Russian central bank raises independence concerns - agency

Wed Feb 27, 2013 8:10am EST

* Pushback against government representatives on board

* Hawkish central bank under pressure to boost economy

* Regulatory overhaul poses institutional threat

* Putin eyes successor to retiring chairman

MOSCOW, Feb 27 (Reuters) - The independence of Russia's central bank could be undermined if government officials take part in the deliberations of its policy-making board, a central banking source was quoted on Wednesday as saying.

The Bank of Russia is under pressure this year over its determination to keep fighting inflation as the economy slows and plans to create a unified financial markets 'mega-regulator' under its roof could also raise risks.

As part of the overhaul, the government is seeking greater representation on the central bank's board. Its assurance that this would not impinge on the central bank's monetary policy independence met a sceptical response.

"Let's assume that a government representative is on the board of directors as a fully-fledged member. Could that be construed as a sign of dependence?" the unnamed central banker told financial newswire Prime. "Probably, it could."

The comments reflected growing unease at the central bank as President Vladimir Putin weighs whether to select a hawkish insider to succeed Sergei Ignatyev, who retires as chairman in June, or back a pro-growth outsider.

While the central bank does not enjoy as much independence as its Western counterparts, the liberal team that has run it during Putin's 13-year-old rule has won the respect of investors for driving inflation down into the mid-single digits.

Speculation has mounted that Putin may spurn candidates who share Ignatyev's orthodox views in favour of a new chairman who would pull out the stops to revive economic growth that, latest data show, is slowing sharply.

Officials have denied that Sergei Glazyev, an economist and Putin adviser who has accused the West of seeking to turn Russia into an economic colony, is a candidate for the top job at the central bank.

But one economist who visited the central bank on Wednesday described it in a note to clients as suffering from a "transition-related institutional vacuum."

"The CBR is concerned about the recent rumours about the possible appointment of Sergei Glazyev ... although it clearly hopes that the decision will ultimately ensure continuity," Renaissance Capital's Russia economist Ivan Tchakarov wrote.

Sources say that, of the candidates who would represent continuity, Ignatyev's deputies Alexei Ulyukayev and Sergei Shvetsov are under serious consideration, as is former Finance Minister Mikhail Zadornov, now head of retail bank VTB 24.