Russia: Funds want the cash under the mattress

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Russia: Funds want the cash under the mattress

Confidence in Russian banks is returning and funds are springing up to try to draw billions of dollars stuffed under Russian mattresses into the financial system.


Russia's stock market has recently been the best-performing in the world and robust economic growth remains relatively insulated from an impending global slowdown.


Russians hold anything between $40 billion and $60 billion in cash dollars, a sum that has had Russian bankers salivating for years, but the population's justified distrust of the banking system has meant that repeated attempts to coax this money into the daylight have failed.


As Putin's drive to reform Russia Inc continues and gathers credibility, changes to the financial sector are picking up momentum and banks are having another go at getting ordinary Russians to invest their hard-won savings. At the same time, banks are setting up funds aimed at foreign investors.


The government kicked off the first serious attempt to reform the ailing banking sector with a meeting between the Central Bank of Russia (CBR) and the cabinet, which has been implementing the reforms.


A reconstruction of the banking sector is the first really complicated reform the Kremlin has attempted.






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