Moody's puts negative outlook on Russia banking system

Moody's changed its outlook of the Russian banking system to negative from stable due to a weak global recovery and market volatility that has helped cause a jump in investor capital flight. The global rating agency also said Russian growth in 2012 would slow to 2.8 percent of gross domestic product, from 3.8 percent growth estimated for 2011.
"Global financial market volatility, reduced access to wholesale funding, continued capital flight and downward pressure on the rouble, have already led to a liquidity squeeze in the Russian banking system," said Moody's vice-president Eugene Tarzimanov. Russia earlier this month reported a capital flight of $49.3 billion through the end of September - three times the $16 billion recorded one year ago. The agency said state support remained a strong feature of the Russia banking sector and stressed that it was still keeping a stable outlook on 91 percent of individual banks rated by Moody's.