The European Central Bank launched a three-year program with the Bank of Russia Thursday aimed at increasing cooperation in banking supervision and internal auditing. “The banking supervision component of the programme will aim at enhancing the institutional capacity of the Bank of Russia to maintain the stability of the Russian banking system,” an ECB statement said. It was to focus on helping the Russian banking system meet so-called Basel II criteria, which are designed to improve the consistency of capital reserve rules internationally and promote better risk-management practices by globally active banking institutions. “The internal audit component of the programme will aim to support the Bank of Russia's risk-based internal audit function, through training by and consultations with the experts of the Eurosystem” of eurozone central banks, the ECB added. The European Union has provided a grant of three million euros ($4.6 million) for the program within the framework of a EU-Russia cooperation accord. Meanwhile, the European Central Bank (ECB) alloted 15 billion euros ($23 billion) on Thursday in a quick refinancing operation aimed at offseting a projected liquidity shortage in the money market. Central banks often ensure the banking sector is well supplied with cash ahead of long holiday weekends, in this case Easter Sunday. The ECB received bids totalling 65.81 billion euros for funds that were offered for five days, it said in a statement. The offer was a so-called fine tuning operation, a process by which the bank controls the amount of cash available to markets on which commercial banks lend to each other. Money market tension has risen again owing to renewed uncertainty over banks' financial positions in light of US economic woes. The average rate at which bids were accepted was 4.20 percent, while the marginal rate, or lowest rate at which bids were accepted, was 4.13 percent. The ECB had set a minimum bid rate of 4.00 percent for the tender. __
