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. Last Updated: 07/27/2016

Kudrin Says VEB Switch Not Costly

Turning Vneshekonombank into a joint-stock company is possible, but any change in status won’t require 1 trillion rubles ($34.6 billion) as claimed, Finance Minister Alexei Kudrin said Thursday.

“We haven’t appropriated this money in the budget for next year. I think that such a large sum will not be needed,” Kudrin said at a news conference, Interfax reported.

VEB head Vladimir Dmitriyev said Saturday that the bank was ready to change its status as ordered by President Dmitry Medvedev but that it needed to raise about 1 trillion rubles in order to make its activity compatible with banking legislation. Kudrin said the Finance Ministry had not received Dmitriyev’s assessments.

Central Bank First Deputy Chairman Alexei Ulyukayev said Thursday that the government was considering different options for VEB, the most probable being to turn it into either a financial agency or a joint-stock company.

“Transforming VEB into a commercial bank is only one of the options,” Ulyukayev said, adding that the government would make a final decision on the bank’s new status.

Medvedev’s economic aide Arkady Dvorkovich said earlier this month that Vneshekonombank and two other state corporations, Russian Technologies and Rusnano, would likely lose their status as state corporations as early as 2010.

“As far as state corporations are concerned, I think they have no prospects in the current environment,” Medvedev said in his state-of-the-nation address.

“Those that work on commercial, competitive terms should become modern, open joint-stock companies controlled by the state. In the future, they shouldn’t be held in the public sector and should be opened to private investors.”

As a state corporation, VEB is subject to neither the capital requirements that banks are obliged to keep nor the financial reporting standards that joint-stock companies are bound by.