THE SHARE OF STATE PARTICIPATION IN THE FINANCIAL MARKET SHOULD BE REDUCED
The FAS Russia proposes to develop a Concept of state participation in the financial services market
Conclusion of the FAS is contained in the Report on state of competition in the Russian Federation in 2019.
The FAS Russia conducted a study of state of competition in the banking services market at the federal and regional levels. Four segments were analyzed: lending to individuals and legal entities, attracting funds from individuals and legal entities to deposits from 2011 to 2019.
The results indicate that the tendency to the worsening competitive environment in the federal markets for providing services to individuals and lending to legal entities was continuing in 2019. At the same time since 2018, there is a positive dynamics in the federal market for attracting funds from legal entities.
Banks with state participation occupy the prevailing share at the federal level in all the analyzed segments.
In recent years, the main problem that negatively affects the level of competition in the financial sector is the presence of excessive state participation. In particular, obstacles are the distribution of public funds on a non-competitive basis as well as the establishment of unjustified restrictions on the provision of services by financial organizations.
For example, the FAS Russia has been seeking for many years to remove from the legislation requirements for state participation in the authorized capital and a certain amount of banks ' own funds in order to allow them to participate in certain types of operations. At the same time, as the analysis of the regulatory framework has shown, the highest levels of requirements in some cases do not set in federal legislation, but in regional legislation. In this regard, the FAS Russia also proposes to set the rule that the requirements established in the subjects of the Russian Federation may not exceed the levels established by Federal law for credit organizations that are allowed to engage in similar activities.
However, the problem of making unreasonable demands for admission to the provision of certain services is inherent not only in the banking market – there is a practice of establishing such requirements for leasing organizations as well.
Another urgent problem in the sphere of financial markets is the tendency to create new state financial organizations, in particular in the microfinance market. According to the FAS Russia, in order to ensure full access of small and medium-sized businesses to concessional financing, it is necessary to attract as many interested microfinance organizations as possible. Expanding the number of participants will lead to lower costs from the state budget, improve the quality and lower the price of financial services for the final recipient.
The FAS Russia considers important to approve the Concept of state participation in the financial services market. On its basis, the FAS Russia considers that it is possible to take comprehensive measures to reduce the share of state participation in the financial market, including by privatizing the corresponding blocks of shares.
“We have repeatedly said that one of the most acute problems in the financial market is the tendency to increase state participation. As a part of the preparation of the Concept of state participation in the financial market, together with the Bank of Russia, it is necessary to determine the cases in which the state can and should participate – for example, to ensure financial stability and accessibility of services. We also propose to prohibit the creation of state financial organizations in competitive markets and ensure competitive access of financial organizations to state resources,” said Igor Artemiev, Head of the FAS Russia.