Entities that integrate through “institutional protection systems” should have the attendant banks set up before the end of the year, with their boards of directors appointed and their managerial line perfectly defined. Achieving this, and the fact that, from January, the new institutions arising from integration processes will be operational, rolling over wholesale funding and negotiating on the markets on behalf and on account of the newly created groups, will lend consistency and reliability to the reform. Thereafter, a more technical and silent phase will begin, involving IT and operational adaptation, the elimination of redundant structures and staff adjustments which, as in all mergers, will take months. I am convinced that banks will tackle this process as professionally as they are completing the current phase. –  Fourth and finally, cost structures must be speedily and thoroughly revised. In a Monetary Union, a country must compete in real terms abroad, as must financial intermediaries with one another, as a devaluation entailing an exogenous competitiveness shock is not an option. To overcome the crisis, reduce unemployment and improve the future outlook for the profitability of banking assets, there is no mechanism available other than to raise productivity and efficiency, to reduce labour and structural costs, and, consequently, to lower margins and prices so that all sectors, including banking, may offer better services within the country and sell more abroad. In the coming quarters, banks’ and savings banks’ profit and loss accounts will be subject to different factors of pressure.
The second external challenge facing Russia is the changed growth model and the slowing economic growth in China, which also affect the Russian economy due to the downward pressure on commodity prices. According to our estimates, 1 percentage point of China’s slowing GDP may cause a loss of almost 0.5 percentage points in annual rates of economic growth in Russia in the medium term. It should be noted that this is true if the current structure of our relationship and the current structure of trade turnover persist. The Chinese economy now ranks second in the world and the role played by that country in the global economy and financial markets has increased considerably. The challenge for Russia is to reorient to the fast growing sectors of the Chinese economy related to consumption and post-industrial economy (the so-called tertiary sector). Low growth rates of the world economy intensify the need to carry out structural and institutional reforms in many countries to remove the obstacles to a faster economic growth. Insufficient attention was paid to such transformations over the past decade. It seemed that nothing should be changed and the global economy showed a confident growth. Structural reforms are a formidable challenge. They are often painful, infringe on somebody’s interests, and face counteraction. Each country should judge for itself what structural reforms are the most important ones and which of them may be implemented with due account of political, cultural and other factors.