The Bank of Russia is desperately trying to prevent a run on Russian banks. Today, the Russian central bank announced that it would lower reserve requirements for banks. Central banks around the world require banks to have reserves at their central bank in order to protect them and their depositors from a bank run. Lowering reserves for Russian banks is a clear sign that Russian banks’ liquidity is decreasing. The central bank announced that the liquidity gap in the Russian banking system is now $68 billion dollars, a 27% increase in the gap in just one day.
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