2008 Russian financial crisis
The 2008 Russian financial crisis is an ongoing crisis on Russian markets, as nervousness over the global banking crisis has been compounded by political fears after the war with Georgia, as well as renewed concern about state intervention in corporations of strategic interests. Russia's economy is also heavily dependent on energy prices, especially oil which has lost more than a third of its value since its record peak of USD 147 on July 11, 2008.
Russia is a major exporter of commodities such as oil and metals, its equity market has been hit hard by the decline in the price of many commodities. In addition, investors have pulled billions of dollars out of Russia on concerns over escalating geopolitical tensions with the West following the military conflict between Georgia and Russia, as well as concerns about state interference in the economy. Those concerns were underscored in July by Prime Minister Vladimir Putin's criticism of steel company Mechel which wiped out billions of dollars of its market capitalization. By September 2008, the RTS stock index plunged almost 54%, making it one of the worst performing markets in the world. Compounding the volatile situation in Russia's financial system has been also involvement in the US subprime mortgage crisis with the Russian Central Bank owning US$100 Billion of mortgage-backed securities in the two American mortgage giants Fannie Mae and Freddie Mac that were taken over by the US government that most likely will have to be written off
Swedish Foreign minister Carl Bildt said on September 17 that the current Russian financial crisis is "obviously more worrying" than the ongoing subprime mortgage crisis in view of the political development in Russia.
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Video: Russia's financial crisis, Sept 17 08
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