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Statement by Andrei Borodin

It has become known today that Mr Melikyan, former deputy chairman of the Russian Central Bank in charge of bank supervision, will most probably form part of the VneshTorgBank (VTB) supervisory board. At first glance, this is a second-rate piece of news; yet, it explains a lot of things in the case of the Bank of Moscow.

The informal reason for Mr Melikyan’s departure from the Central Bank is the situation with the Bank of Moscow. When new owners took control over the Bank of Moscow, it was alleged that a significant portion of the credit portfolio was of dubious quality. The Central Bank supervision’s head was blamed for insufficient attention paid to one of the country’s largest banks.

Mr Melikyan’s possible appointment to the VTB board gives one a new perspective on the situation. If there indeed were major violations at the Bank of Moscow, then the VTB, which allegedly suffered from those violations, is the last place on earth to where an official who made the violations possible could be admitted!

If, however, we acknowledge the obvious – that there were no large-scale problems at the Bank of Moscow – then Mr Melikyan’s appointment to the VTB looks logical. An experienced and skilled officer of the Central Bank is given a job at a large bank partly owned by the state. In addition, this guarantees that a former employee of the Central Bank will not disclose the real state of affairs at the Bank of Moscow under old and new owners.