Prime Minister Putin's introductory remarks:

Good afternoon, ladies and gentlemen,

Today we are having our regular meeting of the Vnesheconombank Supervisory Board. We are going to hear a report on the implementation of government antirecessionary measures and discuss a series of new investment projects.

As you remember, Vnesheconombank played an important role in bailing out the Russian banking system during the crisis, and continues to play this role today. Vnesheconombank issued subordinated loans worth 388 billion roubles to the 16 commercial banks that qualified and committed to increasing available credit for borrowers at interest rates companies can afford.

We recently agreed that these interest rates should be 3% higher than the Central Bank's refinancing rate. I am not sure that everything was implemented effectively or at the right time, but I hope that this measure played a positive, stabilising role during the most challenging period.

Given that subordinated loans are issued for a ten-year term, these additional resources will continue to stimulate business activity in the economy.

In this regard, I would like to emphasise the government's efforts to support the Russian banking sector during the crisis. As opposed to the ineffective efforts during the recession in 1998, we managed to avoid the collapse of the banking system and the bankruptcy of Russia's major financial establishments. I think everyone remembers well how in 1998 all the largest commercial banks that had seemed rock-solid practically ceased to exist, including Inkombank, Imperial, Stolichy Savings Bank, Onexim Bank and others.

I believe the owners didn't suffer devastating losses, but depositors, common people lost a significant portion of their money kept in these financial establishments. We avoided this sort of negative scenario by keeping every bank afloat and protecting the interests of depositors, who are primarily Russian citizens.

However, the banks that found themselves in the gravest circumstances and unable to get out of this difficult situation on their own - a total of 18 banks - have been acquired by the state-run Deposit Insurance Agency for a nominal fee, sometimes as low as one rouble.

These acquisitions were intended to reorganise and enlarge these financial establishments in order to create viable banking institutions that can continue to work with economic actors, including legal entities and individuals.

Today we are to decide on the future of Sviaz-Bank.

Like a number of other lending agencies, Sviaz-Bank has been unable to cope with the current problems on its own, and thus was placed under the control of Vnesheconombank, which quickly restored its solvency.

Our task is to work out a development strategy for Sviaz-Bank and the conditions under which we will be ready to attract partners to this project.

Next, we must make a decision to allocate 21 billion roubles to the share capital of the United Aircraft Building Corporation. We have been discussing this issue for a long time. It took a few months to prepare and work out this decision, and we must finally adopt it today.

These targeted funds are intended to turn the company around financially and allow it to settle its accounts with creditors and suppliers.

Early next year the United Aircraft Building Corporation will receive an additional 10.7 billion roubles from the federal budget. These funds will be spent on producing new Russian civilian aircraft rather than on just "patching holes".

We are also going to consider proposals to fund a new investment project in the Far East, specifically the modernisation of the Khabarovsk Oil Refinery.

We are planning to fully upgrade this facility, which is of critical importance to the region and one of the major companies in the Far East. We will install the most cutting-edge, environmentally friendly technologies and ensure the production of engine fuel of the highest standards: Euro IV and higher. The total cost of the project is estimated at $1.3 billion.

I would also like to remind you that at previous Supervisory Board meetings it was decided to set up subsidiaries to manage Vnesheconombank's assets and a specialised engineering company. Its main objective is to study project documentation, fastidiously monitor the progress in implementing the investment projects, and, if needed, take action against the improper or inefficient use of Vnesheconombank's lending resources.

Today we will discuss and adopt the documents that will allow us to launch VEB Capital and the engineering company.

Let's get down to work.