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FFMS Stands For Creating Agency At Central Bank In Frames Of Megaregulator Building

06.11.2012 20:01 / Interfax

Head of the Federal Financial Markets Service (FFMS) Dmitry Pankin stands for creating a special agency at the Central Bank of Russia in frames of the reform on regulating and supervising financial markets.

Pankin spoke out his proposal at the meeting of the open government on Tuesday. He noticed, the FFMS position seriously differs from the Bank of Russia that stands for the Service’s integration into the Central Bank, “but there are a number of special moments.”

Pankin agreed that today we see a present tendency towards consolidation of control at the financial market, including the problem of the regulatory arbitrage. Meanwhile, he noticed that the main problem lays in the number and content of the FFMS personnel that doesn’t satisfy the volume of those functions the Service is in charge of.

The FFMS Head explained that today the Service’s personnel numbers about 1,5 thousand people; it is planned to fire 200 employees, but the FFMS will take control over 5,000 additional institutions – micro financial organizations and credit cooperative societies. “We have lots of current work,” Pankin said focusing on the fact that the Service has only 5-6 persons who are capable to compose regulatory documents, though we know that the Service has “a great task of creating the International Financial Centre”.

He believes, in frames of integrating into the Central Bank of Russia it is possible to solve a problem of the restricted personnel number and work optimization. However, he noticed that he considers the variant of building the Agency at the Central Bank of Russia as the best. The FFMS Head explained that today a number of the FFMS’s functions seriously differ from the Central Bank’s functions; particularly, the Service has non-prudential functions, such as imposing fines and registration of securities emissions. According to him, if we just add the FFMS’s functions to the Central Bank, we will get an “organizational collapse”.

He noticed that the Agency’s council that will include the Agency’s head as well as the Head of the Central Bank and the governmental representative should be created at the moment of introducing the Agency at the Central Bank of Russia. “This may become a key body providing interaction between the Agency and the Central Bank,” he said. Moreover, he suggested the idea for the Agency’s head to be the first Deputy Chairman of the Central Bank. “Such a structure will be functionally operative during the upcoming years. Its main goal will be revolutionizing the legislative system. Only after this we’ll be able to talk about integration into the Central Bank,” Pankin declared. Mikhail Abyzov, Minister for Open Government Affairs, noticed that the Government should see the analysis of all suggested variants of the regulatory and supervisory reform at the financial market. Today three options are being studied: the FFMS’s reinforcement, creation of the Agency at the Central Bank of Russia and total integration of the FFMS into the Central Bank.

Financial markets megaregulatorProject Group №1Mikhail AbyzovDmitry Pankin