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. Last Updated: 07/27/2016

EDITORIAL: New Names But Same Old Bankers




Uneximbank gets into financial trouble. Uneximbank gets massive state bailouts, but to no avail. Uneximbank defaults on its Eurobonds. Uneximbank's assets are moved to a new structure called Rosbank; its debts are left to the state and those foolish enough to loan it money.


SBS-Agro gets into financial trouble. SBS-Agro gets massive state bailouts. It hands many of its obligations over to the state, and declares its new name - Soyuz.


So now we have Rosbank and Soyuz - two shiny new major banks without a care in the world. This is the sort of development that should give pause to those who say the so-called oligarchy has been broken. Individual oligarchs may rise and fall. Yet success in big business continues to be based not on cold hard economics - that's for the masses, not the elite - but on political pull.


In any other country, a collapsed bank would be locked down by government regulators. Assets and obligations would be tallied up. Either the bank would be liquidated, and creditors would be paid whatever was possible; or regulators would broker a deal between creditors and the bank on eventual repayment, and the bank would be lifted back to its feet to start earning.


Not here. A collapsed bank is a problem for everybody but the banker. The banker stiffs depositors - handing them their choice of either office furniture or a cut-rate deal with state-owned Sberbank - and moves on. In his wake he leaves wrecked lives, but so it goes.


How long will it be before we see Rosbank or Soyuz handling federal budget moneys again? Yes, the government has announced its intention to halt the lucrative practice of channeling the national budget through commercial banks - but it has announced this before.


In 1997 the government ordered then Deputy Prime Minister Vladimir Potanin - conveniently the Uneximbank founder - to clean up the messy authorized banking practice. Potanin simply drew up a shorter list of authorized banks, one that included Uneximbank. Energetic reform indeed.


Government officials have long gone unchallenged with the absurd argument that it's not that easy to stop using authorized banks, because moving money aro und takes vague but very important know-how and technology. It's the same nonexplanation put forward in defending the need to park billions in reserves in an obscure offshore company: In the early 1990s, Russians were ignorant savages who couldn't manage their money.


This begs the question of how a Russian bank or a Jersey island shell company less than a few years old could so easily grasp this much-vaunted technology when the Central Bank couldn't.