in the best case these people were not particularly gifted or responsible bankers, and as a result they triggered the collapse of their credit institutions. Here we are faced with a question about which objectives and targets the Association can deliver 1/4  BIS central bankers' speeches  on. Should it set standards (including ethical ones) for the banking sector; should it be the voice of the banking community in dialogue with the regulator or should it stand up for ‘bad’ banks? I would like to place special emphasis on the fact that when the Bank of Russia withdraws unstable or fraudulent credit institutions from the market, it first, protects the interests of depositors and creditors, and only thereafter is interested in protecting the interests of scrupulous banks. The clearing of the banking sector is yet to be completed, therefore corporate customers will not just choose from banks offering products and services they need, but seek to mitigate the risk of losing money. In particular, it also manifests itself in the authorities’ efforts to determine specific criteria for banks, or a list of banks, which can be entrusted with budget funds and the funds of public companies. The ARB raised the point that these criteria restrict competition. Let me repeat, competition is undermined by fraudulent banks which remain on the market, while attempts to limit risk by means of registers and criteria are just a corollary.
The aggregate capital adequacy ratio sits at a comfortable level slightly above 13% (the minimum 2/4  BIS central bankers' speeches  value is 8%). We estimate that current capital stock is worth 1.8 trillion rubles, which is sufficient to boost lending. Banks’ nominal profits have recovered to the pre-crisis level of roughly one trillion rubles, though real profits are still below the pre-crisis readings. In relation to 2013 prices, profits are still 30% lower. We expect banks to use their profits to boost growth in the banking business, and to step up lending. To do so, they should convert the bulk of their profits into capital. Currently, financial statements suggest that 88% of profits will be converted into capital. I hope that the final figure, after profit allocation between shareholders has occurred, will not differ greatly. Furthermore, banks’ profits increased by 212 billion rubles in the first two months of 2017, a growth rate 2.5 times that of the same period of the previous year. Despite the fact that the current situation in the banking system is quite good, we believe that changes are brewing, which will allow the banking system to more efficiently meet citizens’ demand and economic development objectives. Both bills which we consider to be pivotal - the proportional banking regulation bill and the new resolution mechanism bill - have passed the first reading at the State Duma.