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- Deposit of distrust: experts assessed the possibility of freezing the deposits of Russians
Deposit of distrust: experts assessed the possibility of freezing the deposits of Russians
The authorities are unlikely to freeze the deposits of Russians, as it may cause an economic crisis, which means that the consequences of such a blockage will outweigh any possible benefits, according to experts interviewed by Izvestiya. This issue appeared in the public domain again on January 13 - the Central Bank once again expressed its position, answering questions received in a chatbot in Telegram. Such a step in the Bank of Russia called "absurd" and "nonsense". Before that, the head of the regulator Elvira Nabiullina dispelled such a myth. At the same time, the topic continues to be discussed for several months in a row. Why people still fear such a scenario, despite the statements of the authorities, and whether there are objective grounds under these fears - in the material "Izvestia".
Whether deposit blocking is possible
The discussion around the allegedly possible freezing of deposits once again appeared in the public field on January 13 - the Central Bank published answers to subscribers' questions on this topic on its resources. As the Bank of Russia stated, the idea is "absurd".
"If you freeze deposits, limit the ability of citizens and businesses to dispose of their money, then no one will be ready to keep money in banks. And this will immediately put a cross on the banks' ability to lend to the economy," the regulator explained.
Blocking would also undermine public confidence in credit institutions, the Central Bank stressed. Such an initiative is a gross violation of the rights of citizens and companies to dispose of their assets, which would shake the foundations of the financial system.
In the public field, this issue began to be actively discussed in the fall - then the opinion on the possible blocking of deposits of Russians expressed the director of the Institute of Socio-Economic Research of the Financial University under the Government of Russia Alexei Zubets. According to him, "the key rate has been decided to reduce", so Russians may begin to withdraw funds from deposits en masse. The expert believes that to avoid this situation, the authorities may go for radical measures.
Even then, representatives of the authorities refuted his words. A responsible person has no right to make such statements, said the head of the State Duma Committee on Financial Markets, Anatoly Aksakov, commenting on the speech of Alexei Zubets. Such rumors are spread only by enemies of Russia or those who want to destroy the financial system, the deputy believes.
Then the head of the Central Bank Elvira Nabiullina also expressed her position. Speaking in the State Duma, she called the idea of blocking "nonsense" and emphasized that banks have enough income to pay off depositors.
Answering the questions of subscribers in January, the Central Bank also called groundless the fears that with the reduction of the key rate savings will spill over to the consumer market and this will accelerate inflation. The regulator specified that the monetary policy will be softened gradually, which will keep deposits attractive for a long time.
In addition, the authorities do not need to take funds from deposits to finance the economy - "it makes no sense," said the Central Bank. They explained: these funds are already working for the country and are used to issue loans to businesses, the Central Bank said. The regulator summarized: it is obvious that such a step is unthinkable in any market economy, of which bank lending is an integral part.
Precedents of deposit freezing
The Russian authorities are unlikely to block funds on bank deposits, according to experts interviewed by Izvestia. Such actions will undermine public confidence in the market, cause an outflow of funds from it and its subsequent collapse. In addition, business will start to withdraw funds from the country, which would lead to a crisis. Analysts emphasized: the consequences of the freeze will outweigh any possible benefits.
Hypothetically, the reason for the blocking could be the budget deficit - deposits could be frozen to be used for government purposes, suggested Freedom Finance Global analyst Vladimir Chernov. But the risks of such actions significantly exceed the probable benefits, the expert also says. The outflow of funds from the stock market and capital from Russia, as well as the fall in the value of Russian companies' shares could cause a full-fledged economic crisis.
There is no legal basis for a "total freezing" of deposits, said Svetlana Tarnopolskaya, a lawyer at the Yukov & Partners law firm.
Situations similar to the idea of blocking deposits have occurred in developing countries in the last 10-15 years, said Vladimir Chernov. However, they have always been preceded by hyperinflation, when price growth exceeds 100% in three years - Russia does not have such rates.
For example, in 2021-2023 in Turkey limited the transfer of large sums abroad and the purchase of foreign currency, the expert recalled. In Zimbabwe in 2019, strict limits on cash withdrawals were introduced, as well as a ban on keeping dollars in accounts. In 2013, against the backdrop of the economic crisis in Cyprus under the EU aid program, large deposits (over €100 thousand) in the two largest banks of the country were subjected to "haircut" (part of the funds were written off). And in Argentina in 2001-2002 they limited cash withdrawals from bank deposits to 250 pesos per week.
In fact, there is practically no freezing of deposits in international practice, noted economist Andrei Barkhota. Most often, as in the cases described above, the savings of the population depreciate, as inflation begins to exceed the income on deposits.
In Russia, a similar situation occurred in 1991 during the "Pavlovian monetary reform," recalled Andrei Barkhota. Then the authorities restricted citizens' access to savings, and when the blocking was removed, the money simply lost its value. Now the authorities will not go for such actions - the benefits will be much less than the losses, the expert believes.
Probably, the discussions around the freezing of deposits do not subside, because the rates on them are growing faster than the key rate, said Andrei Barkhota. It can be assumed that people are waiting for a trick: with the Central Bank rate of 21% and inflation below 10%, banks are actively advertising deposit yields of 25%. For citizens over 50 years old it seems to be "an attraction of unprecedented generosity", and younger people are sure in "luring" citizens into savings products.
The Central Bank responded to this argument as well. Now citizens and companies have placed Br121 trillion in accounts and deposits - with these funds banks finance a portfolio of loans worth Br126 trillion and investments in corporate bonds for another Br7 trillion, the Bank of Russia said. Income from loans and bonds is a reliable and stable source of funds for deposit payments, so there's no sense to fear that high interest on deposits will not accrue.
According to Andrei Barkhota, in order to remove alarmist sentiments, it is important to exclude the possibility of freezing deposits by the legislative and executive authorities.
