London/Moscow: Otkritie Financial Corporation, one of the largest financial groups in Russia, has teamed up with the Gaidar Institute for Economic Policy (“Gaidar”), a non-profit research and education foundation, to launch its Financial Stability Index (“FSI”) on Russia.
The introduction of the FSI coincides with fears of a second financial crisis as August saw Russia’s stock market heavily sold off and the RTS index falling from over 2000 to 1200 in a matter of weeks. Although the Russian financial sector remained relatively stable during recent eurozone turbulence, rising uncertainty in global economies are a source of concern for future trends in Russia and highlight the need for the index, designed to forewarn of potential volatility.
FSI is a composite index that includes dynamics of monetary indicators (monetary aggregate M2, the money multiplier, core CPI, the amount of bank deposits with the RF CB and BBR with commercial banks), interest rates (the rates in the interbank market, mid- and long-term rates in the GKO-OFZ market), balance of payments indicators and foreign exchange markets (International reserves of the Central Bank of Russia, the ratio of monetary aggregate M2 to international reserves, real ruble exchange rate against the U.S. dollar) and stock markets indicators (the RTS index, MICEX index of corporate bonds, government bonds index RGBI). The aim is to achieve more clarity of how Russia’s financial system is faring in the face of Europe’s sovereign debt crisis and prepare for possible market disruptions.
Vladimir Tikhomirov, Chief Economist at Otkritie Financial Corporation, explains:
“We back-tested the index to 1998 and it works well. Between August and October this year, only one of the 15 indicators of the FSI signalled rising instability in Russia’s financial system. This indicator represents the sum of deposits of commercial banks with the Central Bank of Russia (CBR) and CBR bonds held by credit institutions, which tumbled by 45%.
The FSI suggests that the above mentioned trends only slightly increased the likelihood of financial instability in Russia from November and our index barely moved – remaining at 0.2 compared with 2.8 during the 2008 crisis.”
On current market conditions, Savov comments:
“If the ruble falls in value against the dollar, then the CBR can increase interest rates and the two actions cancel each other out. The system we have now is more flexible and stable than what we had before the crisis began in 2008.
Banks are being squeezed by the general slowdown and low risk tolerance at the moment, however a combination of concerted actions by the CBR to contain liquidity issues and expected end of year increases in budget spending, should resolve any threats to the Russian banking sector.”
For all client and prospect enquiries please get in touch to learn more about Otkritie’s research.
Otkritie Financial Corporation (OFC or the ‘Group’) was founded in 1995. The Group is one of Russia’s leading financial institutions, focusing on investment banking, commercial banking, brokerage services and asset management. The Group includes: Otkritie Bank, Otkritie Brokerage House, Otkritie Management Company, Otkritie Debt Center, Otkritie Capital – the investment banking arm and Otkritie’s Insurance Company “Otechestvo”. The Group has the country’s widest network at its disposal, comprised of more than 240 offices in 58 cities spanning the whole of Russia. Otkritie Financial Corporation is also represented globally, with offices in New York, London, Frankfurt, Limassol and Kiev.
For more information visit www.open.ru/en
rgbi, micex, rts, otkritie capital, otkritie financial corporation, otkritie bank, otkritie management company, financial groups, banking, brokerage services, investment banking arm, asset management, widest network, bank deposits, investment banking, frankfurt, limassol, moscow, london, new york, kiev, gaidar institute for economic policy, central bank of russia, russia, gaidar institute, europe, vladimir tikhomirov, economics, monetary policy, finance, money, economy of russia, central bank, money supply, bank, commercial bank, financial crisis, chief economist
News: RTS Realtime Systems Powers New Bolsa Mexicana De Valores Front-End For Members - Expanded Relationship Facilitates Integrated Access To Equity And Derivative Markets
1173 days ago,(2012/06/14) - News Articles
RTS Realtime Systems Group, a leading global trading solutions provider, and the Mexican Stock Exchange BMV (Bolsa Mexicana de Valores) announced today the roll-out of a new f...
1082 days ago,(2012/09/13) - HFT Review
Following the FORTS Derivatives market, on September 3, 2012 the Moscow Exchange Securities and FX markets has successfully introduced measures to encourag...
1176 days ago,(2012/06/11) - News Articles
Otkritie Capital (‘Otkritie’), the investment banking arm of Otkritie Financial Corporation (‘the Group’), has bolstered its DMA (Direct Market Access)...
News: MICEX-RTS FX Market Total Turnover Made By Clients Of The Participants Exceeds RUB1.4 Trillion
1277 days ago,(2012/03/02) - News Articles
By the end of February 2012, a total turnover in the MICEX-RTS FX market made by clients of the market’s trading participants exceeded RUB1.4 trillion. The absolute le...
664 days ago,(2013/11/05) - NovaSparks
National Bank Financial completes the deployment of NovaSparks FPGA Matrix technology for North American equity and futures data feeds NovaSparks™, an FPGA market data ...
159 days ago,(2015/03/25) - Fidessa
Canadian investment manager extends use of fully managed buy-side solution Boston, March 25th, 2015 – Fidessa group plc (LSE: FDSA) today announced that Fiera Capital C...