Dmitry Medvedev: Good afternoon, Andrei Leonidovich.
One of our strategic objectives is to turn Moscow into a global financial centre. This objective has been reflected in government decisions and at conferences, including at the latest St Petersburg forum [XII St Petersburg International Economic Forum]. The forum also declared the goal of turning our currency into one of the regional reserve currencies.
I would like to hear from you what proposals the banks, including VTB Bank, as one of Russia’s biggest banks, have on how to move forward in this direction. We realise that these are strategic goals, but in this time of instability on the international financial markets these are the objectives we have to set for ourselves and in all likelihood we do have the possibilities we need of reaching them in the near future.
I would also like to hear from you about VTB Bank’s current activities.
Andrei Kostin: Dmitry Anatolyevich,
Moscow is already a centre for capital not only from throughout the post-Soviet area but also from Central and Eastern Europe. The Russian stock market has grown very fast lately and its capitalisation now tops $1.3 trillion.
More than half of the transnational corporations working in the post-Soviet area have set up headquarters in Moscow. It is no surprise then that not only Russian specialists but also Western experts are increasingly referring to Moscow as one of the world’s new financial centres. All the possibilities for building such a centre exist.
But we cannot build this centre without the help and support of other countries. Aside from purely economic and market development, we also need to modernise our laws and make the necessary adjustments to our tax laws, and I think that these developments could become the foundation for a federal programme to create a world financial centre in Moscow.
As for the banking community, we are already taking part in this work and are working closely with the Finance Ministry and the Government. We have presented our proposals, including with regard to other world financial centres’ experience, to the Government. We think that this is an objective for the immediate future and a goal that is entirely realistic and within our reach. I think that we will achieve this goal.
As for the closely related issue of establishing a rouble settlements zone, we think that this is something that should be decided today. The VTB Group is already taking practical steps in this direction. We are already working in five CIS countries and will be opening very soon in another three CIS countries.
We are thus putting in place the infrastructure needed to use the rouble as the means of payment throughout the entire post-Soviet area. I think this is the first step towards turning the rouble into a regional currency in the post-Soviet area.
The current instability and the financial crisis in the West, in particular the crisis affecting the American dollar, provide further incentive. The dollar has been in a leading position throughout the entire post-war period, but today it has been weakened considerably. The world community needs new reserve currencies now and the rouble has everything it needs to become one of these currencies.
Dmitry Medvedev: What needs to be done to make the rouble sufficiently attractive within a relatively short timeframe so that our neighbours will consider it as a reserve currency?
We are already carrying out transactions in roubles, but the share of transactions in roubles in the total volume of transactions between Russian and foreign companies needs to increase, including in the case of energy payments, which are our main source of currency revenue.
Andrei Kostin: This is absolutely right. I think that in terms of ensuring macroeconomic stability and the rouble’s stability the Government has done a great deal of late to eliminate potential risks for businesspeople when making payments in roubles, and people really are starting to consider the rouble a stable currency.
I think that our exporters need to become more active in this respect, and I know that their partners are ready, in principle, for this. I know energy producers and industrial manufacturers, and they are all ready to work more actively on conducting payments in roubles, but this requires some extra effort, including talks with our partners. I think, though, that is an entirely realistic objective, and if we go about things the right way it is something we can settle in the very near future.
Dmitry Medvedev: It will not create any problems for the banks (for VTB Bank this is absolutely normal practice now, a road already travelled) to have all foreign trade contracts drawn up in roubles rather than foreign currencies.
Andrei Kostin: Absolutely so. This recent period has seen a move away from the dollar to the rouble, especially for payments within Russia. Russians are making much more active use of the rouble now and moving away from the dollar. I think that having export contract settlements conducted in roubles is something already on the agenda today.
Dmitry Medvedev: All the more so with the work to set up the energy resources exchange.
Andrei Kostin: That’s absolutely true. We are also involved in this work. VTB Bank has become a shareholder in the oil exchange that was opened. I think that in the context of developing a world financial centre it is very important now to develop the futures trade.
Dmitry Medvedev: In roubles?
Andrei Kostin: Yes, exactly, in roubles.