The Association of Regional Banks 'Russia' sent a letter to the Chairman of the Central Bank expressing concerns that possible changes in compulsory sales of export revenues might trigger the destruction of the market system of currency rate formation based on the Unified Trading Session (UTS).
At the end of July 2002, the Central Bank stated that it had almost prepared new regulations for the compulsory sales of export revenues suggesting a considerable simplification of regulations. "The public pricing system, formed on the currency market, is an important achievement of the first decade of economic reforms", the letter says. If possible consequences of this step are not analysed, these changes can have a negative impact on the banking system and the economy of Russia, the Association believes. For example, the cancellation of the UTS will directly influence the activities of regional banks, as the existing mechanism has an important macroeconomic function of redistribution of currency flows among the center and the regions of Russia. About 250 regional banks currently work at the UTS. Their share in its turnover is 30 percent. If the current mechanism of the currency market structure is cancelled, Moscow banks will become monopolists on this market and get an opportunity to handle the currency rate, the Association points out.
"From its part, the Association is ready to participate in developing new approaches to building a mechanism of public rate formation and regulations for compulsory sales of export revenues", the letter says.
The choice of the city of Helsinki is not incidental as the capital of Finland had hosted US-Soviet negotiations on the limitation of nuclear stockpiles in 1969