Europe’s largest asset manager and other bondholders aren’t buying a pledge from Russian policy makers that they’ll quell a growing crisis in the banking sector.
The bailout of the country’s second-biggest private lender did nothing to entice Amundi Asset Management and Erste Asset Management who are bracing for more bad news from some of the worst performers in emerging markets this month. Dollar bonds of Bank Otkritie FC jumped from distressed levels after the announcement on Tuesday.
Otkritie had been experiencing deposit outflows since June and became the first systemically important Russian bank to be seized by the state in a purge that has seen one in three lenders lose their licenses since 2014. While the regulator said Otkritie will continue to meet its obligations, holders of subordinated debt may still be exposed to losses if capital levels fall.
The central bank said it was preparing emergency liquidity measures for other lenders to prevent panic from spreading.
Source: Bloomberg Pro Terminal
Trader Bozhidar Arabadzhiev
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