Thursday 19 September 2013

Government to Save VEB With 1.1 Trillion Rubles | Business | The Moscow Times

Government to Save VEB With 1.1 Trillion Rubles | Business | The Moscow Times:

"The government is expected to allocate 1.1 trillion rubles ($30 billion) to Vnesheconombank within the next seven years in order to save it from default, a news report said Thursday.

McKinsey and Co., a consulting firm that provides services for Vnesheconombank, said that the bank currently needed 400 billion rubles to cover up loans which it provided under non-market conditions, Kommersant reported.

However an estimated 1.1 trillion rubles in total must be allocated to the bank by 2020 so it can continue financing large infrastructural projects, such as the construction of sport facilities for the 2014 Winter Olympics in Sochi.

McKinsey said that because of government's plans to increase the amount of investments into infrastructural projects and modernize the economy, the bank will constantly need state support."

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