Wednesday, 25 August 2010

Bank of Moscow braces for Luzhkov’s departure

City elections loom in 2011 and Medvedev’s rejuvenation campaign in regional authorities leaves Mayor Luzhkov looking far from secure in his seat. This could spell bad news for Bank of Moscow’s credit ratings, as city money is closely tied up with the bank.

A new mayor would in face be a ‘major risk,’ Troika Dialog Analyst Ekaterina Sidorova said. When Luzhkov does go, the bank could lose its quasi-sovereign status and city serving privileges. City money makes up a third of the bank’s funds from clients, including state enterprises. It could have to borrow to make up the shortfall.

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