* 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 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
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.