OREANDA-NEWS. Ministry of Finance representatives indicated on October 19 that the government will start to place excess liquidity from Treasury accounts with Russian banks, Alfa Bank's information division disclosed. The size of state accounts at the moment is around R1.5 T ($60 bln). The experts view this news as positive, as it demonstrates that the Russian government intends to provide Russian banks with money to finance their growth. Given the country's low level of private savings, equivalent to only 16% of GDP, the Russian budget, with its 7% of GDP surplus, is the key long-term financial resource in the Russian economy. Using this instrument will prevent the Russian banking sector from experiencing an excessive slowdown in lending. However, according to the experts, the disadvantage of this measure is that it will by definition reinforce the asymmetry in Russian banks' positions: The largest are more likely to gain access to state funds than the small banks. Generally, this news confirms the analysts' view that the Russian banking sector will become more concentrated in the
wake of the current liquidity squeeze.