Central Bank Eases Auction Requirements

The Central Bank has eased requirements for banks allowed to take part in its collateral-free auctions to include those rated by Russian ratings agencies as well as by international ones.

The move is part of Moscow's efforts to boost liquidity in the banking system and ensure that it is passed on to smaller players in the face of the global credit crunch and widespread capital flight.

The Central Bank said it would disclose the list of eligible Russian ratings agencies once it has decided on the minimum ratings that banks must have received to be allowed to take part in the auctions.

It is more complicated for a Russian bank to secure a rating abroad than at home, and only about 120 of the country's more than 1,000 banks are rated by international agencies.

The Central Bank also said it was lowering the requirement for the rating of securities accepted as collateral in operations with the Central Bank.

Now papers rated at least B- by Standard & Poor's or Fitch, or B3 by Moody's, can be included in the Lombard list. Previously minimum requirements were B and B2, respectively.