Central Bank of Russia (CBR) has selected its deputy chairman Sergei Shvetsov to head a new in-house financial markets regulator, according to Reuters.
Shvetsov will be in charge of overseeing markets, consolidating financial regulation as part of a Kremlin push to revive investor confidence after the trauma of the global financial crash in 2008.
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The Kremlin created the new mega-regulator, which will replace the Federal Financial Markets Service (FFMS) starting 1 September 2013.By 2015 the new regulator will become part of the country’s central bank.
All the authority of the FFMS on normative and legal regulation, control and supervision of the financial market, including its insurance, microfinance segment and others, should be transmitted to the CBR.
Dmitry Pankin, who is currently head of the Federal Service for Financial Markets, would not transfer to the Central Bank.
The creation of a single mega-regulator in Russia is an important step towards the further development of the Russian financial market, which will allow increasing its transparency and efficiency.
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By GlobalDataThe Central Bank has spent US$200 billion to defend the rouble before allowing the currency to depreciate by more than a third against the US dollar, while Russian stocks suffered a peak-to-trough slump of 80%.
Although recent reforms to clearing procedures have boosted the attractiveness of the local bond market to foreign investors, the country’s stocks remain unloved. The market still trades at just half of its pre-crisis highs and at an earnings discount of about half to other emerging markets.
Shvetsov’s move will clear the way for Ksenia Yudayeva, Russia’s Group of 20 summit coordinator, to assume a senior central bank post after Putin hosts leaders at a summit in St Petersburg next month.
That would help the central bank’s new head, Elvira Nabiullina, to cement her authority and add a ‘dove’ to its monetary policy team, tilting its bias towards pro-growth cuts in interest rates.
Russia has enacted a law in 2011 against insider trading, but investors have been turned off by a series of episodes in which the interests of minority shareholders have been spurned, without sanction, by the controlling shareholders of listed companies.
