Nabiullina named best European central banker as purge continues

Three years into her purge of the country’s banking sector which to date has seen 276 financial institutions driven out of business and a further 28 put through the regulator’s financial rehabilitation programme, the Central Bank of Russia’s Elvira Nabiullina has been named Europe’s best central banker for 2016 by the UK magazine The Banker
According to the publication, the award is in recognition of the 52-year-old’s success in manoeuvring the country through the  recent economic crisis that was brought on by a combination of the rouble’s devaluation and the endemic structural problems within the banking sector and her achievement in helping to more than halve the rate of inflation from 12.9% at the beginning of 2016 to around 6% by the year end. 
Last year had been a “turning point” in regards to business and consumer expectations towards inflation,” President Putin’s former economic adviser and the country’s erstwhile economic minister told the magazine“At the beginning of 2016, inflation expectations of market participants were well above our target, but now they are getting closer to our [end-2017] 4% inflation target.”
Nabiullina is also pleased with the psychological effect that her purge of the banking sector has had within the profession.“What pleases us is that people are realising that punishment is inevitable for those who don’t respect the law,” she told the Financial Times in a  recent interview.  “Unscrupulous bankers are being punished and going to prison, and it’s very important to avoid that happening again.”
Among the high-profile casualties of Nabiullina’s campaign has been Vneshprombank, which counted Deputy Prime Minister Dmitry Kozak and Defence Minister Sergei Shoigu among its customers as well as a number of  state-controlled companies including Rosneft, Rosneftegaz and Transneft as corporate clients. Almost exactly a year ago, its President Larissa Markus was photographed being taken away in handcuffs with the prospect of a ten-year prison sentence ahead of her.
The award comes at the end of a turbulent three years for the CRB chief and Russian in general. Within a year of taking up her post oil prices plummeted, prompting a currency crisis that nearly started  a run on the banks. Nabiullina subsequently spent $12bn in reserves in a failed attempt to prop up the rouble and then shocked markets by doubling interest rates to 17.5% and soon after switching to a free float of the currency weeks before she had originally intended. 
That all seems a long time ago now but, while Nabiullina has also been praised by IMF MD Christine Lagarde for “doing a fantastic job”, her campaign to fully reform the Russian banking sector is far from over. Analysts predict that she may have as many as another 400 banks in her sights and by her own reckoning,  there are still around 10 major banks with suspect modus operandi – but it remains to be seen how many of these are actually within her reach or if there remains a hard core that are, for political reasons, untouchable.

Source: www