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Kremlin Said to Urge Basel III Delay as Economic Crisis Hits 

September 30, 2015

Andrew Biryukov, Ilka Arkhipov, Evgenia Pismennaya, Bloomberg Business

Kremlin aides are urging Russia’s central bank to delay introducing tougher capital rules for lenders known as Basel III, arguing they may deepen the worst economic crisis in six years, three people familiar with the matter said.

The requirements, due to take effect Jan. 1, may force banks to cut corporate lending, prolonging a recession that was triggered by plunging oil revenue and sanctions over Ukraine, one of the people said. Noncompliance will also hurt because lenders in breach won’t be allowed to pay dividends to shareholders, including the government, so a delay may help the budget, the person said.

An Economy Ministry official proposed the Basel III delay at a meeting with Bank of Russia Governor Elvira Nabiullina and Prime Minister Dmitry Medvedev this month, one of the people said. Nabiullina, who’s in charge of safeguarding the entire financial system, rejected the initiative, according to the person.

Read more: Bloomberg Business

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