MOSCOW, 12 Mar – RIA Novosti. The Bank of Russia will consider the regulation of floating interest rates on consumer loans, which are issued for a long period, said the head of the regulator Elvira Nabiullina.
In early March, Russian President Vladimir Putin instructed the government and the Central Bank to ensure the adoption of a law regulating the procedure for changing floating rates and terms on loans to the population, including mortgages, by July 15. The Bank of Russia then released a report on this topic, which noted that lending at floating rates, with a sharp increase in them, could “infect” other loans of the borrower, and this is a systemic risk for the banking sector. “In our report on floating rates, we singled out mortgages from – because it is a long loan, which increases the risk of rate hikes in the long term. Consumer loans are shorter, although now they already exist for five and seven years, “the head of the Central Bank said in an interview with the Izvestia newspaper.
However, she noted that the Bank of Russia in the discussion of this topic will certainly consider consumer loans, “if they are long and there is a large interest rate risk.”
At the same time, according to Nabiullina, a complete ban on the use of floating rates in the Russian Federation is an “extreme case.” “We studied international experience, it is set out in the report, and shows that there are softer ways of regulation. For example, limiting rate changes so that the borrower understands what level of change is acceptable, for example, by 1-2%, but no more,” she said.