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Monday 20.11.2017 | Name days: Anda, Andīna

Who will be the next Russia's Central bank governor?

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«It will be a surprise – you’ll like it,» President Vladimir Putin said with a smile when asked whether he had decided who should be next head of Russia’s central bank.

The former KGB spy said nothing more to reporters but the timing of his comment on March 7, the eve of International Women’s Day, sent a coded message that was quickly deciphered.

Before the holiday weekend was out his top economic aide, Elvira Nabiullina, had emerged as the sole viable candidate after months of intrigue and disinformation over who Putin would name to the coveted post.

Nabiullina’s name, derived from the Arabic for “Prophet of Allah”, had not appeared on any shortlist. It was precisely her status as a non-candidate that defined the 49-year-old ethnic Tatar as a compromise choice to head the Bank of Russia, say insiders and analysts. She is both trusted by Putin but acceptable to his opponents, Reuters reported.

Supporters describe Nabiullina as a skilled economist, administrator and negotiator. “She’s serious and she’s smart,” said Martin Gilman, a former International Monetary Fund staffer who heads the Centre for Advanced Studies at Moscow’s Higher School of Economics.

Others are less complimentary, saying Nabiullina exerts tight control over her subordinates and focuses on managing upwards rather than outwards – weaknesses in a central bank boss who needs to be a good delegator and an adept communicator.

Where policy makers and economists agree is that Nabiullina is a compromise choice, lacking independence compared with the central bank’s current head, Sergei Ignatyev, who retires in June after 11 years in the job.

“Putin and Medvedev perceived Ignatyev as someone who can take responsibility for what he says or does. His recommendations were in a way seen as an instruction manual,” said one senior administration official who requested anonymity.

“Will Elvira have this authority? I doubt it,” the official added. “She is one of those people who would understand how things need to be done, as a professional, but realizes that if the Kremlin wants something different, this is what must be done. End of story.”

Nabiullina will face a challenge in bringing Russia’s unruly banks to heel. The role is complicated by a plan to transform the central bank into a ‘mega-regulator’, with added responsibility for oversight of financial markets.

Even senior officials admit huge sums escape the oversight of banking regulators. In unusually forthright remarks Ignatyev, the outgoing central bank chief, said last month that nearly $50 billion was illegally siphoned abroad last year. Much of that money, Ignatyev said, appeared to be controlled by “one well-organized group of people”.

Nabiullina cut an uncertain figure when Putin proposed the central bank post to her at a meeting on March 12 at his Novo-Ogaryovo residence outside Moscow.

“I would like to thank you for the confidence you have shown in proposing my candidacy. I understand how much this is a responsible, complex and professional task,” she told Putin in a meeting staged in front of journalists.

With television cameras rolling, Nabiullina then requested that, if parliament approves her candidacy, the 65-year-old Ignatyev stay on as an adviser after he retires. Putin agreed.

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