Deputy Head of the Central Bank Sergey Shvetsov stressed that the FFMS-CB merger is a complex and unique task. “We split the project into three phases: phase one – prior to the actual merger, phase two – FFMS as an independent service within the CB, ending 1 January 2015; and phase three, when FFMS ceases to exist and becomes part of the CB headquarters”, said Shvetsov. Phase one is currently underway, dedicated to resolving numerous technical issues related to data transfer, new workplaces for FFMS staff, payroll etc. In Q3 this year some 1300 FFMS employees are due to become Central Bank employees.

“This is not a mere technical project, it’s rather a brand new business model for the financial market”, said Shvetsov. “Thus, the change must be careful and non-revolutionary, in order for the market participants to safely adjust to new conditions. The industry must not be burdened with too much change at once. We will ultimately arrive at a new stable financial market”.

Naming reasons for the megaregulator, FFMS Head Dmitry Pankin stated that today’s major financial market players – VTB, Sberbank and others – are not mere banks. They own insurance groups and pension funds, they are stock market players. As a result, says Pankin, a financial group covers the entire scope of financial market services, reporting to several regulators: “the suit is all there, but the sleeves and the buttons are supervised by different authorities”. He noted that risks are generated across all sectors – banking, insurance, stock market, making it crucial for the regulator to see the complete picture and apply common regulation principles and approaches.

Another factor is FFMS resources and powers. “We have had to deal with extremely limited resources and a constantly expanding focus. Some 4 thousand companies are active in microfinance, same for credit unions, and we must build a regulation and oversight system in this sector. These are vital tasks, but where do we get the resources?”, said Pankin. According to him, the services’ headcount has been constantly diminishing, and is down to some 1300 today.

Evgenia Noskova

Financial markets megaregulator, Project Group №1