| Headline: Banks on a tight leash Source: Euromoney Date: October 2001
Because of the country’s long period of high – sometimes hyper – inflation, deposits and assets are among the lowest in the region. At $2.4 billion, combined assets are equivalent to those of the tenth-largest Russian bank. And although there are currently 24 operating commercial banks, the lion’s share of assets are held by a half-dozen specialized, “system-forming” institutions, all tightly controlled by the state. The banks have been routinely directed by the state to provide credits at unprofitable rates – sometimes at 100 percentage points below the effective refinancing rate. Many of these have gone to agricultural firms and other troubled borrowers, often with implicit but unenforceable state guarantees. The periodic recapitalizations of some of the largest banks have been relatively low key, if expensive, affairs. | |||||||||||||||||||||||||||||||||||||||||