Russia has been one of the biggest victims of this summer’s global banking crisis. Since May, the RTS, Moscow’s main index of shares, has lost 50 per cent of its value and in September the Kremlin was forced to pump $60 billion into its financial system as credit markets froze.

Mr Putin said: “Everything happening now in the economic and financial sphere began in the United States. This is not the irresponsibility of specific individuals but the irresponsibility of the system that claims leadership.”

Hinting at this week’s rejection of Washington’s $700 billion bailout package to rescue Wall Street, Mr Putin added: “The saddest thing is that we are seeing an inability to take an adequate decision.”

Wild swings across Moscow’s stock market and increasing evidence of stress in the Russian banking system led Mr Putin yesterday to call on ministers to find ways of strengthening the country’s money markets, which are used by banks to fund their short-term lending positions.

Mr Putin also urged ministers to create a “modern credit-finance system” that depends more on Russia’s own resources and has “a strong immunity to global financial viruses”.

Mr Putin also gave warning that the country’s substantial cash pile built up during the past two years of soaring oil prices would not be a fat enough cushion to protect the Russian economy from the global financial crisis.

His comments came as capital markets across the world waited for the US Congress to vote on a new bailout scheme for Wall Street. It is hoped that the rescue scheme will draw to a close a period of unprecedented uncertainty about the future of America’s financial institutions.

Henry Paulson, the US Treasury Secretary, has already given warning that failure to force through a rescue programme would trigger a financial meltdown in America, the world’s largest economy.

However, while Moscow blamed America for the global banking crisis, some analysts have pointed out that this summer’s invasion of Georgia by Russia exacerbated anxieties across international capital markets.

They have argued that investors pulling their money out of Russia added to instability in the financial world. The Russian economy has also been hit by the slide in commodity prices. Before the vote in Washington, the Russian stock market closed down almost 2 per cent.

October 2, 2008

From The Times

Док. 500497
Перв. публик.: 02.10.08
Последн. ред.: 03.10.08
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