The US takes the last money from the Russian economy


One of the largest American banks, Morgan Stanley, intends in the first half of next year to send the CBR a statement on the termination of banking activities in Russia.

As reported in the report on the activities of the Russian division for 2018, “the group plans to abandon banking, brokerage, and Depository licenses and voluntarily liquidate the relevant business units.” According to the clarification of “Izvestia”, Morgan Stanley will keep in Russia only consulting a business, which does not require licensing from the Central Bank.

We remind that Morgan Stanley opened its own representative office in Russia in 1994, and 11 years later Morgan Stanley Bank LLC received a license to carry out banking activities. Talk about the fact that the group is going to reduce its presence in Russia, which began in December last year with the filing of Bloomberg. It, with reference to its sources, reported that the Bank plans to close the departments of stock and currency trading, and the staff will be part reduced, and part — transferred to London. As already “JV” reported earlier, one of the main reasons for this decision was the global unprofitability of the banking sector of the country. According to the Director of the banking institutions of the Higher School of Economics Vasily Solodkov, Morgan Stanley is not the first and not the last in a number of Western banks leaving Russia. As for the Russian financial institutions, the expert stressed that they often voluntarily hand over their licenses, not seeing a future either in the short or medium term.

— Before 2008, the level of profitability of our banking system was about 20-30%, — added the chief analyst of the Bank “Solidarity” Alexander Abramov — After that, it first decreased, then briefly recovered to a more modest level, and after 2014, only a few state-owned banks remained profitable, and the profits of the rest fluctuate at the level of inflation.

Another reason for the trend to curtail the activities of foreign financial companies was a serious decline in the ruble. And as long as Western investors are accustomed to focussing on profitability in the usual currencies, the double fall of the ruble for them was a double depreciation of dollar investments. Such a decrease in financial flows for several years, of course, can not suit strategic investors. In addition, there is constant talk about sanctions, there is constant talk about the sudden deterioration of the situation in our country. In such circumstances, the Western financiers to work inconvenient.

In addition, the PMI (business activity index) has been declining monthly for the past year, which exceeds the duration of its decline in 2008. This means that a very serious situation is unfolding in the real sector of the economy, inevitably affecting the financial sector. And in the face of a looming crisis, investors in the first place the withdrawal of the assets of the peripheral economies, wherein the fat years rushes of hot speculative capital. These economies include Russia.

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However, Alexander Abramov calmed down, Morgan Stanley’s decision will not bring any critical consequences for the country’s economy. The American Bank did not play any significant role in our market, so with a significant time lag, its decision to curtail its activities in Russia can only affect the institutional decisions of other Western investors to adjust its strategy with respect to Russian assets.

Much more noticeable, in his opinion, both the world and the Russian economic systems will be affected by the escalation of the trade war between the US and China. It can begin against the background of Donald Trump’s latest statement that Americans are tired of trade negotiations and are ready to introduce high customs duties on Chinese goods on Friday.

However, in Russia, said Vasily Solodkov, and without this lack of other very serious problems.

— I do not understand what we want to achieve by our economic policy. We are categorically continuing to deteriorate the business climate. Redistribution of resources in favor of state monopolies is growing. And it is quite natural that in such conditions foreign serious players leave, trying to avoid unnecessary problems.

“SP”: — A why is happening such a mess? Why can’t we have a clear reference point?

— You see, the current model of the commodity economy for the first time failed in 2013, when investments and economic growth began to decline. Then there was “our Crimea” and all the rest.

The reason for all our troubles is that our economy is not market, but quasi-state, with elements of feudalism. At the mercy of specific comrades given the whole industry, as it was in Europe in the Middle Ages. As a result, investments become ineffective, and all savings, including pension savings, are lost. However, those who distribute these flows are doing very well.

“SP”: — In November last year, economists of the highest echelon of power voiced the most pessimistic scenario for Russia: in 2019, a significant outflow of capital, multiplied by the strengthening of sanctions and the decline in capital amid falling oil prices to $ 35 per barrel, will lead to a recession of our economy. Now it is almost the middle of 2019. Is it possible to say whether such a gloomy forecast has been realized or not?

— The most pessimistic scenario is an embargo on Russian energy exports. Here the forecast has not come true. If we look at capital outflows, this process is not only continuing but also intensifying. Taking into account what is happening in our statistical agencies, the real growth rate of the economy is close to zero. This is, of course, a little better than the recession, but it is still very bad. Especially given what is happening in the rest of the world.

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In America, with a completely different base than ours, the growth rate is 3.2%. Therefore, the most pessimistic scenario for Russia has not yet been realized (and God forbid that this happens). But, judging by what is happening, we are doing everything to ensure that in the end, this is what happened.

“SP”: — How difficult, and most importantly — is it possible to correct the existing situation? Is there anything you can do?

— The development of competition is very useful, not only in the economy but also in politics. We seek the opposite. If there was a public demand for the competition to grow, it would be a positive signal that the country is moving into the future. Now the movement is in the direction of monopolization, which leads to terrible consequences.

Take at least the “law of Spring”, which was aimed at the security of the country and the sovereignty of the Internet. But as a result, now foreign equipment is purchased because its own is not produced. Look at the aviation industry — every day, some sad events.

The country must return to the path of pluralism and freedom of speech as it did at the turn of the 1980s and 1990s.

“SP”: — But the results-as we remember were then sad for the economy and for the majority of the population…

— Then these transitions were carried out at a terribly low level of oil prices and the accumulated problems of the USSR. Now the situation is different. There are large reserves and high oil prices. There are prerequisites for normal development, it is another matter that they are not implemented. That is, the transition period of the “dashing nineties” in the current conditions would be useful for our economy?

— I think, not only for the economy but also for politics. They cannot be separated. If in our policy, all twisted in one particular person, exactly the same thing is happening in the economy.

“SP”: — is it Possible in this case to assume that in 2024 with the change of the President there will be a change of economic course?

— It’s a difficult question. Changes can be such as in one of the previous election cycles when the President seems to have changed, but the center of decision-making, in fact, just moved from one office to another. There should simply be compliance with the current Constitution, which is just spelled out for such cases. But you will tell me where it is observed, despite the fact that it is the law of direct action?