From Saturday's Electronic Telegraph:

ttp://www.telegraph.co.uk:80/et?ac=000154642417163&rtmo=LitLSb3d&atmo=99999999&pg=/et/99/4/10/wrus10.html

Moscow bank defaults on debt payment By Ben Aris in Moscow

ONE of Moscow's largest banks defaulted on a multi-million-pound debt repayment yesterday, the latest victim of Russia's financial collapse.

Rossiisky Kredit was Russia's seventh largest bank until the financial crisis last August but has suffered from the continued slide of the Russian economy. Nearly all of Russia's top banks are virtually dead on their feet and creditors are becoming increasingly sceptical about recovering the estimated #4 billion [$6.4b] they owe foreign creditors in loans and bonds. Eurobonds are normally considered sacrosanct by the financial community and banks avoid defaulting on them at all costs.

The banks' bosses, once the powerhouses of the Russian economy, have laid themselves open to attacks from political enemies as they are convenient scapegoats for Russian economic woes. Over the past week the prosecutor general's office issued arrest warrants for two of the seven so-called "oligarchs". Alexander Smolensky, the head of the SBS Agro bank (now re-named Soyuz Bank), which was Russia's second largest bank, is now a fugitive in Austria.

Boris Berezovsky, the billionaire financier and politician, is also stuck in France with an arrest warrant for money-laundering waiting for him in Moscow should he decide to return. The former mayor of St Petersburg, Anatoly Sobchak, is also sheltering in Paris, avoiding corruption charges.

As an IMF team arrived in Moscow yesterday to negotiate with the Russians over the desperately needed support payments from a rescue package agreed last year, the ruble has continued to sink.

The central bank has been bleeding money to prop up both the currency and troubled banks, and hard currency reserves hit a three-year low on Thursday of #6.6 billion [$10.56b], less than half of their high in 1997.

-- Old Git (anon@spamproblems.com), April 09, 1999