Moscow - Russian President Dmitry Medvedev on Tuesday summoned the head of the country's state banks to the Kremlin after Russia's leading indexes free fell in the sharpest decline since their inception. The start of trading was delayed until the afternoon on Moscow's RTS and MICEX exchanges following a 19 per cent dive in stocks Monday.
The Kremlin has pledged over 150 billion dollars in loans to banks and small lenders to stave off its worst financial crisis since national debt default in 1998.
Deputy Economy Minister Andrei Klepach said on Tuesday that authorities may announced a new rescue package after the Kremlin meeting attended by the heads of Russia's largest banks, VTB, Gazprombank, Sberbank and central bank chairman Sergei Ignatyev.
"A number of measures will be announced soon that are not only geared at supporting the financial system but also at making this money work in the economy - that means benefiting not only big banks, but also second and third tier banks ... It is important now that there be no credit squeeze," Klepach was quoted by news agency Interfax as saying.
In a video posted on the Kremlin's website earlier Tuesday, Medvedev urged international action to fight the jolting financial crisis, saying he hoped for such a response to emerged from talks with European leaders in Evian, France on Thursday.
"The crisis in the international financial system demands urgent joint action. It is obvious that the time has come for new decisions," Medvedev said.
The statement was made almost in tandem with news that Russia would give a 4 billion euro (5.4 billion dollars) loan to save Iceland floundering economy over four years.
Russia's own markets has dropped dramatically along with world markets on Monday.
The dollar-denominated RTS closed at 866.39 points, down 19.1 per cent on Monday its steepest dive in its 13-year history, while the MICEX fell 18.66 per cent to 752 points.
Monolith Sberbank dropped as much as 22 per cent, while the country's largest company, state-owned oil giant Gazprom fell 19 per cent on Monday.
The RTS lost 62 per cent from its all time high in May as oil fell to 90 dollars per barrel and amid capital flight over political uncertainties after Russia's mid-August war with Georgia.
