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. Last Updated: 07/27/2016

Business Press Review

Moscow's Problem Banks

The Central Bank's Chief Directorate has categorized about 35 percent of the capital's banks as problematic. Of those [266 problematic banks], according to Central Bank chief directorate head Konstantin Shor, 153 are in very bad condition. And as Shor's deputy Alexander Alexeyev points out, "three-quarters of those are irretrievable."

Before the end of the year, the Central Bank's Chief Directorate intends to conduct inventories of the "superproblematic" banks, and to request that the Bank of Russia's head office revoke their licenses in a number of cases. ...

However, judging from the assurances of employees at the Moscow Central Bank chief directorate, if the majority of banks now in critical condition were to crash, things would not be [that] painful ... According to Alexeyev, their share of the Moscow financial services market is "microscopic."

Segodnya, Sept. 9.

City Has Eye on Advertising

Moscow Mayor Yury Luzhkov has signed a decree "On Measures for Improving Outdoor Advertisement Processing in Moscow."

New rates for the use of advertising space will be developed and approved by Nov. 15, 1997. In addition, city authorities are planning to introduce changes in current regulations for dispersing proceeds from outdoor advertising.

The new rules for outdoor advertising are supposed to be approved by Dec. 1, 1997.

Advertising that does not conform to the new requirements will be allowed to be torn down.

In the near future, the capital's telecommunications and mass media committee will compile a single list of advertising spaces within the city. The government-owned company City Advertising and Information will be responsible for the list.

In addition to this, the capital's government has introduced a unique form of censorship on outdoor advertising with its directive to form a city outdoor advertising council. [The council's] functions will include reviewing disputes over the dispersal of outdoor advertising proceeds and formulating a single [advertising] policy for the capital's streets and squares. Muscovites will be able to register complaints they have about billboards or ads hung from the sides of buildings.

Moskovsky Komsomolets, Sept. 9.

No Land Sales, No Boom

Investment loser Moscow could join the ranks of politically and economically powerful international cities such as London, Paris and Madrid; rich in their cultural heritage and scientific potential. But in the eyes of foreigners, Moscow is not an attractive place for investing.

Throughout the world, construction in urban centers is considered a lucrative investment. Here, putting one's money into that sphere is unreliable because after building or restoring a mansion, investors have ownership rights only to the building, and not the land. According to the law "On Paying for Land Usage," land in Moscow cannot be sold. The very best one can hope for is a 49-year lease. Such prospects tend to scare off foreign investors.

And so even with all of the theoretical profit associated with urban construction, in Moscow [foreigners] are building or finishing buildings only for their own representative offices and hardly putting any money into residential, industrial or retail complexes. ...

Moscow will not become a Paris or Madrid in the near future.

Segodnya, Sept. 9.

The KGB's Gold Trail

The following appeared under the headline "I Know Where the KGB Hid the Party's Money."

Kazakhstan's Prime Minister Akezhan Kazhegeldin has shared a few facts from his past with Almaty residents, acknowledging in particular his long tenure under the Soviet KGB's "krysha." Fulfilling special tasks for the powerful monster, Kazhegeldin was involved in the affairs of "early capitalism." This involved the formation of secret commercial structures that worked with party and state money.

According to the prime minister, the KGB's merchants were communists like himself, but carefully hid their party membership so that they would not tarnish party or KGB honor if some unpleasantry were to take place. Because of this, they were only listed as numbers on secret party roles.

Kazhegeldin was directly involved in some of the most sensational operations of those years. Foremost was the AN-T affair, in which tanks and other military technology were sold abroad. ... Kazhegeldin's role was to ensure that shipments successfully made it to their [various] ports. ...

Kazhegeldin views the democrats' search for party money with irony: According to him, the party did not employ primitive methods [in hiding communist money]. In particular, it periodically made money from gold speculation.

Komsomolskaya Pravda, Sept. 10.