusion of the printing press for finance budgetary expenditures - there is an urgent need to "drain" excess liquidity and money supply. But this is understandable only to economists. It’s impossible say to the lumpen that we have started a printing press and inflation has eaten all the increase in pensions and salaries. So the Ministry of Finance has once again made a trick as in the case of placement of the stabilization fund at the USA Bank – transferred the problem of excess money supply to foreign countries.

Let's see who gets this "gift" - the EU or the USA”.

On the basis: www.komitet2-12.km.duma.gov.ru

Lomakin Yaroslav ( managing partner of Honest&Bright)