Vnesheconombank

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Vnesheconombank
Native name
Внешэкономбанк
Formerly called
Vneshtorgbank of the USSR
State Corporation
Industry Financial services
Founded 1987
Headquarters Moscow, Russia
Brands VEB
Services Banking
Owner Russian Government
Website www.veb.ru/en/

Vnesheconombank (VEB) (Russian: Внешэкономбанк (ВЭБ)) is a Russian government-owned development bank, meant to provide funding for projects aimed at developing the Russian economy. It is not involved in retail banking activities.[1] Translated to the English language, its name means "Bank of Foreign Economic Activity", though it is commonly called the "Russian Development Bank", and it refers to itself as "the state corporation Bank for Development and Foreign Economic Affairs”.

From 2005 to 2006, both the assets and liabilities of the bank doubled from around $6 billion to $12 billion, and the income rose from $239 million to $301 million.[2] VEB has suffered massive losses in 2014-2015, leading to a 330 billion rubles government bailout in 2015,[3] followed by 150 billion rubles in 2016 and a similar amount planned for 2017.[4]

Activities[edit]

The Russian government uses VEB to support and develop the Russian economy and to manage Russian state debts and pension funds. It is a part in the government's plan to diversify the Russian economy, and to do so receives funds directly from the federal state budget.[citation needed] The bank was instituted in 1922.

The bank has been used to fund industrial and infrastructure projects, as well as off-budget spending on government projects such as the 2014 Sochi Winter Olympics.[5] Another one of its unofficial functions has been to act as a rescue fund for failing businesses.[5]

Organisation[edit]

Sergey Nikolaevich Gorkov has been Chairman since February 26, 2016. Gorkov was previously the deputy chairman of the board at Sberbank, Russia’s largest state-owned bank.[6]

History[edit]

VEB was first established in 1922 as "Ruskombank" (or "Russian Commercial Bank"), and in 1924 it was renamed "Vneshtorgbank of the USSR" (or "Bank for foreign trade of the USSR"), a joint stock bank. It was finally renamed "Vnesheconombank of the USSR" (the "Bank of Foreign Economic Affairs of the USSR") in 1988.[7]

In 2002, Vnesheconombank was restructured and it stepped up its efforts in servicing government programs, reduced the scope of its commercial business and gave a higher priority to supporting the government's structural reforms.[7]

In April 2002, VEB was appointed Vnesheconombank agent for investing temporarily free Pension Fund's assets in securities denominated in foreign currency, and in January 2003 a special structural subdivision to handle pension funds was formed; VEB was appointed the "State Trust Management Company" responsible for investing Russia's pension funds.[7]

In April 2007 Russia's State Duma passes the federal law "On Bank for Development", which regulated the VEB's legal conditions.[8][9]

In July 2014 the United States Department of the Treasury imposed sanctions that prohibit U.S. persons from providing new financing to VEB after the 2014 pro-Russian unrest in Ukraine.[10]

In March 2017, Jared Kushner volunteered to discuss with the United States Senate Intelligence committee Kushner's relationship and any meetings with Sergey Gorkov, chairman of Vnesheconombank. During Donald Trump's transition December 2016, these meetings were held in Trump Tower in New York City and had been arranged by Sergey I. Kislyak, Russia's Ambassador to the United States.[6][11]

See also[edit]

References[edit]

External links[edit]