economic problems the euro zone would also note that the russian economy. hello mr look i thank you very much for coming welcome thank you i well first question considers a statement by the u.s. federal reserve chairman ben bernanke he who addressed the congress saying a quote if you fail to raise the u.s. debt ceiling by august the second the economic fallout could be catastrophic and quote according to your previous statements you don't believe that the u.s. may default on its debt what's your confidence based on. that in a speech if. you see this is quite a bit of both in making your way of course a legal legal framework up to august second that should be somehow solved.

and now both sides suddenly republicans democrats are doing their best you know and somehow we in this game this absolutely clear but i myself do not think that's practically they will not be positioned to come to some agreement probably agreement i mean two or is the that. cut off why not so high. asking about but for some compromise. a compromise a lie just to win the time probably could be the real compromise but so i would say that the chances to not have it is very close to zero but if even they'll be a kind of non agreement it means that for the government of united states it should be a choice what the expenses could be cut it could be the debt service and expenses but. could be some other expenses one more political choice and the

last and last but not least point that what is meant technical default it means that some just one obligations will not be fulfilled in time. it could take place but i don't think it really will influence the magically markets. to influence for some limited scale but not to magically anything the united states may inflate the dollar in order to decrease its debt. that is the point so let's short on this is the technical problem i believe it will somehow be solved in law and not technical a political problem in the united states have two big deficits fiscal deficit and deficit of that balance both have some correlations with the exchange rate of the

currency of the dollar and a k d investment in a little canal dickel will. would wise you if you have seen the difficulties with pain and service in your debt you can inflate it if you have you know monetary agence if. this is the way and historically we know that some countries were doing that so inflation for a different period of time. can help in that case but in economy have to have in mind two points stocks and flaws. you can solve the problem of stocks with inflation but what about floats if you. have the same level of fiscal deficit it means that you inflate it stocks but you created new stocks we have the floats of fiscal so anyway even in this

situation deflation the fiscal authorities have to make the serious steps of fiscal adjustment side so speaking about the probability of default well what about countries like greece or say portugal are they closer to default than the is much closer it has problems of course. it it's much more realistic. or all the development of this creation in that countries not only technical about some kind of. political economical default i mean interest that. it's dangerous but it could could be managed what do i mean by a managed it's not just i will not pay my debt is me as you know the problem a country will talk with my creditors about the solution of what could be the solution some kind of arising on the debt exchange of my obligation to some other

obligations the better conditions with some clear cut it means that their creditors will lose some money but just some ten percent fifteen percent twenty percent that is the point of discussion of it so it's a lot of countries a lot including russia. you know but by that situation and after that they have some chances for recovery for new developments some of them use the chances and got. better targets than before people today start talking about withdrawal of some of the countries from the euro zone like greece resemble do you believe this is possible from its quiet on realistic and usual social economical way it would be this is politically i do not think that the euro system the euro zone will be so isn't the divide it into pieces

a lot of rumors about that about so-called core europe benefic europe about possibility of divided in north and south of france and so for but i do think it's only or more political it's out of this if you don't really believe in defaults and if you if you say if you do believe that they can be managed as you put it isn't it time to buy the bonds of these countries that are rated very little today. that that is the business business points about it about that. business analytics so in our practice. with not the you know focused on the tone of august more on liquidity and safety of. ok now with the u.s. dollar and you wrote rates falling maybe we see a situation when the russians central bank has to devalue the ruble to keep

russia's economy competitive. because first it's very difficult point and both you and your you know develop it into time. and one by one that's it's very difficult for us and that means that all the commodities of the process of all the commodities will. arise probably rise dramatically this is the first point the second point. we. will pursue the policy of inflation targeting and free floating of the. problem it's not the pure free float it but we are very close to it it means we do not support this so that. the rate of exchange of the rubble not in nominal know in real terms and that we will not be in

a position to devalue value of the car so this is very much dependent on the market market for service of the correlation between supply and demand so believe in market and we pursue the flexible. policy so strong ruble for use not a problem. not a lot of speculations about that but i never. see. any political and statistical is good. drops about about that today the share of bank lending of total investment into. the real economy in russia is at seven percent why don't rush and boeing stick more active pouring in the investing process why why is credit in russia so so so expensive i mean it's one of the most expensive and developed countries. two to two points the price and the amount the price the credit the suspense of but of course

it's very much depends on the inflation. you when you lend money to somebody you have to fund it or you have to get some money money from somebody or you pay the deposit rate and somebody pay your credit and there's margin the credit rating that was a trait that is the background for your financial return it means credit in any case credit price couldn't be cheaper the deposit price and the present buy is very much depend on the new place and the people will not give you money if you will pay them less of that inflation so that is very much the problem that is the reason for us to be very much concentrated focused on the on the inflation so. as soon as we will be in a position to cut inflation think about seven percent in perspective for two three

years about five percent and that of the particle at the much equally the credit. go into the other part of the story is the amount how big could be learned not there are a lot of liquidity globally and in the russia also but the they increase lending but the rates of of. of this increase is not that high so it's not very fast now it's around sixteen seventeen percent year to year in june to june so on sixteen percent increase in nominal terms and therefore i myself comfortable with that figure says see first deputy head of the russian central bank spotlight who will eventually have to hold great day with us and will.

wealthy british style. markets. come to. find out what's really happening to the global economy with max concert for a no holds barred look at the global financial headlines kinds a report. welcome

back to spotlight algal love and just a reminder that my guest in the studio today is alex to look at if the first deputy head of the russian central bank recently kind of you mentioned inflation mentioned seven percent this year well it's a very interesting thing the inflation is seven percent and this is this is the the forecast for lation this year it may be are it won't be lowered but the average deposit rate is six percent so it's lower than the inflation rate doesn't this discourage people to bring their money to bearings. first the seven percent is of focus target and will have to work very hard to get it then.

the then the comparator the inflation and deposit rates we should have in mind that would be the expected inflation not today but expected inflation because the deposits were for three months six months up to free years normally so in that case we have to compare that position if we really believe in free space for two years inflation will be five percent it means that six for one deposits not bad that is thought one yes up to now have negative. negative for rate four for you pauses in real terms. but that is very much the same as all over the wall unfortunately now the period of very low global the law or rates because of the crisis of course and now have to pass by the long

way of recovery after that after the motivation for all the greats so i think that keeping in mind these three points now the rate of deposits the smallest comfortable and the reflection of this conflict ability is the day nomic of duport . so both households and companies in the banks then grow in rather fast. yes this year two thousand and eleven it's not so fast as the falls and it's because people begin to spend money you know buying goods and services there now not so much afraid about the future as in the previous crisis time you said that you're a. seven percent inflation id end of the year. in the first six months of the year the inflation has already reached five percent so are you sure that in the that in the remaining five months or so it will be two. now more than before because five for the you know it's

a brilliant it's very good result i'm a so forth it could be around five point two. you see that is seasonal very much seasonal phenomena so normally in the russian economy the first model for the year generally got your own thirty percent of all the yield inflation really what happened because i think if you will celebrate the new year away because of two friends first all the tariffs for for electricity gas water supply and doubtless you know change transform once a year general frost so it's a big jump in prices first and the second here yes because there are a lot of one losses. before before christmas before the year and they spend money actively in january so it's quite understandable but the fourth

quarter the normal the spirit of very low inflation partly sometimes is zero inflation and when there's inflation i myself personally believe that accumulated this five percent for six months will have not more than zero point five zero zero . several next three months july was so up to the beginning of the fourth quarter of the year we'll have not more than the five point five and we still have about one point five percent for. three months so the surrealistic are listed as well but the government the russian government seems to be more pessimistic than you because they expect seven point five percent is it because is it because the pre-election time because they have planned some government spending is for the campaign or whatever you say for us i believe the government will fulfill the budget without any you'll be expanded if even they will spend some additional

money in not on that additional money supply will not influence the listicle it will not influence the this year inflation it will influence next year the house and. ok this is the second point then the third point the wind there they changed the their focus i mean in the have very difficult for what are the great information pressure a lot of inflation expectations this year and probably the government analytics to do much sensitive to this to this very situation and they change their focus. russia is planning to introduce it's still national payments system which which sounds strange but because the whole world lives in these. master characters press and they're happy with that what does russia need is some payment system and would be competitive it's very sophisticated problem first i don't think that when

you have your national system it doesn't mean the you do not use the other systems . of course. people will use a visit must like. everything going to the wall. yeah but for some reason so half hour probably. facility here i mean network for arson banks and companies and households to organize to manage their permanent settlements in the way they're going to have it so and plus that is a business if somebody believe in the business and invest in it the that's ok that's ok because it will be the business of some banks including. of the big banks that position but these but these existing payments system is reason to press their international i mean they're the truly international they don't belong to

a country anymore i mean they belong to the world in the euro and our banks are members of the system and they will get them out of us it's absolutely different points you know but it's a patient and wall systems and you know some provide enough your own system works together well what you're saying about this national payment system does it imply that it will give better possibilities some some good deals some better deals still to the clients that these are probably yes versus the question mostly to the banks themselves but i believe they have some position to probably do to have better prices for four for sources than the sun so to compete with in the country do you expect this russian these are to be accepted by major banks around the world and in a matter of time well why not why not if you will will work hard to get some results why not it will need

a major advertising campaign of course of course billions into this project is the ok and now the central bank is currently bailing out the bank of moscow with a john sum of two hundred. ninety five billion rubles why is it necessary why don't let the bank of moscow done because this may be bad example for other russian banks were is an exceptional situation of course the us something like more than that ration like in any situation of a nation of banks. but you see there has the problem of so-called to big to fail or to important to all in the wall during member this additional women brothers the great crisis began after that then they i mean fat decided not to support the threat to call it was a good reaction but practically it was followed by the very dramatic development of

the situation so now all they're glad to skip in might this point ok bank of moscow is too big for a little bit to fail this is number five in russian bank and system and it considered it more than one hundred and thirty billion deposits of households anyway there are guarantees that the system will have a special deposit guarantee religious lation deposit guarantee. see in russia so it could be paid in a way plus some government affiliated companies and institution and it specially a municipality visions of moscow keep their money then the bank of mosco also and the amount of money is also very big even bigger than the household deposits so that has a risk for that money too if we keep all the risks which can be materialized in

that the development of the situation with. have to find some some balance so that if you say so put him in the bank of moscow why were the flaws in the system discovered so late it is is there it is there problems in the super. it's an ability of the central bank so i mean it's a long long story. of it talked just didn't. want to talk with you but there are considerations different problem this is most of all the problem of the management previous management of the battery. and a lot of. some very specific operation provided in the interest of the top managers and the have the open side to the bad and close to the bad but it could be. information from that clause so a lot of the problem the system is it i know it but this problem this is a trust is a problem of management such

a law so you know working on it you know you are working on that is the only proving that the sec of this is a problem of the system and now we will have some mom from the president of the russian federation for us to make some proposals and much of the change will be done. before very briefly i believe if the central bank of russia as a regulator supervised have not their rights have to have it's much lesser than the rights of other waste in the walled i mean to against the onus against the managers of the bad banks i mean to make some specific decisions professional professional in the divided decision about that so there are a lot of good practice in the ward and we'll have to fall though all this good practice thank you thank you very much for being with us and just to remind you that my guest on the show was i like see where you kind first deputy head of the

russian central bank spotlight will be back with more for us than carmen thought it was really going in and out of time until then they are party and take it it that's .

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time it's a face the music outraged britain watches closely is the murdoch media being grilled by phone hacking bribery claims and these pictures that we're seeing from the hearing taking place and all of them and right now. israeli come on days take ship carrying profound. goals of war to get another attempt to break the sea blockade of the region. and a meeting between the need is a rusher and germany how is. growing on the energy and. cool. future of the euro as he meets in germany.

a very warm welcome to you this is r.t. live from moscow now today's afternoon television in britain is a must see for most of the country as rupert murdoch his son and besieged former u.k. c.e.o. face angry lawmakers live the trio's of parliament to question to answer questions on the phone hacking and police bribery claims the now axed news of the world lot is lower and it's following the hearing for us in london let's cross to her live now along with those huge interest in all this was rupert murdoch himself appearing in attendance what have we heard so far from that hearing. there is huge interest in it and we are seeing. the murdoch being interviewed by m.p.'s together we

should remember that they were invited to appear at this hearing and they certainly said no thank you very much an initially and then in the end they had to be summoned to appear before the hearing and they are being asked some tricky questions by m.p.'s which is what the public wanted they didn't want to get a grilling but they wanted them to be are some tricky questions they're being asked what they knew about the phone hacking scandal at the news of the world at the time that it was taking place they're being asked what they knew about alleged payments to police by journalists working for them james specifically is being asked why he approved payouts in relation to phone hacking to celebrities whose phones have been hacked when he by his own admission says that he didn't have a full picture of what was going on in those in that publication also being asked and trying to ascertain whether there was a cover up whether parliament and police work.