Russia
Russia enters systemic banking crisis as recession signals flash red
Signs of recession and a systemic banking crisis are intensifying across the Russian economy, according to a report by the Center for Macroeconomic Analysis and Short-term Forecasting (TsMAKP). Based on data as of January 2026, the center warns that risks to financial stability have transitioned from theoretical threats to established realities.
“The systemic banking crisis previously predicted by our system has now been officially registered according to formal criteria,” the experts noted, adding that a “crisis of bad debts” had already been documented recently.
Data within the report characterizes the current scale of the crisis as “moderate” for the time being. While slightly more than 10% of the banking system’s total assets and credit portfolios are considered problematic, the situation is significantly more dire in specific sectors.
“The depth of the damage may be greater in certain areas; for instance, the ratio of problematic loans among SMEs stands at an average of 19%,” TsMAKP experts stated.
Economic recession signals strengthening for five months
Beyond the financial crisis, severe pressure is mounting on the real economy. TsMAKP’s early warning system strongly indicates that the Russian economy is entering a recession, defined as negative growth in physical GDP volume.
“For the last five months, and with increasing urgency each month, the system has been predicting that an economic recession will occur,” the report stated.
However, the center emphasizes that these signals should not be viewed as an absolute inevitability.
“It should be remembered that a high recession probability signal from the system does not mean the event is fated. The relevant models allow for both technical and structural forecasting errors,” the report cautioned.
The experts explained that structural errors could arise from models being calibrated against historical international data, which may not fully account for unique local and temporal conditions currently in play.
Overvalued ruble and the high-interest rate squeeze
Analysts highlighted a shift in the primary factors triggering these risks.
“An analysis of the leading indicators reveals that the destabilizing factor of interest rate dynamics has been replaced by the dynamics of the ruble exchange rate,” the report found.
Specifically, the extreme real appreciation of the national currency is exerting destructive pressure on domestic producers and exporters. The report detailed the situation:
“The extreme strengthening of the ruble—reaching 25% annually in real terms—combined with interest rates that remain high (despite a gradual decline) is creating exceptionally harsh monetary conditions for domestic business.”
Against this backdrop, the report noted a sharp deterioration in credit portfolio quality within the corporate segment, particularly regarding loans granted to oil-and-gas and mining-and-metallurgical companies.
High risk of “bank runs” persists
The early warning system also flagged “depositor flight” as a risk factor that could destabilize liquidity balances within the banking system.
“The early warning system is recording high risks regarding the emergence of a bank run effect,” the report warned.
Experts attributed the lack of a mass movement thus far to the “covert” nature of the crisis. “Due to the hidden nature of the banking crisis, this effect has not yet manifested. However, if crisis processes deepen, these risks could surface,” the assessment noted.
TsMAKP added that the concentration of deposits in large state-owned banks is a key factor currently preventing bank failures and widespread panic.
Systemic credit risks and the role of state support
The deterioration in credit markets is viewed as a consequence of rapid debt accumulation in 2023 and 2024, followed by aggressive interest rate hikes in late 2024.
“The rapid increase in debt volume within the non-financial sector, followed by the surge in interest rates, predetermined the further degradation of the banking system’s overall asset and credit portfolio quality,” the report stated.
The share of problematic loans (categories IV-V) in the total portfolio reached 6.9% in June 2025, a one-percentage-point increase over the previous year.
However, the situation appears more serious when restructurings are included. “Based on Central Bank data, the share of problematic loans—including risky restructurings and category IV-V loans—is estimated at 9.9% by the end of the third quarter,” the report revealed.
The Central Bank of Russia’s decision to extend support measures for SMEs in December 2025 and its recommendation that banks restructure debts are seen as factors tempering further rises in this ratio.
“Statistics in the coming months will likely show this share stabilizing. The Central Bank’s policy of encouraging restructurings will contribute to this,” the report noted.
Recession duration and exit scenarios
The slowdown in economic activity, compounded by global influences and internal imbalances, is fueling concerns that a recession could be prolonged.
“The Signal of Onset Index (SOI) remained above the critical threshold of 0.18 in November, reaching 0.44. Thus, the system continues to signal a high probability that the Russian economy will enter a recession by July 2026,” the report stated.
Exit indicators paint a similarly bleak picture. The “Signal of Outset” indicator remained at 0.05, far below the critical threshold of 0.35.
“For the third consecutive month, the indicator signals that the approaching recession could take on a prolonged character, potentially lasting more than a year,” the TsMAKP report concluded.
External factors supporting this pessimistic outlook include the expected slowdown in the US economy and the decline in Russia’s current account balance.
Pressure on the ruble reverses in the currency market
In the currency market, pressure on the ruble is trending toward appreciation, contrary to historical crisis periods.
The Exchange Market Pressure (EMP) index remained in negative territory at -0.44 in early December.
“This indicates that market pressure continues to push for a strengthening of the ruble. The systemic currency risk indicator remains at zero, at its maximum distance from the critical level,” the report noted.
As a result, TsMAKP considers the probability of a traditional currency crisis—characterized by a sharp devaluation of the ruble—to be very low over the next year.
Russia
Russia relaxes diesel export curbs after talks with Trump
Russia has announced that it will ship 500,000 tonnes of diesel fuel to the global market under a partial lifting of its diesel export ban, enacted as part of measures concerning the Ukraine crisis and energy markets.
A statement from the Russian government said the decision was implemented in accordance with understandings reached between Russian President Vladimir Putin and US President Donald Trump.
Under the decision, which came into effect on 10 October, an initial phase of 500,000 tonnes of diesel fuel will be supplied to the global market.
“Following the rescinded decision, Russian oil companies, in coordination with the government, will immediately begin signing diesel fuel supply contracts with foreign business partners,” the government statement said.
Assessing the matter, Deputy Prime Minister Aleksandr Novak stressed that the decision would not affect the interests of Russian consumers.
Noting that diesel fuel is produced from Russian crude at domestic refineries, Novak stated that production volumes are sufficient both to meet all domestic market requirements in full and to ship the specified quantities to the global market.
The ban on diesel fuel exports in Russia was initially put into effect on 31 January 2026, covering only non-producing companies.
The government tightened the restrictions on 9 July by expanding them to include direct producers. Previously announced to remain in place until the end of October, the ban was partially relaxed in light of current developments.
Vladimir Putin and Donald Trump held a telephone conversation on 9 October. Following the call, US President Trump announced that an agreement had been reached on the supply of Russian diesel.
Trump said Russia had agreed to send more than 300,000 tonnes of fuel to American and global markets in the initial phase, 500,000 tonnes in November, and 1 million tonnes thereafter.
Trump also stated that an additional shipment of 3 million tonnes could follow at a later stage, adding that they expect this agreement to reduce diesel fuel prices rapidly.
Following the conversation, the US Department of the Treasury, on Trump’s instructions, issued a temporary general licence exempting Russian diesel fuel transactions and shipments to the US—previously prohibited under sanctions—until 7 April 2027.
Putin, in a statement after the call, confirmed Russia’s readiness to supply crude oil and petroleum products to American and global markets, noting that this would have a positive impact on the world economy.
Putin also noted that the two leaders discussed prospects for resolving the conflict in Ukraine, the situation surrounding Iran, and bilateral relations, agreeing to maintain contacts through presidential envoys, intelligence agencies, and other institutions.
A statement issued by Novak’s office after the call said Russia was prepared to ship diesel to the US within October.
Novak stated that export volumes could be increased in November and December as refineries emerge from scheduled maintenance.
Novak also conveyed that Moscow views positively Washington’s steps towards stabilising the global energy market and normalising energy trade.
Russia
Drone strike shuts down Yandex data centre in Russia’s Ryazan region
A drone strike has hit a data centre belonging to Russian internet company Yandex in the town of Sasovo, located in the Ryazan region.
The company announced that a fire triggered by the attack damaged part of the infrastructure and resulted in a complete shutdown of the facility’s operations. No casualties or injuries were reported in the incident.
In a statement, Yandex said competent authorities and relevant teams were working at the scene to remediate the damage.
Owing to the facility being knocked offline, it was noted that some of the company’s online services might temporarily become inaccessible to users.
The company provided no details regarding the financial scale of the damage or when the data centre would be brought back into service.
Shares slide, cloud infrastructure curbs introduced
Following the developments, Yandex shares fell by more than 3.4% as of 10:10 Türkiye time.
A drone threat alert was reportedly communicated to residents of the Ryazan region at 23:48 on the night of 7 October, with the alarm lifted at 02:46 on the morning of 8 October. The facility in Sasovo had commenced operations in 2014.
In an advisory issued via the Yandex Cloud Alerts channel, it was reported that power issues were occurring in the system’s “ru-central1-b” availability zone.
The company stated that efforts to transfer data workloads to other availability zones had been completed and that services in other zones continued to operate normally.
However, it was noted that temporary restrictions could be imposed on the creation of new resources within the cloud infrastructure. According to data from outage-monitoring platform Downdetector, an increase in user complaints concerning Yandex, Yandex Cloud, and the real estate platform CIAN was recorded on the morning of 8 October. Reports were observed to have originated predominantly from Moscow and surrounding regions.

Data centre targeted for first time after logistics warehouses
Whether the attack directly targeted the data centre remains unconfirmed. Nevertheless, as of 8 October, this went on record as the first drone strike directed at data centres in Russia.
Beginning in the summer months of 2026, warehouses belonging to Russia’s leading e-commerce platforms had faced drone attacks.
Fires at several warehouses owned by the company Wildberries caused hundreds of billions of roubles in losses for sellers, after which logistics centres belonging to the company Ozon were also targeted.
Both companies amended their contractual terms, shifting liability for damages arising from attacks onto sellers.
Yandex facilities had previously experienced a widespread outage on 30 March 2025 due to a transformer failure, which temporarily disabled services including Yandex Cloud, Yandex Music, and Yandex Lavka.
Russia
US and Russian figures discuss American stake in Nord Stream lines
Senior officials from Russia and the US have reportedly discussed involving an American investor in the Nord Stream natural gas pipelines.
According to a report by the Reuters news agency based on five sources, those taking part in contacts included Kirill Dmitriyev, head of the Russian Direct Investment Fund (RDIF) and the Russian president’s special representative for investment and economic cooperation with foreign states, and Jared Kushner, son-in-law of the US leader.
Two sources providing information on the scope of the discussions said that while it remains unclear how detailed the consideration of the Nord Stream topic was, the matter nevertheless remains on the agenda.
Kushner reportedly views business-oriented cooperation as an instrument in initiatives aimed at ending the war in Ukraine.
A potential agreement could reportedly offer US investors an opportunity to profit from energy shipments to Europe once the war ends.
White House states no recent contacts have taken place
A White House official told Reuters that no negotiations regarding Nord Stream have been conducted recently.
The official emphasised that any agreement with Russia would require approval from the US International Development Finance Corporation (DFC) and the US Department of the Treasury, adding that such steps must yield benefits for US taxpayers and companies.
Another US official described reaching an understanding in the medium term as unlikely due to existing obstacles.
The natural gas pipelines are subject to US and European Union sanctions. A spokesperson for the German Federal Ministry for Economic Affairs and Energy stated that the approval of the German federal government is mandatory for the pipelines to be brought back into service, adding that the Berlin administration does not support such a step.
The spokesperson also recalled that Germany has secured alternative supplies to Russian gas.
The ownership structure of Nord Stream also features among the issues complicating the ground for negotiations.
In the consortium operating the project, Russian energy giant Gazprom holds a 51% stake, while the combined share of two German partners stands at 31%.
The remaining shares are held by France- and Netherlands-based companies.
A source speaking to the agency stated that the German partners wish to retain their stakes in order to preserve their influence in the project should Gazprom’s shares be sold.
What had American investor Lynch proposed?
The concept of involving a US financier in the Nord Stream projects had also surfaced in 2024.
American investor Stephen Lynch, founder of Monte Valle Partners, who conducted commercial activities in Russia for 20 years, had applied to the US administration for a licence allowing him to bid if the Nord Stream 2 pipeline were put up for auction.
Lynch described this potential move as an opportunity to keep Europe’s energy supply under control until the fossil-fuel era ends, as well as leverage against Russia in peace negotiations.
The Alternative for Germany (AfD) party described the possibility of transferring the pipeline to Lynch as an illustration of the German government’s irrational policy.
Separately, The New York Times (NYT) reported earlier this month that Ukraine-related contacts between Russia and the US were expanding to include a multi-billion-dollar oil deal covering Lukoil’s foreign assets.
The assets in question included Lukoil’s refineries in Eastern Europe as well as filling stations in the US.
NYT sources reported that discussions in this framework were also addressed during a meeting between Russian President Vladimir Putin, Steven Witkoff, and Kushner.
The sabotage of the Nord Stream pipelines took place in September 2022, with three of the four lines damaged by explosions.
One string of the Nord Stream 2 pipeline, which had not yet been commissioned at the time, remained intact.
The Federal Security Service of the Russian Federation (FSB) classified the incident as an act of international terrorism, while Putin claimed that “Anglo-Saxons” were behind the attack.
In investigations into the incident, judicial proceedings were pursued against several Ukrainian citizens, including professional diver Vladimir Juravlyov, suspected of planting explosives off the island of Bornholm, and Sergey Kuznetsov, who allegedly skippered the yacht Andromeda.
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