Press Clippings

29 June 2005Putin says Alfa-Bank’s liquidity problems in 2004 artificial, Prime-Tass

The liquidity problems that Russia’s Alfa-Bank faced during the mini banking crisis in June-July 2004 were artificial, Russian President Vladimir Putin said Wednesday at the meeting with Alfa-Bank’s President Pyotr Aven.

“I hope that since our meeting last year there were some positive changes, and currently the tensions have passed,” Putin said. “Though, I think that they were caused artificially,” he added without elaborating.

“In 2004, despite the tensions, which I suppose were artificial, you were not greedy and dealt with your clients correctly and fairly,” Putin said.

Russia’s banking sector suffered a confidence crisis last year. Alfa-Bank top executives said then cash shortages at ATMs were the cause of the problems, which drove alarmed depositors to withdraw their funds in fear of a bank liquidity crisis.

In October 2004, the Moscow Arbitration Court upheld Alfa-Bank’s claim against Kommersant Publishing House that Kommersant business daily had published false information about the problems the bank was facing in June-July 2004.

Aven told Putin that Alfa-Bank was “working effectively” with the Central Bank of Russia (CBR). “We are grateful to the state and the CBR for help in 2004,” Aven said.

Putin and Aven also discussed the issue of mortgage system development in Russia. Aven said that it may take up to three years before mortgage loans become as popular among bank clients as consumer loans are now.

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