Russian Central Banker Lauded as Putin Confronts the System?
By Daily Bell Staff - October 21, 2016

Elvira Nabiullina hunts down Russia’s banking ‘banditry’ … Former economy minister has shut 276 lenders and forced 28 others to reform … When Elvira Nabiullina took over as governor of Russia’s central bank, she came face to face with a sobering statistic: regulators listed as many as 150 banks that were regularly involved in dubious transactions.  Financial Times

This is a strange article because it apparently avoids issues in Russia regarding central banking that we and others have reported on in the recent past.

The profile of this central banker is essentially adulatory and thus provides us with more questions than answers as it doesn’t mention that Putin seems embarked on a course to replace his current Western-initiated monetary system. What an essentially vacuous article it is …

The individual in question, we are informed, is small, female and incredibly disciplined. As with Janet Yellen, it is not her gender that makes the difference, but the breadth of her knowledge, her determination, her honesty, her intellect and the respect she creates.

One would hardly believe she was in the business of debasing money and ruining Russia gradually. Certainly the article provides an alternative viewpoint.


Today, after an unprecedented three-year purge of the dark corners of Russian finance, that number is down to “no more than about 10”, Ms Nabiullina says. And she is only just getting started.

“What pleases us is that people are realising that punishment is inevitable for those who don’t respect the law,” the central banker, praised recently by President Vladimir Putin for her “energetic efforts [against] banditry”, tells the FT in an interview in her neoclassical Moscow headquarters, across the street from the Bolshoi Theatre.

“Unscrupulous bankers are being punished and going to prison, and it’s very important to avoid that happening again.”

Outwardly, little about the mild-mannered 52 year old marks her out as a crusader against financial malpractice. Since taking over, she has shut down 276 banks and put a further 28 through the regulator’s financial rehabilitation programme.

An ethnic Tatar and opera lover who can recite French poetry from memory, she served as economy minister before Mr Putin chose her as a compromise candidate to lead the central bank in 2013.

According to Financial Times under Elvira, “The banking system has fully returned to profitability.” Exactly what that means is difficult to understand. Can’t most large countries print a lot of money at will without an immediate, overwhelming impact on price inflation?

Anyway, we’ve read dozens of articles about how badly off Russia is because of sanctions.

Maybe her profile is being bolstered because there is considerable tumult in Russia regarding banking. Back in August we published an article entitled, “Dollar Disaster Looms? China and Russian Currencies Break Away.”

We began with an excerpt from a article (here), that mentioned a recently completed Russian report (Stolypin) as follows:

Russia leaves the Dollar based monetary system and adopts a system of Sovereign Currency. The implications are phenomenal! “In 1990 the first priority of Washington and the IMF was to pressure Yeltsin and the Duma to “privatize” the State Bank of Russia, under a Constitutional amendment that mandated the new Central Bank of Russia, like the Federal Reserve or European Central Bank, be a purely monetarist entity whose only mandate is to control inflation and stabilize the Ruble. In effect, money creation in Russia was removed from state sovereignty and tied to the US dollar.”

2016: “The Stolypin club report advises to increase the investment, pumping up the economy with money from the state budget and by the issue of the Bank of Russia”. Putin decided to follow the Stolypin club advice as the new monetary policy of the country.

Then we published an excerpt from yet another article (translated from the Russian) describing how the ruble may now evolve (here):

We must nationalize the ruble. What does it mean? It means that we must separate the internal markets from the external ones.  … Thus, the first step for Russia is secession from the IMF and others similar institutions designed to keep the entire world in bondage. The dollar noose must be cut.  Now the amount of printed rubles will not be determined by how many dollars we have but by the actual needs of our economy.  … We have absolutely no need in the central bank in its current form, but we do need a financial regular. Under any regime, it was the Treasury that performed this function. Let it remain the same now regardless of the official name. It may continue to be called the Central Bank. If the essence is changed, there is no need in changing plaques.

Basically these excerpts summarize a monetary system being tugged in several directions. Given currently military tensions and the above changes to the monetary system, the Financial Times raises as many questions as it answers.

Conclusion: Somebody obviously wanted to give Elvira – and her central bank – a boost. But the impetus for this adulatory, if vacuous, profile is a good deal less clear and may be an indication of a situation evolving in unexpected and even confrontational ways.


Tagged with:
Share via
Copy link
Powered by Social Snap