Bloomberg: "Russia May Face Financial Crisis Within a Year"

There are reports suggesting that Russia could face a financial crisis within the next year.

Bloomberg reported on the 26th (local time) that "according to Russian banking authorities, the outlook for the Russian economy is far bleaker than known," adding that "there is a risk of a systemic banking crisis occurring within the next 12 months."

Bloomberg focused on the financial status of Russian banks. Bloomberg stated, "Concerns among Russian banks are mounting over deteriorating asset quality, especially the increasing balance of overdue loans." It continued, "Russian banks are currently burdened with non-performing loans (NPLs) worth trillions of rubles," and added, "People familiar with the internal situation (in the banking sector) said that early signs of a credit crunch caused by debt are emerging."

If the war between Russia and Ukraine continues, the likelihood of a financial crisis becomes even greater. Bloomberg noted, "The European Union (EU) is currently discussing additional sanctions on Russian banks," and "If the United States and Europe strengthen their financial sanctions against Russia, the impact could expand." Furthermore, "Former and current Russian financial officials expressed concerns that if the (economic) situation does not improve, there is an increasing risk that a debt crisis could spread throughout the Russian financial system within a year."