in retaining people in the financial market and keeping their funds inside the financial system. we were hoping that banks would be able to agree upon selling rules and would not offer such a product to a client that would be disappointing, striving to sign one contract, would not be misleading about product prices or conceal additional services. the associations of financial market participants jointly developed selling standards two years ago already. eventually, as little as 20 banks have joined these standards, and even these banks fail to comply with them. as you remember, we have held several discussions on this topic, emphasising that if the banking community does not comply with the standards itself, we will have to request legislative authorities to adopt adequate regulation. disappointingly, that negative episode we have also discussed when investment life insurance policies were being sold through banks was followed by the sales of complex structured products. this implies that even such a dramatic episode as investment life insurance has had no influence on abusive practices in banks ’ sales under agency agreements. therefore, we were forced to request legislative authorities to grant us the powers to stipulate selling rules through our regulation. as regards complex structured products, we insist on imposing certain prohibitions, and both anatoly aksakov and nikolay zhuravlev have already said this. we have been discussing at the federation council that we need adequate laws in this area. the second problem is high hidden fees in consumer lending. in the conditions of low interest rates, banks, regrettably, also get involved in dubious practices striving to increase their interest income. some banks ‘ conceal ’ the actual cost of a loan in insurance premiums and fees, while their amount may reach up to 50 % of the loan cost. often, people are unable to understand how much they would have to actually pay for a loan. therefore, we are proposing a new approach to calculating the effective interest rate and hoping to be supported by legislative authorities on this issue as well. the new approach implies that the calculation will cover all additional services and insurance options approved by a borrower. as a result, a client will receive exhaustive information. furthermore, as loans with a high effective interest rate involve higher capital requirements, banks will be less interested in granting so expensive loans. 5 / 7 bis central bankers'speeches the third topic is floating interest rates on retail loans. banks want to be capable to efficiently manage their interest rate risk. indeed, we appreciate that banks are careful in controlling their interest rate risk. this risk should

scenario is built on the basis of the average annual oil price in 2015, which will be slightly below the average price in 2014. further on, we project a gradual downward bis central bankers ’ speeches adjustment of the average annual oil price. if necessary, we shall review the base assumptions of oil price before submitting the final draft of the document to the state duma. another difference of the forecast prepared by the ministry of economic development is in the fact that its projected 2015 inflation is 5. 0 – 6. 0 %, which is higher than the forecast of the bank of russia. in our assumptions we expect the exhaustion of the factors that have caused the rise in inflation this year, and in the baseline scenario, we assume that the inflation will reach 4 – 4. 5 %. according to our estimates, the difference between the key parameters of the federal budget, calculated on the basis of the forecast of the ministry of economic development ( this is the way the draft budget is calculated ) and the one calculated on the basis of the bank of russia forecast, is also insignificant. the federal budget deficit in 2015 – 2017 will remain low. we welcome the policy aimed at ensuring the sustainability of public finance, especially bearing in mind long - term risks which may be caused, firstly, by the demographic situation, secondly, by the escalation of pension system problems, and thirdly, by a possible fall in oil and gas revenues. these long - term risks are already in place, and, therefore, in our opinion, it is very important to maintain a conservative approach to budgeting process over a longer - term horizon. besides, it is necessary to continue improving the efficiency of budget spending, particularly in terms of investment projects, in order to increase the share of expenditures that have a multiplication effect on the economic growth within the budget structure. it will also indirectly affect the monetary policy and the possibility of its easing. in our opinion, the bank of russia contributes to creating conditions for structural changes in the economy by decreasing inflation and keeping it at a consistently low level. firstly, we need to bring the inflation to a low level, and secondly, we need to keep it there. in 2014, the bank of russia is completing the longstanding transition to the inflation targeting regime, and from 2015 it plans to conduct monetary policy within the framework of this regime. why does the bank of russia pursue its previously set goals, in spite of the current difficult situation, high uncertainty of its future development and volatility