The Russian government is poised to amend 2 banking laws which will authorize the Central Bank to limit banker’s salaries and supervise both domestic and international branches.
The State Duma Committee on Financial Markets will meet on
Friday, and is expected to approve the bill, as they already have
support from both government and bank deputies.
If approved by deputies, the Central Bank will increase control
over banks, their owners, executives, and executive bonuses.
Starting in 2014 banks will be required to prepare a consolidated
report in accordance with International Financial Reporting
Standards
The Central Bank will be able to influence banking systems,
including bonuses, said Mikhail Sukhov, the Bank’s Deputy Chairman.
If it sees fit the bank can set individual standards for banking
groups.
“Specific restrictions and sanctions will be outlined later
in a separate piece of legislation,” said Sukhov.
Starting on July 1, all banks will be required to submit their
payroll documents to the Central Bank.
“In general, we support the amendments. It is important for
the Central Bank to understand the concentration risks in banks and
to regulate controls abroad,” Anatoly Aksakov, the deputy
president of the Association of Regional Banks, said in support of
the amendments.
The Central Bank will also be able to check on international
subsidiaries, within the parameters of local
jurisdiction.
“If there are any violations to ‘daughter’ companies, we have
no right to use these sanctions, but the [Russian] ‘parent’ company
will be able to impose fines and sanctions on the ‘daughter’
company in order to correct violations,” said Sukhov
Alexander Levkovsky, first deputy chairman of SMP Bank, agrees
that the new controls will mostly affect banking groups with
foreign subsidiary branches.
For low-quality risk management or corporate governance the
Central Bank will be able to set individual standards for
banks.
This article originally appeared on : RT