Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Securities Chief Says He Resigned in Protest

Dmitry Vasilyev, the head of the Federal Securities Commission, said Monday he had offered his resignation to protest what he said were the government's mistakes in dealing with the economic crisis.

"My main aim is to draw public attention to some of the fundamental economic problems that face the country in connection with the [government's] proposed and declared measures," he said at a news conference at Interfax headquarters in downtown Moscow.

Although President Boris Yeltsin has not yet accepted Vasilyev's resignation, market participants saw it as a fait accompli Monday and lamented Vasilyev's departure.

On Friday, it was reported that Vasilyev, like First Deputy Prime Minister Alexander Shokhin, had resigned to protest the inclusion of Mikhail Zadornov in the Cabinet. Vasilyev, however, said he was more concerned with the economic steps taken than with individuals. He laid out a point-by-point critique of the measures being discussed by the government and the Central Bank.

The government's biggest mistake was sticking to the Aug. 17 decision to default on domestic debt, Vasilyev said. "We must finally abolish everything connected with ? Aug. 17," he said. "We must conduct civilized talks with [Russian and foreign] investors on a basis of equality."

Vasilyev also warned against trying to impose artificial restrictions on the value of the ruble, saying this would lead to a black market in foreign exchange.

"If we get a multitude of exchange rates we will scare away a lot of investors," he said. "Russian investors, not to speak of foreign ones, simply will not participate."

Vasilyev, who has worked closely with foreign advisers on setting up and regulating Russia's securities market, criticized the International Monetary Fund's role in Russia, saying the organization focused on the wrong requirements when it agreed to a multimillion-dollar bailout package for Russia in June.

"It is obvious that the challenge facing Russia is not to increase the tax burden, but to simplify the tax system and relieve the tax burden," he said, adding that China had benefited greatly from foreign investment because of low taxation.

Players on the Russian capital markets were sorry to see Vasilyev go. They credited him with being one of the government's strongest defenders of shareholders' rights."It's a very sad day for the Russian securities market," said Daniel Wolfe, chief operating officer for Troika-Dialog investment bank. "On the other hand, it's a welcome sight to see a politician take a principled stand."

Katya Malofeeva, an economist at MFK Renaissance, called the resignation "a very unfortunate development."

"The securities market developed under his tenure from almost zero to what could be called an efficient market," she said.

The Federal Securities Commission was created in the wake of the collapse of the MMM pyramid scheme, which defrauded Russians out of millions of dollars.

Earlier this year, the FSC clashed with two of Russia's so-called oligarchs, challenging Sidanko and Yukos over alleged violations of shareholders' rights at the oil companies controlled by Vladimir Potanin and Mikhail Khodorkovsky.