Medvedev Urges Calm in Russian Market Crisis

With stocks off big, bank chief warns of lack of liquidity

By Harry Kimball, Newser Staff

Posted Sep 11, 2008 4:40 PM CDT

(Newser) – The Russian economy is skidding, and its leaders are giving somewhat contradictory messages, the AP reports. Shortly after President Dmitry Medvedev assured the public today that stock-market troubles don’t “reflect the actual state of the economy,” the chairman of the country’s central bank said “as far as liquidity is concerned, there is some shortfall in the banking sector.”

Russia’s top stock exchanges have both dropped almost 15% since the week started. Medvedev has been on TV twice in two days trying to settle worries over continued stagnation. For his part, Sergei Ignatyev, the reserve chairman, said his organization is more than capable of helping out the struggling banks. Falling oil prices have fueled this crisis; Russia is the world’s No. 2 exporter.

[Images (3)]

[Quotes (2)]

Russian President Dmitry Medvedev speaks at a meeting on economic issues in Moscow today. (AP Photo)

The auction of Yukos assets last year. (AP Photo)

A currency exchange in Russia. (Getty Images)

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Current liquidity included highly liquid assets they could exchange quickly for cash, which depends on the market. The market has crashed, hence the highly liquid funds the banks hold are not so liquid. - Richard Hainsworth, Rusrating

What you see now is a full-fledged panic. We are in a situation now where the authorities ... have to convince investors that it's worth investing in Russia. Just to say that the state has enough money is not enough. - Michael Ganske, Commerzbank

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Medvedev Urges Calm in Russian Market Crisis