Europe: Russia’s catch-22

Author: | Published: 22 Jan 2015
As useful as a Russian bailout
Rushing through emergency legislation to prop up its troubled lenders is not enough to save Russia from a financial crisis in 2015.

On December 22 its central bank had to intervene after a deposit run threatened to bankrupt midsize lender National Trust Bank.

At the time of writing, state-owned banks VTB and Gazprombank were also reportedly receiving government hand-outs. The reality is that Russia's President, Vladimir Putin, finds himself in a catch-22.

He can either decide not to recapitalise the banks and risk catastrophic defaults, or...