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Financial Stability Index on Russia launched

Coincides with the news from Friday that Russia has now officially been accepted as a member in the World Trade Organisation (WTO)


Russian financial group Otkritie and Gaidar Institute for Economic Policy (Gaidar), a non-profit research and education foundation has launched a Financial Stability Index (FSI) on Russia, which neatly coincides with news released Friday that  the World Trade Organisation has admitted  Russia as a member, after being one of the last largest world economies to remain outside the fold.


On Friday, after a WTO ministers meeting in Geneva, the group announced that it had finally granted Russia membership:




... on 16 December 2011, Russia cleared the final hurdle to become a WTO member.

WTO Ministers adopted Russia’s WTO terms of entry at the 8th Ministerial Conference in Geneva. Russia will have to ratify the deal within the next 220 days and would become a fully-fledged WTO member 30 days after it notifies the ratification to the WTO.



WTO Director-General Pascal Lamy also said:




“This is a historic moment for the Russian Federation and the rules-based multilateral trading system. After an 18-year marathon, the finish line has been crossed. This is a double win for Russia and the WTO. The package we have just adopted is the result of hard technical work, led by modernizing political leadership.”



The FSI couldn't have come at a better time because as the creators of the index pointed out:




The introduction of the FSI coincides with fears of a second financial crisis as August saw Russia’s stock market heavily sold off and the RTS index falling from over 2000 to 1200 in a matter of weeks.

Although the Russian financial sector remained relatively stable during recent eurozone turbulence, rising uncertainty in global economies are a source of concern for future trends in Russia and highlight the need for the index, designed to forewarn of potential volatility.



The details of the index includes the following and could "achieve more clarity of how Russia’s financial system is faring in the face of Europe’s sovereign debt crisis and prepare for possible market disruptions."




The introduction of the FSI coincides with fears of a second financial crisis as August saw Russia’s stock market heavily sold off and the RTS index falling from over 2000 to 1200 in a matter of weeks.

Although the Russian financial sector remained relatively stable during recent eurozone turbulence, rising uncertainty in global economies are a source of concern for future trends in Russia and highlight the need for the index, designed to forewarn of potential volatility. 

FSI is a composite index that includes:
 
- dynamics of monetary indicators (monetary aggregate M2, the money multiplier, core CPI, the amount of bank deposits with the RF CB and BBR with commercial banks)

- interest rates (the rates in the interbank market, mid- and long-term rates in the GKO-OFZ market)

- balance of payments indicators and foreign exchange markets (International reserves of the Central Bank of Russia, the ratio of monetary aggregate M2 to international reserves, real ruble exchange rate against the U.S. dollar)

- stock markets indicators (the RTS index, MICEX index of corporate bonds, government bonds index RGBI).


- Euromoney Skew Blog


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