The head of Russia’s Audit Chamber said on Thursday that despite implementing nearly all planned activities, the Bank of Russia has failed to substantially develop the country’s financial market, Nezavisimaya Gazeta reports.
“In some respects, on the contrary, the situation has deteriorated, there are signs of reduced competition,” Kudrin said. “Despite the almost complete implementation by the central bank of the plan of measures for the past three-year period (97.8%), it was largely impossible to achieve the expected results.”
Kudrin was commenting on a document prepared by experts at the Audit Chamber, who analyzed two central bank documents: the Main directions of financial market development for 2016–2018 and for 2019–2021.
“The target values for 8 of 13 key performance indicators that were set in the Guidelines for 2016-2018 were not achieved. Of the 7 indicators for the development of financial market sectors, only one was achieved – in terms of the assets of insurance companies,” the document said.
“During the implementation of the Guidelines for 2016-2018, the Russian economy as a whole rose in the Global Competitiveness Index from 45th to 43rd place. But the situation with the development of the financial market did not improve: in 2015-2016, Russia was in 95th place, and in the latest version of the index, in October 2019, it remained on it. In terms of stability of the financial system, we occupy 120th place, and in terms of the scale of the financial market we are in 77th place,” the auditors say.
The analysis also noted that current financial legislation does not define key concepts for the financial market, while the central bank “sets goals for itself, determines the criteria for their achievement and evaluates the success of its work, which is not entirely correct.”
Experts interviewed by Nezavisimaya Gazeta say that Kudrin was not quite right to put most of the blame for Russia’s underdeveloped financial market on the Bank of Russia.
“The Central Bank performs supervisory and regulatory functions. But even if the regulator has the broadest powers, the development of the financial market is determined by a whole set of factors,” says Ilya Zharsky, managing partner of the Veta expert group.