Keep Us Strong WikiLeaks logo

Currently released so far... 251287 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
AEMR ASEC AMGT AE AS AMED AVIAN AU AF AORC AGENDA AO AR AM APER AFIN ATRN AJ ABUD ARABL AL AG AODE ALOW ADANA AADP AND APECO ACABQ ASEAN AA AFFAIRS AID AGR AY AGS AFSI AGOA AMB ARF ANET ASCH ACOA AFLU AFSN AMEX AFDB ABLD AESC AFGHANISTAN AINF AVIATION ARR ARSO ANDREW ASSEMBLY AIDS APRC ASSK ADCO ASIG AC AZ APEC AFINM ADB AP ACOTA ASEX ACKM ASUP ANTITERRORISM ADPM AINR ARABLEAGUE AGAO AORG AMTC AIN ACCOUNT ASECAFINGMGRIZOREPTU AIDAC AINT ARCH AMGTKSUP ALAMI AMCHAMS ALJAZEERA AVIANFLU AORD AOREC ALIREZA AOMS AMGMT ABDALLAH AORCAE AHMED ACCELERATED AUC ALZUGUREN ANGEL AORL ASECIR AMG AMBASSADOR AEMRASECCASCKFLOMARRPRELPINRAMGTJMXL ADM ASES ABMC AER AMER ASE AMGTHA ARNOLDFREDERICK AOPC ACS AFL AEGR ASED AFPREL AGRI AMCHAM ARNOLD AN ANATO AME APERTH ASECSI AT ACDA ASEDC AIT AMERICA AMLB AMGE ACTION AGMT AFINIZ ASECVE ADRC ABER AGIT APCS AEMED ARABBL ARC ASO AIAG ACEC ASR ASECM ARG AEC ABT ADIP ADCP ANARCHISTS AORCUN AOWC ASJA AALC AX AROC ARM AGENCIES ALBE AK AZE AOPR AREP AMIA ASCE ALANAZI ABDULRAHMEN ABDULHADI AINFCY ARMS ASECEFINKCRMKPAOPTERKHLSAEMRNS AGRICULTURE AFPK AOCR ALEXANDER ATRD ATFN ABLG AORCD AFGHAN ARAS AORCYM AVERY ALVAREZ ACBAQ ALOWAR ANTOINE ABLDG ALAB AMERICAS AFAF ASECAFIN ASEK ASCC AMCT AMGTATK AMT APDC AEMRS ASECE AFSA ATRA ARTICLE ARENA AISG AEMRBC AFR AEIR ASECAF AFARI AMPR ASPA ASOC ANTONIO AORCL ASECARP APRM AUSTRALIAGROUP ASEG AFOR AEAID AMEDI ASECTH ASIC AFDIN AGUIRRE AUNR ASFC AOIC ANTXON ASA ASECCASC ALI AORCEUNPREFPRELSMIGBN ASECKHLS ASSSEMBLY ASECVZ AI ASECPGOV ASIR ASCEC ASAC ARAB AIEA ADMIRAL AUSGR AQ AMTG ARRMZY ANC APR AMAT AIHRC AFU ADEL AECL ACAO AMEMR ADEP AV AW AOR ALL ALOUNI AORCUNGA ALNEA ASC AORCO ARMITAGE AGENGA AGRIC AEM ACOAAMGT AGUILAR AFPHUM AMEDCASCKFLO AFZAL AAA ATPDEA ASECPHUM ASECKFRDCVISKIRFPHUMSMIGEG
ETRD ETTC EU ECON EFIN EAGR EAID ELAB EINV ENIV ENRG EPET EZ ELTN ELECTIONS ECPS ET ER EG EUN EIND ECONOMICS EMIN ECIN EINT EWWT EAIR EN ENGR ES EI ETMIN EL EPA EARG EFIS ECONOMY EC EK ELAM ECONOMIC EAR ESDP ECCP ELN EUM EUMEM ECA EAP ELEC ECOWAS EFTA EXIM ETTD EDRC ECOSOC ECPSN ENVIRONMENT ECO EMAIL ECTRD EREL EDU ENERG ENERGY ENVR ETRAD EAC EXTERNAL EFIC ECIP ERTD EUC ENRGMO EINZ ESTH ECCT EAGER ECPN ELNT ERD EGEN ETRN EIVN ETDR EXEC EIAD EIAR EVN EPRT ETTF ENGY EAIDCIN EXPORT ETRC ESA EIB EAPC EPIT ESOCI ETRB EINDQTRD ENRC EGOV ECLAC EUR ELF ETEL ENRGUA EVIN EARI ESCAP EID ERIN ELAN ENVT EDEV EWWY EXBS ECOM EV ELNTECON ECE ETRDGK EPETEIND ESCI ETRDAORC EAIDETRD ETTR EMS EAGRECONEINVPGOVBN EBRD EUREM ERGR EAGRBN EAUD EFI ETRDEINVECINPGOVCS EPEC ETRO ENRGY EGAR ESSO EGAD ENV ENER EAIDXMXAXBXFFR ELA EET EINVETRD EETC EIDN ERGY ETRDPGOV EING EMINCG EINVECON EURM EEC EICN EINO EPSC ELAP ELABPGOVBN EE ESPS ETRA ECONETRDBESPAR ERICKSON EEOC EVENTS EPIN EB ECUN EPWR ENG EX EH EAIDAR EAIS ELBA EPETUN ETRDEIQ EENV ECPC ETRP ECONENRG EUEAID EWT EEB EAIDNI ESENV EADM ECN ENRGKNNP ETAD ETR ECONETRDEAGRJA ETRG ETER EDUC EITC EBUD EAIF EBEXP EAIDS EITI EGOVSY EFQ ECOQKPKO ETRGY ESF EUE EAIC EPGOV ENFR EAGRE ENRD EINTECPS EAVI ETC ETCC EIAID EAIDAF EAGREAIDPGOVPRELBN EAOD ETRDA EURN EASS EINVA EAIDRW EON ECOR EPREL EGPHUM ELTM ECOS EINN ENNP EUPGOV EAGRTR ECONCS ETIO ETRDGR EAIDB EISNAR EIFN ESPINOSA EAIDASEC ELIN EWTR EMED ETFN ETT EADI EPTER ELDIN EINVEFIN ESS ENRGIZ EQRD ESOC ETRDECD ECINECONCS EAIT ECONEAIR ECONEFIN EUNJ ENRGKNNPMNUCPARMPRELNPTIAEAJMXL ELAD EFIM ETIC EFND EFN ETLN ENGRD EWRG ETA EIN EAIRECONRP EXIMOPIC ERA ENRGJM ECONEGE ENVI ECHEVARRIA EMINETRD EAD ECONIZ EENG ELBR EWWC ELTD EAIDMG ETRK EIPR EISNLN ETEX EPTED EFINECONCS EPCS EAG ETRDKIPR ED EAIO ETRDEC ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID ECONEINVEFINPGOVIZ ERNG EFINU EURFOR EWWI ELTNSNAR ETD EAIRASECCASCID EOXC ESTN EAIDAORC EAGRRP ETRDEMIN ELABPHUMSMIGKCRMBN ETRDEINVTINTCS EGHG EAIDPHUMPRELUG EAGRBTIOBEXPETRDBN EDA EPETPGOV ELAINE EUCOM EMW EFINECONEAIDUNGAGM ELB EINDETRD EMI ETRDECONWTOCS EINR ESTRADA EHUM EFNI ELABV ENR EMN EXO EWWTPRELPGOVMASSMARRBN EATO END EP EINVETC ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID ELTRN EIQ ETTW EAI ENGRG ETRED ENDURING ETTRD EAIDEGZ EOCN EINF EUPREL ENRL ECPO ENLT EEFIN EPPD ECOIN EUEAGR EISL EIDE ENRGSD EINVECONSENVCSJA EAIG ENTG EEPET EUNCH EPECO ETZ EPAT EPTE EAIRGM ETRDPREL EUNGRSISAFPKSYLESO ETTN EINVKSCA ESLCO EBMGT ENRGTRGYETRDBEXPBTIOSZ EFLU ELND EFINOECD EAIDHO EDUARDO ENEG ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EFINTS ECONQH ENRGPREL EUNPHUM EINDIR EPE EMINECINECONSENVTBIONS EFINM ECRM EQ EWWTSP ECONPGOVBN
KFLO KPKO KDEM KFLU KTEX KMDR KPAO KCRM KIDE KN KNNP KG KMCA KZ KJUS KWBG KU KDMR KAWC KCOR KPAL KOMC KTDB KTIA KISL KHIV KHUM KTER KCFE KTFN KS KIRF KTIP KIRC KSCA KICA KIPR KPWR KWMN KE KGIC KGIT KSTC KACT KSEP KFRD KUNR KHLS KCRS KRVC KUWAIT KVPR KSRE KMPI KMRS KNRV KNEI KCIP KSEO KITA KDRG KV KSUM KCUL KPET KBCT KO KSEC KOLY KNAR KGHG KSAF KWNM KNUC KMNP KVIR KPOL KOCI KPIR KLIG KSAC KSTH KNPT KINL KPRP KRIM KICC KIFR KPRV KAWK KFIN KT KVRC KR KHDP KGOV KPOW KTBT KPMI KPOA KRIF KEDEM KFSC KY KGCC KATRINA KWAC KSPR KTBD KBIO KSCI KRCM KNNB KBNC KIMT KCSY KINR KRAD KMFO KCORR KW KDEMSOCI KNEP KFPC KEMPI KBTR KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNPP KTTB KTFIN KBTS KCOM KFTN KMOC KOR KDP KPOP KGHA KSLG KMCR KJUST KUM KMSG KHPD KREC KIPRTRD KPREL KEN KCSA KCRIM KGLB KAKA KWWT KUNP KCRN KISLPINR KLFU KUNC KEDU KCMA KREF KPAS KRKO KNNC KLHS KWAK KOC KAPO KTDD KOGL KLAP KECF KCRCM KNDP KSEAO KCIS KISM KREL KISR KISC KKPO KWCR KPFO KUS KX KWCI KRFD KWPG KTRD KH KLSO KEVIN KEANE KACW KWRF KNAO KETTC KTAO KWIR KVCORR KDEMGT KPLS KICT KWGB KIDS KSCS KIRP KSTCPL KDEN KLAB KFLOA KIND KMIG KPPAO KPRO KLEG KGKG KCUM KTTP KWPA KIIP KPEO KICR KNNA KMGT KCROM KMCC KLPM KNNPGM KSIA KSI KWWW KOMS KESS KMCAJO KWN KTDM KDCM KCM KVPRKHLS KENV KCCP KGCN KCEM KEMR KWMNKDEM KNNPPARM KDRM KWIM KJRE KAID KWMM KPAONZ KUAE KTFR KIF KNAP KPSC KSOCI KCWI KAUST KPIN KCHG KLBO KIRCOEXC KI KIRCHOFF KSTT KNPR KDRL KCFC KLTN KPAOKMDRKE KPALAOIS KESO KKOR KSMT KFTFN KTFM KDEMK KPKP KOCM KNN KISLSCUL KFRDSOCIRO KINT KRG KWMNSMIG KSTCC KPAOY KFOR KWPR KSEPCVIS KGIV KSEI KIL KWMNPHUMPRELKPAOZW KQ KEMS KHSL KTNF KPDD KANSOU KKIV KFCE KTTC KGH KNNNP KK KSCT KWNN KAWX KOMCSG KEIM KTSD KFIU KDTB KFGM KACP KWWMN KWAWC KSPA KGICKS KNUP KNNO KISLAO KTPN KSTS KPRM KPALPREL KPO KTLA KCRP KNMP KAWCK KCERS KDUM KEDM KTIALG KWUN KPTS KPEM KMEPI KAWL KHMN KCRO KCMR KPTD KCROR KMPT KTRF KSKN KMAC KUK KIRL KEM KSOC KBTC KOM KINP KDEMAF KTNBT KISK KRM KWBW KBWG KNNPMNUC KNOP KSUP KCOG KNET KWBC KESP KMRD KEBG KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KPWG KOMCCO KRGY KNNF KPROG KJAN KFRED KPOKO KM KWMNCS KMPF KJWC KJU KSMIG KALR KRAL KDGOV KPA KCRMJA KCRI KAYLA KPGOV KRD KNNPCH KFEM KPRD KFAM KALM KIPRETRDKCRM KMPP KADM KRFR KMWN KWRG KTIAPARM KTIAEUN KRDP KLIP KDDEM KTIAIC KWKN KPAD KDM KRCS KWBGSY KEAI KIVP KPAOPREL KUNH KTSC KIPT KNP KJUSTH KGOR KEPREL KHSA KGHGHIV KNNR KOMH KRCIM KWPB KWIC KINF KPER KILS KA KNRG KCSI KFRP KLFLO KFE KNPPIS KQM KQRDQ KERG KPAOPHUM KSUMPHUM KVBL KARIM KOSOVO KNSD KUIR KWHG KWBGXF KWMNU KPBT KKNP KERF KCRT KVIS KWRC KVIP KTFS KMARR KDGR KPAI KDE KTCRE KMPIO KUNRAORC KHOURY KAWS KPAK KOEM KCGC KID KVRP KCPS KIVR KBDS KWOMN KIIC KTFNJA KARZAI KMVP KHJUS KPKOUNSC KMAR KIBL KUNA KSA KIS KJUSAF KDEV KPMO KHIB KIRD KOUYATE KIPRZ KBEM KPAM KDET KPPD KOSCE KJUSKUNR KICCPUR KRMS KWMNPREL KWMJN KREISLER KWM KDHS KRV KPOV KWMNCI KMPL KFLD KWWN KCVM KIMMITT KCASC KOMO KNATO KDDG KHGH KRF KSCAECON KWMEN KRIC
PREL PINR PGOV PHUM PTER PE PREF PARM PBTS PINS PHSA PK PL PM PNAT PHAS PO PROP PGOVE PA PU POLITICAL PPTER POL PALESTINIAN PHUN PIN PAMQ PPA PSEC POLM PBIO PSOE PDEM PAK PF PKAO PGOVPRELMARRMOPS PMIL PV POLITICS PRELS POLICY PRELHA PIRN PINT PGOG PERSONS PRC PEACE PROCESS PRELPGOV PROV PFOV PKK PRE PT PIRF PSI PRL PRELAF PROG PARMP PERL PUNE PREFA PP PGOB PUM PROTECTION PARTIES PRIL PEL PAGE PS PGO PCUL PLUM PIF PGOVENRGCVISMASSEAIDOPRCEWWTBN PMUC PCOR PAS PB PKO PY PKST PTR PRM POUS PRELIZ PGIC PHUMS PAL PNUC PLO PMOPS PHM PGOVBL PBK PELOSI PTE PGOVAU PNR PINSO PRO PLAB PREM PNIR PSOCI PBS PD PHUML PERURENA PKPA PVOV PMAR PHUMCF PUHM PHUH PRELPGOVETTCIRAE PRT PROPERTY PEPFAR PREI POLUN PAR PINSF PREFL PH PREC PPD PING PQL PINSCE PGV PREO PRELUN POV PGOVPHUM PINRES PRES PGOC PINO POTUS PTERE PRELKPAO PRGOV PETR PGOVEAGRKMCAKNARBN PPKO PARLIAMENT PEPR PMIG PTBS PACE PETER PMDL PVIP PKPO POLMIL PTEL PJUS PHUMNI PRELKPAOIZ PGOVPREL POGV PEREZ POWELL PMASS PDOV PARN PG PPOL PGIV PAIGH PBOV PETROL PGPV PGOVL POSTS PSO PRELEU PRELECON PHUMPINS PGOVKCMABN PQM PRELSP PRGO PATTY PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PGVO PROTESTS PRELPLS PKFK PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PARAGRAPH PRELGOV POG PTRD PTERM PBTSAG PHUMKPAL PRELPK PTERPGOV PAO PRIVATIZATION PSCE PPAO PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PARALYMPIC PRUM PKPRP PETERS PAHO PARMS PGREL PINV POINS PHUMPREL POREL PRELNL PHUMPGOV PGOVQL PLAN PRELL PARP PROVE PSOC PDD PRELNP PRELBR PKMN PGKV PUAS PRELTBIOBA PBTSEWWT PTERIS PGOVU PRELGG PHUMPRELPGOV PFOR PEPGOV PRELUNSC PRAM PICES PTERIZ PREK PRELEAGR PRELEUN PHUME PHU PHUMKCRS PRESL PRTER PGOF PARK PGOVSOCI PTERPREL PGOVEAID PGOVPHUMKPAO PINSKISL PREZ PGOVAF PARMEUN PECON PINL POGOV PGOVLO PIERRE PRELPHUM PGOVPZ PGOVKCRM PBST PKPAO PHUMHUPPS PGOVPOL PASS PPGOV PROGV PAGR PHALANAGE PARTY PRELID PGOVID PHUMR PHSAQ PINRAMGT PSA PRELM PRELMU PIA PINRPE PBTSRU PARMIR PEDRO PNUK PVPR PINOCHET PAARM PRFE PRELEIN PINF PCI PSEPC PGOVSU PRLE PDIP PHEM PRELB PORG PGGOC POLG POPDC PGOVPM PWMN PDRG PHUMK PINB PRELAL PRER PFIN PNRG PRED POLI PHUMBO PHYTRP PROLIFERATION PHARM PUOS PRHUM PUNR PENA PGOVREL PETRAEUS PGOVKDEM PGOVENRG PHUS PRESIDENT PTERKU PRELKSUMXABN PGOVSI PHUMQHA PKISL PIR PGOVZI PHUMIZNL PKNP PRELEVU PMIN PHIM PHUMBA PUBLIC PHAM PRELKPKO PMR PARTM PPREL PN PROL PDA PGOVECON PKBL PKEAID PERM PRELEZ PRELC PER PHJM PGOVPRELPINRBN PRFL PLN PWBG PNG PHUMA PGOR PHUMPTER POLINT PPEF PKPAL PNNL PMARR PAC PTIA PKDEM PAUL PREG PTERR PTERPRELPARMPGOVPBTSETTCEAIRELTNTC PRELJA POLS PI PNS PAREL PENV PTEROREP PGOVM PINER PBGT PHSAUNSC PTERDJ PRELEAID PARMIN PKIR PLEC PCRM PNET PARR PRELETRD PRELBN PINRTH PREJ PEACEKEEPINGFORCES PEMEX PRELZ PFLP PBPTS PTGOV PREVAL PRELSW PAUM PRF PHUMKDEM PATRICK PGOVKMCAPHUMBN PRELA PNUM PGGV PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PBT PIND PTEP PTERKS PGOVJM PGOT PRELMARR PGOVCU PREV PREFF PRWL PET PROB PRELPHUMP PHUMAF PVTS PRELAFDB PSNR PGOVECONPRELBU PGOVZL PREP PHUMPRELBN PHSAPREL PARCA PGREV PGOVDO PGON PCON PODC PRELOV PHSAK PSHA PGOVGM PRELP POSCE PGOVPTER PHUMRU PINRHU PARMR PGOVTI PPEL PMAT PAN PANAM PGOVBO PRELHRC

Browse by classification

Community resources

courage is contagious

Viewing cable 06MINSK689, State Dominates Banking Sector

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #06MINSK689.
Reference ID Created Released Classification Origin
06MINSK689 2006-06-30 12:31 2011-08-30 01:44 UNCLASSIFIED Embassy Minsk
VZCZCXYZ0000
RR RUEHWEB

DE RUEHSK #0689/01 1811231
ZNR UUUUU ZZH
R 301231Z JUN 06 ZDK
FM AMEMBASSY MINSK
TO RUEHC/SECSTATE WASHDC 4629
INFO RUEHFSC/USOFFICE FSC CHARLESTON 1473
RUEHKV/AMEMBASSY KIEV 3349
RUEHMO/AMEMBASSY MOSCOW 3503
RUEHWR/AMEMBASSY WARSAW 3368
RUEHVL/AMEMBASSY VILNIUS 3726
RUEHRA/AMEMBASSY RIGA 1716
RUEHVEN/USMISSION USOSCE 1199
RUEHBS/USEU BRUSSELS
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
UNCLAS MINSK 000689 
 
SIPDIS 
 
SIPDIS 
 
State for EB/IFD/OIA, EB/IFD/OIA, EUR/UMB 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV KCOR BTIU PGOV AFIN BO
SUBJECT: State Dominates Banking Sector 
 
Ref: 05 Minsk 851 
 
1. Summary: Belarus has a poorly developed capital market, and the 
financial sector almost exclusively consists of banks.  The joint 
stock exchange/currency exchange lists very few companies and is 
mostly engaged in currency exchange for the government.  The 
banking sector is almost completely dominated by a few large, state- 
owned banks.  The government maintains tight control over the 
National Bank and banking sector.  The GOB uses these banks to 
provide GOB-directed lending for social projects and failing state 
enterprises.  The state then recapitalizes these banks from the 
budget.  Even so, this lending causes problems for bank liquidity. 
Commercial lending is also growing, driven by falling interest 
rates and inflation.  The National Bank has tamed inflation by 
effectively pegging the Belarusian ruble to the dollar, although 
the bank acknowledges that rising demand for foreign goods and 
travel is threatening exchange rate stability.  Foreign currency 
reserves, while growing, remain low at about one month of imports. 
End summary. 
 
 
Largest Banks State Controlled 
------------------------------ 
 
2. Belarus has 31 registered banks with total assets, as of 
September 2005, of USD 8.2 billion.  The banking sector is very 
centralized, with the six largest banks controlling 88% of the 
sector's total assets.  Five of these six systemically important 
banks are fully or majority state-owned.  The GOB controls: 
Belarusbank (assets USD 3.37 billion, 40.8% market share and 63% of 
retail deposits), Belagroprombank (USD 1.3 billion, 15.9%), 
Belpromstroibank (USD 661 million, 8%), Belinvestbank (USD 604 
million, 7.3%), and Belvnesheconombank (USD 349 million, 4.2%). 
The sixth, Priorbank (assets USD 937 million, 11.4% market share), 
is majority owned by Austria's Raiffeisen Group and minority owned 
by the GOB.    No other bank has more than two percent market 
share.  An IMF report stated that, "Due to the lack of a level 
playing field, the six largest banks are able to offer loans below 
market prices and thus crowd out their competitors from the market. 
The smaller banks have to find a niche to operate in the market. 
The non-competitive market environment and the frequently changing 
rules of the game discourage foreign investors from entering the 
market." 
 
3. The Ministry of Economics is the GOB's main player in banking, 
holding capital in 10 banks and controlling 66.2% of all banking 
capital.  Officers of the NBB told Econoff that the GOB plans to 
retain majority ownership of these large banks as the state uses 
them to implement government policy.  The EBRD told Econoff that 
even with the state playing a strong role in banking, Belarus' 
banking sector is very small for an economy of Belarus' size.  No 
bank is large enough to service Belarus' larger state-owned 
concerns, which must then work with several banks each. 
 
4. According to the National Bank of Belarus (NBB), 26 Belarusian 
banks have foreign capital, including nine which are 100% foreign 
owned.  Foreign capital makes up 9.3% of banking capital, despite a 
2005 presidential decree ordering all Belarusian banks to have at 
least 25% foreign capital (Lukashenko revoked this decree on June 
15).  Russia is the largest foreign investor, accounting for 3% of 
banking capital, followed by Austria, Germany, Poland and the U.S. 
By law branches of foreign banks are not allowed in Belarus, but 
there are 12 representational offices of foreign banks in the 
country.  Russia's Vneshtorgbank announced in late May that it is 
considering purchasing a controlling share of a Belarusian bank, 
but has not yet done so.  Belarusian banks have 11 representative 
offices, but no branches or subsidiaries, abroad. 
 
 
Lack of Independence 
-------------------- 
 
5. The NBB and largest state banks are not allowed to operate as 
independent entities.  Government officials sit on their governing 
boards and influence the banks' decisions.  Belarusbank also has a 
seat on the NBB board.  President Lukashenko can overrule or change 
any NBB decision and appoints and dismisses senior NBB officials. 
The NBB must coordinate its expenditures and investments with 
Lukashenko, as well as the Council of Ministers and the Ministry of 
Finance.  An IMF report found that this coordination in fact 
results in GOB and banking sector interference in the workings of 
the NBB, and effectively places the NBB under permanent government 
control. 
 
6. The GOB routinely gives instructions to the NBB and banking 
sector.  In February the Council of Ministers ordered Belarus' 
banks to attract at least USD one billion in foreign capital to 
lend to domestic enterprises.  The Council also ordered the banks 
to increase their lending by 29%, to BYR 2.7 trillion [USD 1.26 
billion].  In 2005 the GOB ordered certain Belarusian banks to open 
representative offices in China. 
 
7. The NBB is not exempt from the GOB's economic dictates.  Over 
the past two years the NBB has been forced to take control of 10 
bankrupt collective farms and try to make them profitable.  NBB 
chairman Pyotr Prokopovich announced in February that all 10 farms 
are now earning an average profit of 10%.  [Note: This is unlikely, 
as the GOB allows only limited reform of such farms.  More likely, 
the NBB is simply passing money to the farms to make them appear to 
be profitable.] 
 
8. This high level of state control is unlikely to end soon.  On 
June 15, Lukashenko publicly told his government, "It is necessary 
to do everything so that the banking sector will be under the 
control of the state, as this is a very important factor for the 
sovereignty and independence of the country, and so that we will be 
able to get the necessary funds for investment in our country."  At 
the same meeting Prokopovich reported to Lukashenko that 107 state- 
owned companies failed to fulfill a 2005 presidential decree 
ordering them to switch their bank accounts from private banks to 
state-controlled banks.  Prokopovich told Lukashenko the executives 
at these firms "have been punished."  Conversely, Lukashenko then 
announced the need to create equal conditions for state and private 
banks, claiming, "It is time for normal competitiveness.  It is 
necessary to stop supporting state banks so much.  They themselves 
should create favorable conditions for attracting clients." 
 
 
Directed Lending 
---------------- 
 
9. The NBB explained to Econoff that the GOB uses its four largest 
banks to finance state social programs, such as funding housing 
construction, and to provide credit at the state's direction.  The 
NBB added that the GOB also insists all banks provide money for 
state programs, even private banks.  The IMF reports these credits 
are often given to support insolvent state enterprises, causing 
solvency and liquidity problems at the lending banks.  These four 
banks provide credit on preferential terms, and the loans are often 
guaranteed by the local or central government.  These loans are 
often made in violation of GOB lending laws and with no 
consideration of risk, in which cases the GOB usually forgoes any 
corrective action against the bank.  GOB demands to lend money also 
ignore the banks' capacity to issue such loans while maintaining 
some reserve, potentially worsening the banks' financial status. 
Additionally, local governments direct local bank branches to 
provide loans to local enterprises or programs, often without the 
bank's central headquarters being made aware of the extension of 
these credits. 
 
10. Belarusbank and Belagroprombank, Belarus' two largest banks and 
both state-controlled, issue more loans than all other banks 
combined.  In 2005, Belarusbank accounted for 45.3% of all lending, 
and Belagroprombank for 18.9%.  Much of this was directed by the 
government.  Belarusbank gave out USD 420 million in loans for 
housing, of which USD 261 million was soft loans given on order of 
the GOB.  Belagroprombank issued USD 172 million in easy loans for 
housing.  The volume of such directed loans rose 75% in 2005.  In 
2005 the GOB reimbursed these banks with USD 94 million from the 
budget as compensation for these soft housing loans.  In 2005 banks 
also lent more than USD 698 million to agriculture, almost all of 
which was easy loans directed by the GOB. 
 
11. The state replenishes these banks' capital from the budget and 
from the sale of government bonds.  The IMF estimated the GOB 
spends at least one percent of GDP (roughly USD 300 million) each 
year recapitalizing its large banks.  Because of this budgetary 
support, the state also exempts Belarusbank from maintaining 
adequate reserves (other banks must maintain 4% of deposits).  The 
IMF found that this practice of directed lending causes Belarus' 
main banks to operate at a loss.  However, their financial 
reporting includes the money they receive from the budget, and so 
shows these banks as being ostensibly profitable.  EBRD reports 
that Belarusian banks tend to have low levels of profitability, 
largely because of directed lending.  By law the NBB also acts as a 
creditor of last resort and supports the liquidity of the banking 
system. 
 
 
Consumer Lending 
---------------- 
 
12. In 2005 consumer lending increased 22% to USD 6.1 billion, 
mainly to fund housing and consumption.  The NBB attributes this 
growth to decreasing inflation and dropping interest rates 
(averaging 9.4% as of December 2005).  Belarusian law requires 100% 
collateral for any loan above USD 5,000.  The law allows banks to 
accept housing as collateral, but banks generally will not accept 
housing as it is nearly impossible to foreclose after a loan goes 
into default, especially if children live in the house.  Therefore, 
while there is high demand for mortgage lending, there is little 
actual supply, according to the EBRD.  Belarus also has no law 
authorizing mortgage lending.  The NBB said banks get around this 
by relabeling such loans.  Housing cannot be used as collateral for 
a business loan.  On June 15, Lukashenko signed permission for 
banks to accept land as collateral for loans, which should increase 
the volume of lending.  The NBB claims bad loans have dropped to 
1.5% of all lending. 
 
 
Exchange Rate/ Low Foreign Currency Reserves 
-------------------------------------------- 
 
13. The NBB has stabilized the exchange rate as their main tool in 
fighting inflation.  Although the NBB denies it, the Belarusian 
ruble is effectively pegged to the U.S. dollar, having fluctuated 
less than one percent over the last two years.  The NBB claims 
instead the Belarusian ruble is loosely tied to the Russian ruble, 
although the Belarusian ruble strengthened 3% against the Russian 
ruble over the past year.  The NBB admitted to Econoff that the 
exchange rate is artificially high and is hurting exporters. 
However, they said that rationalizing the rate is a political 
decision that needs to be made at the highest level. 
 
14. In April, NBB chairman Prokopovich told the press that 
Belarusians' spending habits are making it more difficult to 
stabilize the exchange rate.  Prokopovich stated, "Unfortunately, 
the production of quality goods and services is not developed 
enough in this country and lags behind the increase in real incomes 
of the population.  The money that could remain in Belarus and work 
here, USD 400 to 500 million annually, is spent to support 
producers in other countries."  He also complained that Belarusians 
buy foreign currency to vacation and buy cars abroad (the main 
demand for foreign currency).  According to NBB statistics, 
Belarusians purchased 26% more foreign currency in the first two 
months of the year than a year prior, while they sold 11% more 
foreign currency. 
 
15. Because of this strong domestic demand for foreign currency, 
the NBB has not been successful in increasing foreign currency 
reserves.  The GOB has been trying to increase its volume of its 
reserves for some time, but with little success.  The NBB's foreign 
currency reserves in January were USD 1.384 billion, or about one 
month of imports.  Foreign currency reserves in commercial banks 
were even worse, at USD negative 323.3 million. 
 
 
Money Supply 
------------ 
 
16. Buoyed by a stable exchange rate, dropping inflation and GOB- 
mandated salary increases, ruble deposits increased over the year 
ending in May by 80% to BYR 6.2 trillion [USD 2.9 billion].  USD 
deposits are shrinking, and 70% of all deposits are now in rubles, 
up from 50% in January 2004.  Prokopovich claimed the NBB has not 
been successful in further decreasing foreign currency deposits 
because, "Belarusians trust neither the NBB nor the parliament." 
The share of long-term deposits is still low, at 20%.  The overall 
supply of rubles in the economy grew 59.5% on the year to BYR 8.6 
trillion [USD 4 billion].  In December alone, ruble money supply 
grew 13.8% after Lukashenko ordered the government to spend the 
entire budget surplus.  The NBB therefore ransferred BYR 982 
billion [USD 457 million] to he Finance Ministry, and provided 
additional funs to the main state banks as recapitalization.  The 
IMF told Econoff they predicted this massive increase in money to 
be inflationary, but the Finance Ministry and NBB acted quickly in 
the new year to remove some of this excess money from circulation. 
In January Belarus' ruble supply fell 2.8%. 
 
 
Credit Rating 
------------- 
 
17. Belarus does not have a sovereign credit rating.  Lukashenko 
ordered his government to apply for one in early 2005, but soon 
changed his mind after announcing the USG would ensure Belarus 
received a low rating.  In June 2006, Lukashenko again started 
discussing the possibility of applying for a national credit 
rating.  The NBB told Econoff that they expect Belarus to receive a 
BB+ or B-, although Prokopovich has since told the press Belarus 
should expect a low rating that would only improve with time. 
 
18. The NBB told Econoff that only four Belarusian banks have 
international credit ratings.  GOB-owned Belarusbank, 
Belagroprombank, and Belpromstroibank all have a CCC+.  Private 
Belgazprombank is rated B-. 
 
 
Banking Supervision 
------------------- 
 
19. The NBB is charged by law with regulating and supervising the 
banking sector.  However, the NBB does not have the ability to 
fully implement this oversight.  By law, banks only need to 
disclose any owners who have invested more than 10% of the bank's 
capital.  There is no legislation allowing the NBB to investigate 
whether minority shareholders, each possessing 9.9% or less, are 
working cooperatively, and legislation does not allow the NBB to 
investigate past the first level of registration to determine who 
might be the ultimate owners of banks operating in Belarus. 
 
20. Belarusian banks have not adopted international financial 
reporting standards, and do not employ appraisal of assets and 
liabilities based on fair market value.  The IMF found that many 
banks do not properly measure liquidity risk. 
 
 
Comment 
------- 
 
21. International financial institutions present in Belarus told 
Econoff that Belarus' financial sector is small and undeveloped for 
an economy of this size.  The IFIs claim that talented and 
knowledgeable people work at the mid-level in Belarus' banks and 
government.  However, interference from the top and the state's use 
of banking for political ends means that the sector is not growing 
and will likely remain distorted.  The frequent use of directed 
loans, with no regard to risk, makes the banking sector vulnerable 
to internal and external shocks.  These mid-level professionals 
have succeeded so far in limiting the worst of the damage caused by 
Lukashenko's economic meddling.  Belarus' banking and financial 
sector, though, cannot mature as long as Lukashenko uses them as a 
tool to keep himself in power. 
 
KROL