The Central Bank of Russia (CBR) requested the systemically important banks to provide information on risk hedging for largest clients on a short notice, Kommersant daily reported on August 22 citing unnamed market participants.
Reportedly the regulator is alarmed by the controversial case of oil pipeline monopoly Transneft being awarded RUB67bn (€1bn) compensation on loss incurred from currency hedging operations with Russia's largest lender Sberbank a result of ruble devaluation in 2015.
While the court argued on June 23 that Transneft was not fully informed of all the risks associated with the hedging instruments, Sberbank said it will appeal the ruling, calling it a dangerous precedent that would undermine the derivatives market and lead to massive banking losses.
Russian banks could suffer losses of up to RUB1 trillion in losses if other large clients follow suit, according to the head of Sberbank CIB's global markets department Andrei Shemetov, Prime reported. The whole market of currency and other derivatives is estimated by Sberbank at $200bn.
Now the CBR is "extremely conerned" with the situation, the sources told Kommersant, and moved to collect the information from the banks to assess the scope of the problem.
As Sberbank's appeal is set to be heard in court on August 23, the CBR requested the largest banks on short notice to provide the list of hedging clients, the amoutns of open deals, nominal and current value of the deals, planned maturities, goals of hedging operations and risk management plans on the operations.