This Shakeout Can't Come Soon Enough

In July, managers at Moscow's Alfa Bank noticed a worrisome trend in Russia's money markets. Banks that had been borrowing and lending to each other for three-month terms suddenly began to do seven-day deals. "That was a sign that they were having liquidity problems," says Pavel I. Gorbatsevich, Alfa Bank's acting chairman. So at the end of July, Alfa Bank opted to do money-market deals with only the 25 healthiest of its 100 banking partners.

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