After the 'quake — Russian Banking Banana Skins 2010

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According to the 10^th Banana Skins Banking Risk Survey carried out by the Centre for the Study of Financial Innovation (CSFI) and PricewaterhouseCoopers (PwC), risk management and credit risk in particular remain major concerns for Russian banks.

The survey received responses from 31 Russian bankers. The respondents identified 30 key risks and ranked them according to priority.

The Russian response showed their concerns about the prospects for the banking industry, facing as it does an uncertain economic recovery and the likelihood of a strong rise in bad debts (personal and corporate). One banker feared there would be “a catastrophic fall in the quality of credit portfolios”. Respondents focused on the difficult consequences for profitability and capitalisation. Other areas of strong concern were perceived management weakness and shortages of skills, particularly in the area of risk management. There was also an expectation of tougher regulation, particularly in capital adequacy. There is much concern about the integrity of bank systems and a possible rise in fraud and other operational losses.