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Russia rescues Bank of Moscow in record bail-out

Russia's fifth largest bank, Bank of Moscow, has been given the biggest bail-out in Russian history.

The $14bn rescue came after another bank, VTB, gained control through a hostile bid, only to uncover bad loans valued at $9bn - a third of the bank's assets.

Bank of Moscow's former head, Andrei Borodin, has fled the country, and a warrant has been issued for his arrest.

The bank was used by ex-Moscow Mayor Yuri Luzhkov to fund property projects.
'Fraudulent lending'

Mr Luzhkov was sacked by Russian President Dmitry Medvedev last year.

http://www.bbc.co.uk/news/business-13999509

Note: 1 July 2011 Last updated at 22:04 GMT

Reminded of a joke:

Quote:

A man goes into the Bank of Gdansk to make a deposit. Since he has never kept money in a bank before, he is a little nervous. "What happens if the Bank of Gdansk should fail?" he asks.

"Well, in that case your money would be insured by the Bank of Warsaw."

"But, what if the Bank of Warsaw fails?"

"Well, there'd be no problem, because the Bank of Warsaw is insured by the National Bank of Poland."

"And if the National Bank of Poland fails?"

"Then your money would be insured by the Bank of Moscow."

"And what if the Bank of Moscow fails?"

"Then your money would be insured by the Great Bank of the Soviet Union."

"And if that bank fails?"

"Well, in that case, you'd lose all your money. But, wouldn't it be worth it?"

Give me the money, I need it.