Resolution mechanism for NPFs to be established
The Bank of Russia will be entitled to apply a resolution mechanism to prevent the bankruptcy of non-governmental pension funds (NPFs) where their exit from the market may entail social tension or systemic problems in the pension market at both the federal and regional levels. This draft law was approved by the State Duma on 6 April in the second reading.
‘The NPF resolution procedure will be similar to the existing mechanisms effective for banks and insurers. The Bank of Russia will get a preventive tool to ensure the continuity of NPFs’ operation and mitigate adverse consequences for the customers of not only NPFs themselves, but other market participants as well. NPFs may possess significant assets and liabilities and often join financial groups. Therefore, such a mechanism will help us prevent the contagion effect’, Deputy Governor of the Bank of Russia Vladimir Chistyukhin believes.