Address by the Chairman
of the Board of Directors

Dear colleagues,
ladies and gentlemen,

To your attention we present the Annual report of the state corporation "Deposit Insurance Agency" for the year 2008. In the report you will find a detailed analysis of the Agency's operation in the reporting period. Three significant for the Russian banking system areas of the Agency's activity are emphasized: ensuring stable functioning of the deposit insurance system, performing functions of the corporate bankruptcy trustee (liquidator) of failed credit institutions and taking measures for prevention of bank bankruptcies.

In the reporting year smooth functioning of the deposit insurance system contributed to stabilization of household bank savings market. In October 2008 the deposit insurance coverage limit was substantially increased – from 400 thousand rubles to 700 thousand rubles. At the same time there was eased financial burden on banks – the rate of quarterly premiums to be paid by them to the mandatory deposit insurance fund was decreased from 0.13 to 0.1 percent.

Liquidation proceedings executed by the Agency were aimed at maximum possible satisfaction of claims of creditors of insolvent banks. Effective measures were taken for liquidation of assets, maintaining and increasing their market value. A set of actions for identification and challenging suspicious transactions of banks were taken as well as for bringing to account of persons whose actions caused bank bankruptcy.

The most important area of the Agency's activity in financial crisis time is its participation in measures aimed at prevention of bank bankruptcies. The necessary powers and resources – government contribution from the federal budget (200 billion rubles) and the Bank of Russia loans – were granted to the Agency in accordance with the Federal law "On additional measures to strengthen banking system stability for the period through December 31, 2011" which was enacted in October, 2008. In the reporting year the Agency based on proposals of the Bank of Russia started to implement procedures for prevention of bankruptcy in relation to 15 banks. Notably, from the very beginning, involvement of interested private investors in problem bank rehabilitation was taken as the basic principle. For these purposes the Agency allocated 108 billion rubles. The practice demonstrates effectiveness of measures being taken by the Agency and their positive effect on the overall condition of the banking system.

The Agency's experience in protection of rights and legitimate interests of bank depositors, strengthening of the national banking system and increasing confidence in it is worth attentive study. I hope this Annual report will allow its readers to gain a lot of useful information.

Deputy Prime Minister of the Russian Federation - Minister of Finance of the Russian Federation, Chairman of the Board of directors of the Deposit Insurance Agency A.L. Kudrin