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. Last Updated: 07/27/2016

Fischer Takes Russian Experience to Citigroup

If President Vladimir Putin offers you a job, the saying goes, you should probably take it.

But Stanley Fischer didn't -- and Moscow's financial elite hopes Russia will be better off for it.

The reason? Fischer this month was named vice chairman of the United States' largest bank, Citigroup Inc. And it is hoped that having such a prominent expert on the Russian economy working from the commanding heights of global finance will help attract more attention -- and investment -- to the country.

The former first deputy managing director of the International Monetary Fund, Fischer played a key role in Moscow's post-Soviet financial drama: He personally negotiated nearly all of the billions of dollars in loans Russia borrowed from the IMF between 1993 and 1997. He also warned the government in 1998 of the impending financial crisis and consulted on its default plan, announced Aug. 17.

And although there is still much bitterness over the policies of -- and Russia's debt to -- the IMF, Fischer is treated warmly in Moscow. Last year, on his last visit as the fund's No. 2 official, he met with Putin for an hour, and, according to those present, the president was so impressed by Fischer's knowledge of Russia he offered him a job in Moscow.

"We are always glad to see you in our country. If you would like to move from the IMF to Moscow, we can look at various options," Putin said.

Citigroup said last week it was early to grant interviews with Fischer or comment on whether his appointment signaled a more robust interest in Russia.

"He will play an important role in better positioning Citigroup to take advantage of opportunities with governments and corporations in both the developed and emerging markets," the company said in a statement.

Those in Moscow who know Fischer, however, see his new position as a positive development for Russia.

"Fischer's appointment may be a reflection that Citibank is looking very positively at Russia itself," said Martin Gilman, the IMF's chief representative in Russia between 1997 and 2000 and now a professor at Moscow's Higher School of Economics.

With assets of $1.3 billion as of Oct. 1, Citibank T/O is the largest foreign bank in Russia and 11th overall, according to the Interfax Rating Agency. It also is the leader in lending volumes among foreign banks, with $581 million in outstanding loans to Russian companies.

"Fischer has always had a personal and professional interest in Russia, and just because he went to work for Citigroup does not mean that that will change," said Allan Hirst, Citibank's chief for Russia and the Commonwealth of Independent States. "[Even before] Fischer's appointment, we had decided to increase our activities in Russia, and we plan to launch retail operations sometime later this year," Hirst said.

"Citibank is well-known for its aggressive development in many countries in the world, and Russia's turn will come sooner or later," said Oleg Vyugin, chief economist at Troika Dialog who worked closely with Fischer when he was the Finance Ministry's point man for negotiating with international financial organizations in 1996-99. "When that time comes, Fischer, with his unique knowledge of both developed and emerging economies, will be in the right place to help both Citibank and Russia," he said.

That time may have already come.

Prime Minister Mikhail Kasyanov met with Fischer at the World Economic Forum in New York two weeks ago. The two reportedly discussed Citibank's possible participation in the privatization of Vneshtorgbank.

Fischer is scheduled to return to Moscow to participate in an annual economic conference organized by the Higher School of Economics in April, Gilman said.