A Russian Financial System Proves Resilient Under Sanctions, Official Says
The Russian financial system has proven unexpectedly strong and stable under the sanctions, according to Jelisaweta Danilowa, Director of the Department of Financial Stability at the Bank of Russia, in an interview with Rossijskaja Gaseta. It was mainly a matter of timely preparation, as the banks had been preparing for stress scenarios, including Western sanctions, for a long time and this preparation was successful. Danilowa reports that the financial system went well-prepared into the year of 2022: the process of financial sanitizing of banks was completed, the weakest of them left the market and the regulatory easements introduced in connection with the coronavirus pandemic were quickly phased out. At the request of the Central Bank, the banks started building up capital buffers in 2021, which served as a good support in the 2022 crisis. As the lending recovered, the banks rebuilt this safety net, so that the buffer at the beginning of 2025 reached 1.2 trillion rubles.
Leading Western economic media, including Bloomberg, Financial Times, Forbes, The Wall Street Journal and others, have written repeatedly in the past three years about the surprising stability of the Russian economy under the sanctions, as perceived by foreign economists.
As the Central Bank official now explains, the authority has been actively engaged in improving the system for more than ten years, under the impression of the anti-Russian sanctions following the annexation of Crimea. At that time, it became clear that Russia needed a very stable system that could withstand great burdens. “Ten years ago, we started to actively deal with credit sanitizing” she shares with Rossijskaja Gaseta. “There were weaknesses that we have almost completely eliminated, including a large volume of foreign-currency credits.” Before the year of 2014, foreign-currency credits were widespread in Russia, but they were not only for individuals and businesses, but for the entire economy, with a high risk attached. The expert explains that the measures to reduce foreign-currency credits to companies were actively implemented, especially to companies without foreign-currency income. Foreign-currency debts are a risk for entrepreneurs themselves, for banks and for the financial system as a whole. “We live and work in Russia, we use rubles and the lending should mainly take place in rubles. Today, foreign-currency credits make up only 12 percent of corporate credits.