Saturday, July 2, 2011

Bank of Moscow Bailout

The Russian governmnet has bailed out one of Russia's largest banks, The Bank of Moscow. BOM is to receive a $14 billion state rescue package. The bailout is the largest in Russian history.

The bailout comes after VTB, the majority state-owned bank, claimed it uncovered 250bn roubles ($9bn) in problem loans after it bought a 46.5 per cent stake in Bank of Moscow. The loans, which represent nearly a third of the bank’s assets, were extended to companies connected to the bank’s former management.

Note to Greece, and the other PIIGS: This likely very inflationary, but this is one you can do when you have your own currency. You don't have to go begging the Germans and French.

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