Fixed Income. Otkritie FC Bank - Foreclosure of a Dream
In something of a denouement after a summer of severe pressure on Otkritie FC Bank's liquidity and intense speculation about its financial standing, the CBR announced late yesterday that it was launching a rehabilitation of the bank. The mechanism chosen was the newly established CBR-led Banking Sector Consolidation Fund (BSCF), whereby the regulator will take full oversight of the rehabilitation process. Given the tools currently at its disposal and the size of the crippled bank, the CBR was left with no choice but to rehabilitate the bank through the nascent BSCF. Based on the CBR's announcement and interviews with CBR First Deputy Chairman Dmitry Tulin and Deputy Chairman Vasily Pozdyshev, we summarize in this note what we know so far and examine the implications for debtholders and the banking sector at large.
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