The article by the leading expert of the Control Department of the President of the Russian Federation, the NII KPU expert Sergey Lutsenko “Liberal banking legislation harms the state’s economic health” in the journal “Modern Law” (No. 11’2018) is commended by the Federal Financial Monitoring Service.

The author considers the legal gaps in the current banking legislation of the Russian Federation, causing the emergence of threats to the interests of creditors and depositors. Based on an analysis of the jurisprudence of the European Court of Human Rights and Russian courts, a structural deficiency in Russian banking legislation is identified, associated with the wide discretion of credit institution management when making decisions regarding the formation of loan reserves based on the level of risk. A separate omission of the legislator and the Central Bank of the Russian Federation is the formation of a reserve for loans based on professional judgment (judgment of a subjective nature) about the level of credit risk, which may cause significant distortions in the reporting indicators of a credit institution.

Read the full article in Expert Library NII KPU.