CENTRAL BANK CHIEF RUMORED TO BE IN POLITICAL TROUBLE.

Moscow is awash with rumors that the government is poised to fire Viktor Gerashchenko, head of Russia’s Central Bank. The Finance Ministry has criticized the fact that the ruble’s value against the dollar has risen 10 percent since the beginning of the year, which has made imported products cheaper and thus reduced demand for Russian products, resulting both in a slowdown in industrial production and in the economy as a whole. According to unnamed sources in the presidential administration, the Kremlin is considering various candidates to replace Gerashchenko, including Andre Kostin, head of Vneshekonombank, Oleg Vyugin, vice president of the investment company Troika Dialog, and Vladimir Kogan, head of Promstroibank and president of the holding Banker’s House St. Petersburg. Kogan has been talked up lately as the new powerful Kremlin insider–or, as some observers have put it, the “new Berezovsky.” On the other hand, Deputy Prime Minister Aleksei Kudrin said today that the government is not discussing Gerashchenko’s removal. The chief banker is set to attend a meeting today with Putin, Prime Minister Mikhail Kasyanov and Foreign Minister Igor Ivanov (Russian agencies, October 12-13).

But while Gerashchenko’s position may not be immediately threatened, Putin is considering measures which would reduce the Central Bank’s independence from the executive branch. The Russian president has suggested transforming the bank, along with its assets, into a “federal state institution” and that the law governing the Central Bank should be changed so as to reduce its control of such state institutions as Sberbank and Vneshtorgbank. Putin has also said that the benefits enjoyed by Central Bank employees, who have much higher salaries, pensions and more generous health benefits than other state bureaucrats, should be examined. The State Duma, led by the Communist Party faction, is considering legislation that would reduce the Central Bank’s independence (Nezavismaya gazeta, October 11). Both Gerashchenko and his predecessor, Sergei Dubinin, have spoken out against such possible moves.

GUSINSKY’S LAWYER ADVISES HIM NOT TO RETURN TO MOSCOW.