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. Last Updated: 07/27/2016

Big Business Weighs In On Central Bank's Role

A new force is taking a stand in the battle over bank regulation.

The Russian Union of Industrialists and Entrepreneurs, or RSPP, met Friday to formulate its position on whether the Central Bank should be stripped of its supervisory powers.

The Central Bank has recently faced sharp criticism from banks and politicians, who have lambasted the perceived arbitrariness of its enforcement decisions. The RSPP now looks to be acting as a mediator to help maintain the status quo.

"There is going to be no revolution at the Central Bank," RSPP vice president Alexander Murychev said at a news conference before the meeting. "The licensing and oversight departments have to remain in the Central Bank. It is essential to preserve the professional strength of these departments."

This viewpoint is a sharp departure from the opinions voiced last month in a State Duma session devoted to the Central Bank.

Vladislav Reznik, chairman of the Duma's banking committee, told the assembly that the Central Bank has been revoking banks' licenses on "trumped-up grounds," and should consequently be denied its powers to enforce the law.

Murychev named two organizations most likely to play a regulatory role in overseeing the entire financial sector. These were the Banking Oversight Committee --the Central Bank's main regulatory organ -- and the National Banking Council -- a group of twelve influential Duma deputies and federal agency heads.

"It must be one or the other," Murychev said.

Murychev said the RSPP's stand would be based on the one mapped out this month by Dmitry Tulin, a former deputy head of the Central Bank, who has been one of the main advocates of retaining the Central Bank's power of enforcement and licensing.

"Over the course of many years, the entrepreneurs who work in the shadows of the [financial] sector have developed political connections and, of course, have lobbyists in all branches of power," Tulin wrote in an op-ed piece for Vremya Novostei on March 15. "This 'tradition' cannot but influence lawmakers' approach to the problems of banking oversight."

A Moscow-based banking analyst that asked not to be named also said that the recent onslaught against the Central Bank has been an attempt on the part of various political interests to gain more control over banks.

Duma deputies "are snatching at the Central Bank's power, which has so far been pretty absolute," the source said.

As of late Sunday, there had been no announcements on the outcome of the meeting and none of the attendants could be reached for comment.

Top officials from all of Russia's financial oversight agencies and some of Russia's biggest banks were set to attend. However, Murychev said Thursday that Reznik, the Central Bank's harshest critic in the Duma, "had not yet agreed to come."

The position adopted Friday will be presented next month to the RSPP's board of directors. If approved, the lobby will "put its whole weight behind it," Murychev said.