In November 2001, Presidents Bush and Putin welcomed the creation of a
private-sector led U.S.-Russia Banking Dialogue to support the building
of a vigorous banking sector in Russia that turns Russians' savings
into investment and jobs.
The dialogue has worked to lend a unique perspective to banking
reform in Russia by bringing together representatives of Russian small,
medium and large banks; foreign banks; banking and business
associations; and small and medium businesses.
During their meetings in Moscow, Dialogue participants presented
the two Presidents with a report containing specific, concrete reform
recommendations. These recommendations build on the Russian
Government's banking reform strategy and identify steps that the
private sector believes will produce early and tangible results. The
report is a valuable and timely document. Its recommendations include
measures to address the following challenges:
Leveling the playing field for private and state-owned banks,
addressing in particular the phasing out of state ownership of
commercial banks and changes to laws and regulations to improve private
banks' ability to compete.
Expanding small and medium-sized business access to credit by
removing unnecessary administrative burdens on banks that increase the
cost of lending to small business and supporting a more active role for
well-regulated credit cooperatives and other non-bank financial
institutions that service underserved regions and sectors.
Reducing bureaucratic burdens on banks. This could include
adopting international standards for supervision and regulation, as
well as changing laws and regulations to give banks access to risk
management tools in line with international best practices.
Increasing transparency among banks and their clients with the
timely adoption of international accounting standards and improving
information exchange among banks.
Bolstering creditor rights by strengthening laws on
collateral, training judges, and improving the legal basis for
collateralized lending, such as mortgages and financial leasing.
Reducing administrative and tax burdens and deepening
liquidity in the system consistent with prudential standards.
Sharing international best practices through private bank
contacts and training programs, some of which could be sponsored by the