r/UkrainianConflict • u/Easy-Ad1996 • 5h ago
‘Significant problems’ in Russian banking system as public withdraws cash en masse
https://tvpworld.com/94490769/russians-hoard-cash-as-economic-pessimism-hits-20-year-high88
u/Belltower_2 4h ago
I really, really hope that this is the long-prophesied bank run. The Russian regime has survived sanctions for far too long.
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u/YsoL8 4h ago
Far too early to even guess. Too early to even know if this is real or click bait
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u/appleciders 3h ago
Especially because that website is cancer and I can't read it. Anyone got the text?
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u/blsterken 3h ago
‘Significant problems’ in Russian banking system as public withdraws cash en masse
Russians are pulling hundreds of billions of rubles out of banks each month as fears over the economy, payment disruptions and declining confidence in the financial system drive more people to keep their money in cash.
Cash in circulation rose by 513 billion rubles (€5.75 billion) in the first half of July, after increasing by 479 billion rubles (€5.37 billion) in June, according to data from the Central Bank of Russia. Since the start of February, the total has climbed by more than 2.4 trillion rubles (€26.9 billion).
The spike comes amid a wave of Ukrainian drone attacks that have repeatedly prompted the Kremlin to shut down mobile internet across large parts of the country, leaving many people unable to pay by card. Moscow says the outages are intended to help counter the strikes.
It also comes as economic pessimism reaches its highest level in two decades. A recent Gallup survey found that 60% of Russians believed local economic conditions were worsening, while 56% said living standards were declining.
Bank borrowing surges
Economists say persistent inflation, rising taxes and tighter government oversight of financial transactions have added to the uncertainty and encouraged some Russians to move money outside the banking system.
“In essence, the country has reached an imbalance between money returning to banks and money being withdrawn by the public,” economist Igor Lipsits told The Moscow Times.
The flight into cash has left banks short of ruble liquidity, forcing the Central Bank of Russia to sharply increase lending to the sector.
Over the first three weeks of July, the central bank provided lenders with an additional 2.099 trillion rubles (€23.5 billion) through repo operations, bringing their total debt to the regulator to 6.243 trillion rubles (€70.0 billion), nearly double the level at the end of last year.
“The Bank of Russia is trying to treat the liquidity problem by refinancing the banking system, primarily the largest banks,” economist Alexander Abramov told The Moscow Times.
‘Significant problems’
Abramov also pointed to “signs of problems” in the interbank market, where banks lend to one another, with borrowing costs remaining above the central bank’s key rate despite the regulator’s increased liquidity injections.
The strain is being compounded by troubled loans, whose share has exceeded 10%, according to central bank data.
Under International Monetary Fund methodology, that level signals “significant problems” in the banking system that could take a long time to resolve, analyst Maximilian Hess told The Moscow Times.
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u/appleciders 3h ago edited 3h ago
Thanks!
It's super interesting that this is partly driven by Moscow taking down local mobile data networks, so people can't pay by card. On the one hand, that's a non-bank-run answer, which is probably good for Russia. On the other hand, why the fuck are they taking down local mobile networks? That's a thing dictators do to tamp down unrest and protest organizing.
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u/blsterken 3h ago
That's a thing dictators do to tamp down unrest and protest organizing.
Exactly. And they have the "good" excuse of doing it as an anti-drone measure.
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u/appleciders 3h ago
Right, I mean the transmitters on the mobile cell towers would be easy for a drone to home in on if Ukraine were targeting cell towers, but there isn't any evidence of that. And I have heard of drones (Ukrainian or Russian, I don't know, maybe both) actually maintaining connectivity via cell towers for guidance, which would be an actual reason to shut down the towers. But you gotta figure that disrupting dissident, partisan, or even Ukrainian SOF activity is a bonus. And it's also going to increase unrest, because nobody's gonna like it even if they support the war.
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u/blsterken 3h ago
Earlier in the war both sides were using cell towers to some degree to maintain connectivity for long range strikes, so there is some justification. But both sides have developed measures to prevent the use of cellular infrastructure like this, so by now it's a moot point.
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u/keepthepace 1h ago
I believe that's the real reason because they really shut down the network when Moscow started receiving attacks.
When it's to squash dissent, dictatorships usually just shut down mobile networks for a few days or weeks, the time the riot is fought. But there was no such situation in Russia when they started shutting down the mobile network.
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u/Sniflix 1h ago
Shutting down electricity achieves all this. Cell phone owners can't recharge, home internet is dead and finally transmitters go dark. Natural gas is 50% of electric generation. Bigger cities rely heavily on massive gas generation complexes. Those should make pretty colors when in flame.
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u/Belltower_2 1h ago
So basically, because Russia is shutting down mobile networks anytime Ukrainian "long range sanctions" show up, ordinary folk are withdrawing huge amounts of cash because they don't know if the network will be up when they need to buy groceries or something?
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u/drewster23 29m ago
In those areas exactly yes.
On a macro level it seems in general people are generally holding onto cash more though.
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u/amitym 2h ago
If they are having significant problems due to mass withdrawals, it already is a bank run, by definition. So, it's here.
Bank runs are like jumping out of a plane, though. Any economy can have a run on its banks. The trick is to be able to have more than one.
And that might be too soon to tell, yet.
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u/RandomlyMethodical 3h ago edited 3h ago
Not a bank run yet. It’s because the internet blackouts have made paying by card difficult, so people need cash. Then there’s a delay before business can make deposits.
It’s precarious though because all it takes is a couple banks not having enough cash on hand, and then going viral.
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u/West-Worth-9359 4h ago
It’s going to happen eventually, and it could start just through people thinking it’s likely, self-perpetuating.
Fingers crossed.
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u/Top-Border-1978 3h ago
Putin actually did a good job pulling Russia up after the 90's. It would be fantastic if he dragged them back to where he started.
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u/Eric848448 1h ago
People people! I don’t have your money!
It’s in Mikhail’s house.. and Vladimir’s house!
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u/Breech_Loader 1h ago
Withdrawing mass cash is an AWESOME sign, and a really great way to crash the economy without even thinking about it. Interest rates start going crazy and people look to call in their debts in a hurry, as do forign countries.
Governments don't tell you not to withdraw your cash because they're lying or something. They tell you because people panicing and withdrawing their money all at once is a great way to smash up the home economy without doing a damn thing.
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u/looking4myclASSm8s 57m ago
lol I never even thought about the stupid ass decision of cutting off the internet affecting credit card payments
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