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#20 - JRL 7187
IMF says Russia bank reform progress disappointing

MOSCOW, May 19 (Reuters) - Russia's progress in pushing through badly needed measures to restructure its banking system was "still disappointing," senior IMF Resident Representative in Russia Paul Thomsen said on Monday.

"I do think that overall the progress on banks' restructuring is still disappointing," said Paul Thomsen. "If you look back at the past three or four years it is the area where reforms move too slow," he told reporters.

He said banks appeared to be dragging their feet in the face of pressure to reform from the central bank.

He also referred to "the delay (by the banks) in adoption of IAS accounting standards, the fact that there seems to be resistence to a strengthening of banking supervision in the context of deposit insurance."

"This is a difficult political battle and the central bank is pushing in the right direction, that is what matters," he added.

The IMF was also worried that a fast expanding bank loan portfolio could come under pressure if high oil export prices, which have been fuelling Russia's economic growth, were to drop.

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