FAS PROPOSES TO REDUCE THE VALUE OF BANK ASSETS

The Federal Antimonopoly Service has developed and submitted to the Government of the Russian Federation a draft resolution, which involves reducing the value of the assets of credit institutions from 33 billion rubles up to 29 billion rubles.

Decree of the Government of the Russian Federation dated October 18, 2014 No 1072 establishes the value of assets of financial organizations, in excess of which it is required to obtain the preliminary consent of the antimonopoly authority for transactions and other actions provided for by the Law on Protection of Competition [1].

As part of the annual revision of the values of the asset value of credit and microfinance organizations [2] and based on the results of a study of the state of the competitive environment in these markets, the FAS Russia came to the conclusion that it is necessary to reduce the threshold value of the asset value of only credit organizations.

The results of the study showed that there are currently a number of credit institutions with significant stakes in certain regional markets for banking services, transactions and other actions in relation to which may lead to an increase in concentration in the respective markets.

“The assets of such banks do not exceed the currently established value and, accordingly, transactions in respect of them are not subject to state control in the area of economic concentration,” Olga Sergeeva, Head of the Department for Control over Financial Markets said.

“To prevent further growth of market concentration in regional banking markets, which are already highly concentrated, Antimonopoly authorities should be able to control transactions of economic concentration in relation to such organizations," she added.

Simultaneously, based on the results of the study it was decided not to change the value of the assets of microfinance organizations in connection with absence at present of such a need due to some small changes in the value of the assets of such organizations in the past year.

[1] by articles 27 and 29

[2] According to point 4 of the Decree of the Government of the Russian Federation of 18.10.2014 No. 1072 On Establishing the Asset Values of Financial Organizations Subordinate to the Central Bank of the Russian Federation for the Purposes of Antimonopoly Control, the Federal Antimonopoly Service in coordination with the Ministry of Finance of the Russian Federation and the Central Bank of the Russian Federation annually, till December 25, submits to the Government of the Russian Federation proposals on change of the value of assets of credit organizations and microfinance organizations specified in point 1 of this resolution according to data on change of the value of assets of credit organizations and microfinance organizations of the Russian Federation respectively for the past year.