Russian Banks Exposed in Ukraine's Political Crisis | Business | The Moscow Times

Russian Banks Exposed in Ukraine's Political Crisis | Business | The Moscow Times:

"The political crisis in Ukraine, sparked by an East-West power struggle in which Moscow has gained the upper hand, is increasing the risk to the country's financial system and creating a particularly acute headache for Russian banks.

As crowds took to the streets to protest after Ukrainian President Viktor Yanukovych rejected a trade and cooperation deal with the European Union last week in favor of closer ties with Russia, Ukraine's rattled central bank, low on reserves, appealed to people not to pull their deposits from the banks.

Ukraine has a "systemic" problem with bad loans but its interbank money market is functioning normally despite the upheaval of the past week, Russia's state development bank VEB said Wednesday.

Ukraine seems to have little immediate prospect of additional financial help to meet its big external deficits and financing needs, making it even less attractive to the foreign banks that flocked there before the 2008 collapse of Lehman Brothers triggered the worst of the global financial crisis."

'via Blog this'