Banking sector to see many bankruptcies

This autumn, Russian banks are likely to experience hard times and dramatic outcomes, Russian economist Valentin Katasonov believes.


The problem is the loan liabilities individuals have are so high they can hardly be serviced. Businesses may face the same kind of problems as well. Subsequently, financial institutions will be unable to cover their losses with their own resources and a domino effect will be observed in the banking sector.

In difficult situations like that, the government usually helps major backbone institutions while smaller banks are left to their own fate. In the expert’s view, given the scale of the crisis, most private banks will not get any government assistance and their prospects may be uncertain.

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