We have permitted that reserves on such loans may temporarily not be increased so that banks can carry out this large-scale, really large-scale, programme, spread losses over time, and enable businesses and households to regain their creditworthiness. But in the short term, I urge banks to do this. Banks must assess the real loan portfolio quality. It is very important that the recognition of losses on non-refundable loans is not overly delayed. I understand that banks will want to drag out this regulatory easing, but “delaying” the recognition of losses can lead to banks not being able to direct resources to lending to effective companies. Having non-performing assets on the balance sheet reduces investor confidence. There are many examples in global practice where there was a delay in recognising bad assets: the “lost decade” in Japan in the 90s, the situation in a number of European countries following the global financial crisis of 2007–2009, and our own experience in 2008–2009. Therefore, we have decided to gradually phase out regulatory easing. We will really phase it out, as Mt Aksakov has urged, carefully. But the phase-out is necessary. And the banks that made use of the easing will have to build up reserves in full for loans to large companies by 1 April next year, and for household loans and loans to SMEs — by 1 July next year within a timeline convenient to them. Banks can also use capital that has been formed to meet capital adequacy buffers but with appropriate restrictions on profit distribution.
In general, the proposals put forward by Mr Aksakov, there are many of them regarding several areas — we will, of course, carefully develop them together with you. Some have been worked out, some require further development, and we will maintain constant dialogue with you. We also understand that we have a fairly consistent, intense, and constructive dialogue with the Association, and we value it very much. In conclusion, I would like to say that yes, every crisis entails losses. Yet, there are not just losses, there are opportunities. It is a platitude, but we can see from the situation in the banking sector that this could be a new impetus and, above all, could kick-start the expansion of digital banking. That should be taken advantage of. On our end, as a regulator, we will do our best to ensure that all banks are on an equal footing in this race. To close, I would like to highlight that the way the banking system is handling the situation really inspires optimism. Rapidly adapting to new conditions, restructuring its work all the while implementing large-scale restructuring programs (I do not recall there being such large-scale restructuring programs in recent history), and at the same time not stopping lending — it really was a very serious challenge. The banks are dealing with it honourably. There are rough edges of course. There are always problems and we are discussing them, but in general, of course, we are coping.