Russia makes record bank bail-out

1 July 2011 Last updated at 22:04 GMT The bank's erstwhile head, Andrei Borodin, has fled the country Russia's fifth largest bank, Bank of Moscow, has been given the biggest bail-out in Russian history.

The $14bn rescue came after another bank, VTB, gained control through a hostile bid, only to uncover bad loans valued at $9bn - a third of the bank's assets.

Bank of Moscow's former head, Andrei Borodin, has fled the country, and a warrant has been issued for his arrest.

The bank was used by ex-Moscow Mayor Yuri Luzhkov to fund property projects.

'Fraudulent lending'

Mr Luzhkov was sacked by Russian President Dmitry Medvedev last year.

In a statement issued in London, Mr Borodin said he was shocked at the size of the bail-out, and claimed that VTB's takeover of the bank was politically motivated.

VTB, for its part, accused Bank of Moscow of committing "fraudulent lending" under Mr Borodin's control, while Russian Finance Minister Alexei Kudrin has called for a criminal investigation.

Under the rescue deal, the Russian central bank will provide a 295bn rouble ($10.6bn) 10-year loan at a negligible interest rate to Bank of Moscow.

Meanwhile, VTB will invest a further 100bn roubles to recapitalise the bank - taking its ownership share from 46% to 75%, enough to qualify for state aid.

VTB, Russia's second-biggest lender, had itself to be rescued by the Russian state to the tune of $6.4bn during the financial crisis.

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Irish bail-out minister Lenihan dies

10 June 2011 Last updated at 10:41 GMT Brian Lenihan had been suffering from pancreatic cancer since the end of 2009 Former Irish finance minister Brian Lenihan has died at the age of 52.

Mr Lenihan, who was suffering from pancreatic cancer, was a member of the Fianna Fail opposition party.

As finance minister, he agreed the 100% bank guarantee and signed the bail-out deal with the IMF, the European Union and the European Central Bank.

He was a member of a political dynasty with his father Brian, his brother Conor, and his aunt Mary O'Rourke all serving in Irish governments.

Mr Lenihan had been fighting cancer since December 2009.

He had undergone intensive chemotherapy and radiotherapy treatment at the Mater Hospital in Dublin.

He had served as minister for justice and as the minister for children in previous Fianna Fail administrations.

Continue reading the main story Jim Fitzpatrick Economics and business editor

No finance minister in the history of the Irish state had ever experienced an economic crisis of the magnitude that confronted Brian Lenihan in 2008.

Because of the collapse in the global property market and the ridiculous amounts the Irish banks had lent, they were effectively bankrupt.

Mr Lenihan had to find a way of preventing the Irish economy simply collapsing. He chose to guarantee the deposits of all Irish banks, thereby also underwriting their huge debts.

It was a move supported by all major parties in the Republic. But it was a step into the unknown that has left Irish taxpayers burdened by unprecedented debt that may yet prove too costly to repay.

His legacy will be forever tied to that decision and its consequences which continue to define Ireland's current economic plight.

Since Fianna Fail left government in March, he had continued to act as Fianna Fail finance spokesperson.

He is survived by his wife and two children.

The Irish prime minister Enda Kenny said Mr Lenihan had been exemplary in carrying out his public duties.

"He exemplified a great sense of humanity in the public representation he gave.

"I'd like to say I've known Brian Lenihan for many years and regard him as a friend in politics."

Mrs O'Rourke told Irish state broadcaster RTE: "It's all over. It's kind of unbelievable.

"He always worked for his country and he worked for the best of Ireland and I suppose in the end what anybody in public life would wish to do, and that's what he did.

"I just feel my life has almost ended, I really do."

Fianna Fail leader Micheal Martin said he was "deeply saddened" by Mr Lenihan's death.

"Brian has fought a brave and courageous battle with a serious illness over the past 18 months," he added.

"In all of this time, Brian never once flinched from his public duties and he showed an unceasing and untiring commitment to tackling the economic crisis facing this country."

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Belarus 'to get Russian bail-out'

19 May 2011 Last updated at 17:05 GMT Vladimir Putin (left) met his Belarusian counterpart, Mikhail Myasnikovich A Russian-backed $3bn (?1.8bn; 2.1bn euros) loan has been agreed for Belarus, the struggling ex-Soviet republic's prime minister has said.

There was no immediate confirmation from Russia, whose powerful prime minister, Vladimir Putin, has been visiting the capital Minsk.

Analysts predict conditions for any bail-out will be stringent.

It is believed that Russia is seeking the privatisation of key assets in the Soviet-style Belarusian economy.

A currency crisis is currently gripping Belarus, eroding rouble savings and causing a shortage of imported goods such as medicines.

Russia is one of the country's few allies while its authoritarian political system under President Alexander Lukashenko has estranged it from the West.

Three-year term

Prime Minister Mikhail Myasnikovich said conditions had been agreed to provide a crisis loan of $3bn-$3.5bn over three years at a below-market interest rate.

It would be released, he said, through the Eurasian Economic Community, a six-nation group led by Russia.

Mr Myasnikovich suggested the loan had been linked to reform of the Belarusian economy.

Moscow is said to have its eye on Belarusian assets, including oil refineries, the gas pipeline system, the main mobile phone provider and the potash production complex.

Russia already subsidises the Belarusian economy in exchange for it smoothly delivering Russian oil to Europe.

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