Russian Banks Say We Do Not Want Your Money…

ceramic piggy bank
Saving Money…

Russia’s banks are trying to limit new deposits by clients in the short term, as they face up to excess liquidity and a lack of quality borrowers.

Research conducted by Expert Rating Agency and the National Association for Financial Studies, shows total Russian bank deposits in 2009 were up 26.7% year on year to 7.5 trillion rubles. This was mainly due to a general public trend towards saving where possible, against a backdrop of severe economic recession, coupled with rising bank deposit rates, as Russian retail banks found themselves fighting for depositors to ease liquidity concerns, which pushed deposit rates as high as 20%

Deposits are expected to grow by up to 25% in 2010, as Russians save like never before! So – “Banks today have excessive liquidity, but they don’t really see any reliable and quality borrowers to credit. So, they need to make such offers just look attractive enough to retain existing clients, but not attract any new ones.”

I hate to tell the banks this but Russians do not borrow money in the first place like people in the Western world do and they still believe in the old saying, “Save for a rainy day!”

So how can you have too much cash on hand? Why is that a problem? (and if it is) Why did we make it to be a problem?

Now the world is worried about excess liquidity – “Cash held by a bank above the normal requirement for that bank.”

I think that our world has gone “crazy” and “to hell in a hand basket”…

Sorry we don’t want your deposit money!

Windows to Russia!