Russia's new Central Bank chief and the battle over bank reforms
Yekaterina Vlasova and Yelena Lashkina, RIA Novosti, Moscow
Sergei Ignatyev, the new head of the Central Bank, will have it hard. For his actions will be for a long time evaluated by the scale of his predecessor, Viktor Gerashchenko, who was nearly the only Russian official to be regarded as a symbol of stability and etatist professionalism.
It is clear that Ignatyev's appointment will be approved. The State Duma and the Federation Council have expressed their attitude to the candidate and they agree that Ignatyev is a highly professional financier quite suited for the post. As deputy finance minister, he was responsible for the banking reform and headed the inter-departmental commission on the reform of credit establishments. As Finance Minister Aleksei Kudrin said, "there are legends in the Finance Ministry, and not the ministry alone" about the uprightness and high principles of Ignatyev.
A member of the upper parliamentary house was even more outspoken. He said: "One can only welcome the appointment of such strict, pedantic and strong financier, who will die and kill anyone for a budgetary rouble." Time will show if Ignatyev will die or kill, but so far he remains unknown for most. He is also one of the few most shadowy figures on the Russian financial scene.
Experts say one of the key reasons that forced Viktor Gerashchenko to resign was fundamental differences with the government concerning the methods and deadlines of the banking reform. Gerashchenko's conservative and balanced attitude to the issue was an easy target for criticism by the government, the Duma and oligarchs, who rejected the banker's stand on currency liberalization.
On the one hand, Gerashchenko's resignation can be seen as a major bureaucratic victory of Prime Minister Mikhail Kasyanov. He said more than once that the skidding banking reform seriously hindered economic progress, thus hinting that the Central Bank leadership is directly responsible for Vladimir Putin's complaints about the far from good situation in the country. It is true that Kasyanov never openly voiced his displeasure with Gerashchenko, yet the "cool" relations between the premier and the chief banker of Russia were an open secret.
On the other hand, Kasyanov won only partial victory in the battle for control of the Central Bank. Gerashchenko will no longer "irritate" Kasyanov with chronic opposition to the government's policy of tackling credit and financial issues. Kasyanov will no longer have to hear Gerashchenko's biting comments, which never grew into open criticism of the government's actions yet clearly showed that the cabinet's efforts do not always fit into the framework of state logic, to put it mildly.
It should be said that Gerashchenko was unique in this respect. His prestige is so high that a skeptical grimace on his face was enough to provoke an immediate storm of criticism of the government.
The current candidate to the post, Sergei Ignatyev, stands much closer to Kasyanov than Gerashchenko ever did. However, one cannot describe him as Kasyanov's man. A member of the "Petersburg team" summoned to Moscow jointly with Chubais, he stands much closer to Finance Minister Aleksei Kudrin, who holds different views than Kasyanov on quite a few issues.
Consequently, we can expect to see a fierce struggle for the post of first deputy head of the Central Bank. According to this newspaper's sources, the chair will be most probably given to a man from the banking structures, either to a man from a large commercial bank or to the head of a state bank slated for modernization. In either case unlike Sergei Ignatyev, who has not made a stand yet, his deputy will not be a dark horse but a prominent and well-known figure.
On the other hand, Ignatyev may be a compromise choice. Our sources mentioned the rumor that the early resignation of Viktor Gerashchenko was a result of a political collusion formed by the "family" and the "Petersburg team," with Ignatyev and Kudrin being members of the latter, against the so-called "new Petersburg group." The sources said that banker Sergei Pugachev, who is now member of the Federation Council, is showing considerable interest for the Central Bank and would have greatly reinforced his already strong positions by autumn, a time when the Central Bank leadership was to be replaced.
This is why Kudrin and Kasyanov played at pre-empting Pugachev, because neither wants the "expansion of the Kremlin-2." The loss of control of the Central Bank means the loss of control of the monetary and credit policy of the state, which the government cannot allow. Anyway, the resignation of Viktor Gerashchenko was part of the reshuffle in the country's political elite.