It's Time to Withdraw Money From Deposits

The IMF mission indicated the extreme vulnerability of the Belarusian banks.

The results of stress tests of the Belarusian banks show their vulnerability , the head of the IMF mission in Belarus Peter Dolman stated at a briefing in Minsk.

Senior analyst of Alpari Vadzim Iosub explained Zautra Tvaye Krainy the sense of the vulnerability.

The meaning of the stress tests is to model the situation: what will happen to banks, their liquidity, credit portfolio, if the economic situation worsens. For example, what will happen if oil price drops.

To reduce these risks, according to a financial analyst, the economy should take drastic changes. In many ways they are connected with the continuation of directed lending, which, however, sequentially decreases because of recommendations of the International Monetary Fund.

- And still loans to businesses with questionable efficiency are being issued. The ability of these enterprises to service debt raises questions, Vadzim Iasub stresses.- A significant part of such loans are issued under the state guarantee. In case of risk realization debts will become a burden for the budget and hence taxpayers.

How reliable repayment guarantor is the government?

- The reliability of any government is determined by its ability to collect taxes, that is, the budget replenishment. In any case, if the risks are realized, the money will be returned to the budget. And it would mean cuts in other expenditures, perhaps social ones, the expert predicts.

Do banks try to resist the financing of problem enterprises?

- In most cases loans are issued by public banks, and if we mean them, they have no chances to resist the will of the main shareholder - the state, the financial analyst believes.

Vadzim Iasub believes that everyone is aware of damage caused by directed lending and it decreases.

- But it is impossible to stop it at once. This is about backbone enterprises, the largest ones with a great number of employees. Amid absence of an unemployment protection system to cease lending means to leave tens of thousands of people jobless. The government and the IMF today will seek different approaches to reorganization, so that it does not severely affect the population, the economist predicts.