Bid into reality

Russia has deployed a real fight for lower rates on loans. The victory of the supporters of the low rate will not bring the citizens of happiness or affordable housing.

The Central Bank of superstition

"With such rates, the economy can not grow," - said in a recent head of Sberbank German Gref. However, to the friendly chorus of critics "unduly harsh policies of the Central Bank," he joined not one hundred percent. "In my opinion, in terms of the dynamics of inflationary rates may be lower, and I hope that there will be less" - as an experienced apparatchik, he knows where and how to make a reservation to avoid being branded as a stranger in any of the warring camps.

The long-term lobbyist easing of monetary policy billionaire Oleg Deripaska at the Davos forum was indignant: "The stakes are the highest, tall level, economic actors have access to financial resources is missing ... We have created a situation where the borrower wants to quickly return the money to the bank, because it can not provide a rate of return that would provide interest. And we therefore squeeze economic growth by reducing investment ... They (the Central Bank. - "Money") is not notice, continue to mumble some platitudes their superstitions tsentralnobankovskie. "

Against "superstition" acts and adviser to President Vladimir Putin, Academician Sergei Glazyev. In his opinion, the Central Bank refinancing rate should fall to at least 4%. "In this case, the conditions for the decline in the market interest rate for borrowers to 6-7%, which corresponds to the average profitability in the manufacturing and construction", - he said.

Listen to the chorus and the Prime Minister Medvedev, although his position is still more cautious. "The availability of credit, of course, the main condition of the technological modernization. Industry and Infrastructure, of course, need to be low-cost and long-term resources - is crucial for the implementation of major investment projects. And of course, maintaining macroeconomic stability and continuing the fight against inflation, we must not forget the challenges of development, further problems of so-called non-oil growth ... a serious problem, which they say almost everything, there remains a gap between the price of the loan, which is acceptable to the borrower, and the price offered by the lender, then there is a bank, "- he said 4 March meeting of the banking business.

"Blue", as usual, opposed the "hawks." Last in the minority and can withstand the onslaught is not without difficulty. First deputy chairman Alexei Ulyukayev said that "the easing of monetary policy in the form of lower interest rates will not lead to higher economic growth." Moreover, in his view, "in such a situation to give cheap money - is a crime against business, the people, because that way provoked the accumulation of risks that tend to materialize."

In Ulyukayev, however, there were supporters, he may, in the current reality does not like to have. According to analysts authoritative American investment bank Goldman Sachs, reducing core inflation due to seasonal strengthening of the ruble. Without this factor, by July 2013 inflation will rise again to the level of September 2012-th, and in 2014, the Central Bank will have to raise rates. He pointed to the risk of inflation and the ex-Minister of Finance, Head of the "Committee of Civil Initiatives" Alexei Kudrin. He warned that inflation in Russia could return to the growth rates of up to 15%. In February, it was 7.3%.

"Hawks" follow classical logic: the lending rate can not drop significantly until the fall inflation (the first component of the price of credit) and the risks of the borrower (the second component). "Pigeons", true, compare rates with western Russia: there central banks for several years, kept base rates below inflation.

The comparison, however, is evil. The dramatic easing in monetary policy - an emergency measure, applicable only to the economy which is in deep crisis, with high unemployment, high debt load of population and business and the threat of deflation. It is like chemotherapy: it helps in difficult situations, but it has serious side effects, and to apply it to more or less healthy person is not recommended. Russian "blue" for some reason thought it would be good if we apply to our economy measures that are appropriate for an entirely different picture of the macroeconomic inflation and unemployment.

Comparison with the West is not serious yet because that afford lower rate can only upscale borrower fully trusted lenders. Ten-year government bonds in Germany and the U.S. traded with a yield of less than 2% per annum. Russian OFZ yield of ten-year - 7%.

Greed drives the world

It is worth to mention the third component of the cost of credit - the greed of bankers. And not only bankers, but in general all donors capital. Mouthpiece of the aforementioned Deripaska, the magazine "Expert", so furious at stavochnoy war, he found guilty, even among the "greedy investors, all risks are covered for some reason indiscriminately welfare state deposit insurance system." And another quote: "The populist format of the current system of deposit insurance, relieving the investor of the need to analyze and to assume the risks of the bank-depositor indulges this debauchery."

We have to recall that the deposit insurance system exists not only in Russia, which is a common mechanism to ensure the stability of the banking system itself in case of panic attacks and depositors to banks. And by the standards of civilized countries guaranteed deposit amount is very small.

In addition, from the point of view of economic theory the current deposit rate (9.97% - the maximum interest rate for the ten largest banks in the end of February) is quite adequate. This is just inflation plus real growth of GDP, which provide a fair share of the economy proceeds between donors and recipients of capital. All the rest - it is an attempt to get into the pocket of thrifty and frugal citizens hoarding their old age in the absence of any hope for the pension system, and shift the money into the pocket of the borrowers.

The thesis of the greed of bankers does not stand the test of facts. According to Central Bank data, the weighted average interest rate on Interbank deposits of physical persons for a period of over a year in rubles of 8.5% per annum, and to credit institutions - 9.2%. Smaller private banks are higher. If the liabilities are so expensive, why should cheap assets?

Instruments of state regulation

Make credit available could state banks, primarily Sberbank. That in addition to the more commercial functions they perform and social functions. Fans look back on the experience of Chinese friends and not have to remind you that this system is in China for decades to direct financial resources for infrastructure and industrial projects, turning a blind eye to all sorts of risks.

In Russia, the state-owned banks have made a short-term priority and high-crediting, and not hassle with the industry, which needs cheap and long-term money. In 2012, the loan portfolio Savings individuals was 42.2%, higher than the market average 39.4%, while the growth of credit to enterprises - 15.8%. And the portfolio of loans to individuals for up to six months increased 2.5 times, to 139.4%.

And anyway, how accurately noted columnist portal banki Igor Moiseyev, imbalance, Medvedev noted, "entirely" made "the top five largest banks - Sberbank, VTB, Gazprombank, Rosselkhozbank and VTB 24".

However, the other day Savings "suddenly" remembered his social role. Just in time for the meeting with Medvedev on March 1, rates on mortgages and car loans are reduced by one percentage point, which is partly offset by the recent rise. A March 4, abolished fees for loans to small businesses.

Mortgage illusion

Reduced rates on mortgages - an old idea and Premier Medvedev and President Putin. In the midst of campaign promises called different numbers, up to 3-4% per annum, then, however, the leadership of the country have changed his mind and began to talk about 5-6.5%.

Lowering mortgage rates and the abolition of commissions on loans for small business - a clear nod in the direction of the State Savings Bank policies. No more. Discount of 12% per annum on the need, say, ten years, monthly pay of about 90 thousand rubles. for a modest "odnushku" on the outskirts of the capital most Muscovites nothing but mockery, seem impossible.

Especially since the cost of credit is not the best way to solve the housing problem. The lower the rate, the more borrowers will qualify for a loan. The more borrowers, the higher the price, the less affordable housing.

Important disclaimer: this is true for inelastic supply, but more on that shortly. First, it is worth recalling that the rake of low rates had already come to the West, an example of which is so dear to monetary "doves", supporters of cheap credit at any price. Former IMF chief economist Raghuram Rajan said that one of the causes of the mortgage crisis in the U.S. has become the concentration of the U.S. authorities are not on the income of the population, and on credit. 'Policy response to the growing inequality has been increasing lending families, particularly low-income, - he writes. - Benefits in the form of rising consumption and create more jobs instant, and payment of debts can be deferred to the future. "

Simply put, if the government really care about affordable housing, but not for long-term stream of windfall profits from state-owned banks will be provided in the beyond mortgage rates, should pay attention to two things. First, the growth of real income, and secondly, on the supply side. And if we consider as an instrument of state policy Sberbank, the lower rates will not mortgage holders, and builders.

And then, perhaps, be able to perform other tasks, which is always behind the scenes housing, - run multiplier stimulate chain multiple industries. That's just to make it happen, will finally put the horse before the cart: pay inflation, remove administrative barriers to deal with corruption, put the state at the service of society. All this, Vladimir Putin promised in the first presidential address - almost 13 years ago

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