Outlook: CSFB has only itself to blame

SEEN THROUGH the distorted prism of the financial markets, the only issue that really matters in Russia's economic crisis is how foreign banks are going to come out of the $40bn debt restructuring package.

The fate of Russia's economy, and the longer-term question of whether this sad old country can ever get its act together, appear largely forgotten - never mind ordinary Russians as in time-honoured fashion they again reach for the vodka.

Big Western banks badly stung by the latest Russian events - particularly Credit Suisse First Boston - have elevated the wrangling over the debt restructuring package to a level of high principle: if Russia cannot obey the rules of international capital markets then it will forever be denied further access to them. This is the altruistic point. The more immediate one is that if Russia persists in discriminating against foreign banks in the debt restructuring proposals, they and their clients will lose even more money than they have already.

In the end, however, it is hard to have much sympathy for the investment bankers. They are like bounty hunters on the wild eastern frontiers of capitalism. They knew the risks and they cannot claim they were not warned. Russia has a long history of defaults and its transition from communism to capitalism has been rough and ready, to put it mildly. The hope was that Russia would tread the trail blazed by Poland, Hungary, Czech Republic, and other former members of the Eastern Bloc that managed to reinvent themselves as dynamic free market economies. In truth, this was always going to be a much more difficult process in Russia.

Furthermore, those complaining loudest are also the ones who profited most when the party was in full swing. It's hard to remember it now, but this time last year Russia was the best-performing equity market in the world. As for the Russian debt market, who in their right mind would believe that yields of 150 per cent for three-month paper come risk free? These were highly paid investment bankers playing these markets, yet they seem to have done so with all the innocence of a defrauded Barlow Clowes investor.

Start your day with The Independent, sign up for daily news emails
Sport
football
News
Hillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
Sport
wimbledonScot will face Ivo Karlovic next
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test