Tighter Bank Rules Better Than Prostate Cancer, VTB Chief Says
(Bloomberg) -- Andrey Kostin, the head of Russia’s state-run VTB Bank, said he lost his fight with the central bank to postpone potentially painful new capital requirements, but he hasn’t lost his sense of perspective.
“There are worse things in life than Basel III, like prostate cancer,” Kostin, 62, said Wednesday at the bank’s Russia Calling forum. “So, the heck with it, let’s go with Basel III.”
Kostin had lobbied to delay Basel III, which he estimated will cost Russia’s second-biggest bank 150 billion rubles ($2.2 billion) next year. He even found backing from Finance Minister Anton Siluanov, who favored looser regulation as state banks cope with the pressure of U.S. sanctions. The tighter capital rules could keep state-run VTB from paying out half its profit as dividends as requested by the government.
But sitting between central bank governor Elvira Nabiullina and Siluanov at the VTB conference, Kostin conceded defeat.
“I struggled for a long time, tried to convince the central bank of the need to correct or reject Basel III,” Kostin said. “I lost this ideological dispute, went over to the Central Bank, said yes, Basel is everything for us.”
Kostin didn’t explain why he chose to compare the rules to prostate cancer. He is known for colorful language, such as calling former U.K. Foreign Secretary Boris Johnson a “freak” in speech to students in September, for which he later apologized.
Since Kostin estimated next year’s cost from the new rules, the central bank has proposed easing the timeframe for raising the buffers. Russia’s 11 systemically important banks will have to boost capital adequacy by 0.975 percentage point over the course of 2019.
He said Wednesday that the bank is working on its capitalization and will have the resources to meet the requirements the central bank implements.
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