RUSSIAN GOVERNMENT MOVES TO TIGHTEN CONTROL OVER FINANCIAL MARKETS.

In the wake of the September 15 meeting at which President Boris Yeltsin called for an end to the "bank wars" (see Monitor, September 16), a series of decrees have been issued strengthening the role of state institutions in revenue collection and market regulation.

On September 16 Yeltsin signed a decree creating a national depositary system for the shares of private companies, to come into effect from January 1, 1998. The depositary will be under the control of the Federal Securities Commission (FSC) and not the Central Bank. The FSC will also be responsible for protecting shareholders’ rights. Over the past two years there have been a number of scandals surrounding the operations of the privately-owned registries which hold share certificates, causing grave concern among would-be foreign investors. Even under the new system, however, it is likely that the existing private depositaries (the largest of which is owned by Oneksimbank) will continue to operate under license from the FSC. Central Bank chief Sergei Dubinin was averse to giving more power to Dmitry Vasilev’s securities commission. It is thought that Anatoly Chubais backed Dubinin and not Vasiliev in this argument: this decree is thus seen as a setback for Chubais. (Ekspert, September 22)

The second decree strikes at the commercial banks’ lucrative role in handling federal budget revenues. By December 1 all the State Customs Committee’s accounts, currently held by Mosbiznesbank and Oneksimbank, will be transferred to the Central Bank — a financial blow for these banks, since the sums involved amount to 5.5 trillion rubles ($1 billion) a month. Commercial banks will continue to hold the accounts of regional customs authorities (because the Central Bank lacks an adequate regional network), but the right to handle these accounts will be auctioned from the start of next year. (Kommersant-daily, September 17)

Yeltsin Calls for Stronger State Role in the Economy.