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Erste Group chairman convinced: There is no alternative to sanctions against Russia – Erste Group shares drop by double digits |  3/7/22

Erste Group chairman convinced: There is no alternative to sanctions against Russia – Erste Group shares drop by double digits | 3/7/22

The head of Erste Group, Bernd Spalt, sees no alternative to the anti-Russian sanctions regime, and says about the impact on the population: “They have gotten poorer from year to year because the Russian economic model has not worked.”

He told The Standard newspaper that the fact that Austrian deposit insurance was accountable to Russia’s Vienna-based Sberbank Europe was “very unsatisfactory” and high inflation would continue for a long time.

Deposit guarantee companies, which include Raiffeisen and savings banks as well as Erste, are responsible for Sberbank Europe in the amount of €913 million. “First of all, about 230 million euros will come from our deposit fund. However, if there are bankruptcy proceedings, there will be returns from the realization of Sberbank’s assets. So it is not yet possible to determine what cost will ultimately cost us all,” said Spalt.

Deposit insurance “tools” must be completely reorganized. “Obviously deposits have to be protected, but this requires a clear system and strict early warning systems that every bank has to comply with, so that they can intervene in time – before someone hits the wall. It is about revealing the details, for example and the rules of what happens. If the member does not meet the requirements.”

Regarding the ECB’s interest rate policy, Spalt said: “I think the ECB will take the first interest rate steps only shortly before the end of the year. Inflation will stay with us for a longer time.”

Shares of Erste Group temporarily fell 10.82% to 24.49 euros in Vienna.

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