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News > International
Russian banks face collapse
November 13, 1998: 6:22 a.m. ET

Debt moratorium ends Saturday, hundreds of banks could fold
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LONDON (CNNfn) - A Russian central bank official says more than 700 Russian banks may collapse over the next few months raising fears of a global credit crunch, according to press reports.
     Andrei Kozlov, the central bank's first deputy president, told a parliamentary committee that 720 financial institutions, almost half Russia's 1,500 banks may close because the government doesn't have enough money to save them.
     A 90-day moratorium on repaying overseas debts expires Saturday, and many of Russia's banks will be forced into bankruptcy when overseas banks start chasing their money.
     Kozlov said Russia needs $2.5 billion to keep afloat the most important parts of the banking system. To keep all the banks above water would cost about $9 billion..
     Estimates suggested less than one third of the banks' overseas loans - worth $6 billion in total - can be repaid. In addition, Russian banks are expected to default on many more billions of dollars in commercial loans. Back to top

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