THE KREMLIN IS faced with a nasty problem. State-owned Vneshtorgbank (VTB) is the second-largest bank in the country and is not a great commercial success but needs to be. State-owned Sberbank, Russia's biggest bank, has become too successful and is squashing the rest of the sector.
These two banks sum up the problems the Central Bank of Russia (CBR) is facing as it makes the first ever concerted effort to reform Russia's ailing financial sector.
Between them the two state-owned banks account for over one-third of the entire sector's assets but the state can't get out of either bank quickly and their very existence is making reforms harder.
Ironically, the government is pitted against itself in trying to boost VTB's attractiveness. Despite its size it still only does about 4% of corporate banking business, on a par with all the other leading private commercial banks.