Mr Putin's opening remarks:

Good afternoon, colleagues,

We have gathered here today to discuss the financial sector and the economy in general.

During the last few months, we have implemented certain measures to make loans more accessible for industries.

In particular, the Central Bank lowered the refinancing rate from 13% to 11%.

We also worked out a new procedure for granting state guarantees to backbone enterprises and the defence industry organisations. Banks will now be able to receive state guaranteed compensation immediately upon a borrower's default, without waiting for the sale of collateral. A total of 300 billion roubles have been reserved for these purposes.

Apart from that, we have allocated an additional 280 billion roubles to support the banking system. Vnesheconombank has already received 100 billion roubles, and Vneshtorgbank - 180 billion roubles.

We adopted a law on the possibility of acquisition of a commercial bank's preferred shares by the state.

We have been building a system where banks can receive financial support from the state only when they abide by their commitments to extend loans to the enterprises in the real sector of the economy.

The banks increasing their capital through subordinated loans from the National Welfare Fund should issue loans to the real sector at the Central Bank rate plus 3%, which would be a 14% annual interest rate. We recently discussed this with German Gref (Sberbank president and board chairman) at the meeting of the Sberbank Board and I see that it is not easy for all banks.

I believe this interest rate is quite acceptable under current conditions. Sergei Ignatyev (Central Bank chairman) spoke in the same vein at the meeting with the top managers of the Central Bank. I would like to hear his opinion once again here.

The Government has also asked state-owned banks to increase the issue of new loans to industries in July by no less than 150 billion roubles.

I would like to know what has been done in this respect.

But I would also like to stress that while focusing on loans, we should not do it to the detriment of the sustainability of the country's financial system.

Our task is to support businesses with realistic production plans. I am referring to the real sector of the economy, to industries that manufacture products in demand, but that are facing difficulties today because of dramatic changes in the business environment.

In other words, we have to find an optimal balance. On the one hand, we should avoid a decrease in loan volume, overcome credit contraction, but on the other hand, we need to prevent the uncontrollable growth of so-called bad loans.

I would like to discuss these issues in detail today.