Publication: Monitor Volume: 3 Issue: 46

Prime Minister Viktor Chernomyrdin and Presidential Chief of Staff Anatoly Chubais held a series of meetings on March 4 with the heads of Moscow’s leading financial institutions to discuss the relationship between the banks and the government. (Interfax, March 5) The bankers apparently sought and received assurances that neither the leadership nor the government has any intention of "changing course." In exchange, the bankers agreed to Russian Central Bank chairman Sergei Dubinin’s request that the commercial banks take the lead in purchasing treasury bills with maturities longer than one year, in order to help reduce interest rates and the government’s debt-servicing costs. (Concerns about reducing the debt-servicing burden were also apparent in a March 5 cabinet decision charging the Central Bank and Finance Ministry with improving procedures for treasury bill sales and repurchases.)

The meetings underscored the influence of Moscow’s leading bankers. In addition to financing Boris Yeltsin’s presidential re-election in 1996, they direct institutions that last year controlled some 70 percent of the Russian economy’s credit supply. Although these banks are largely owned by the state, and their large treasury-bill portfolios leave them heavily exposed to changes in government policy, the government nonetheless relies heavily on Moscow’s leading bankers for support. This fact was apparently underscored during these meetings by a request from Chubais that the bankers help the government pay down wage and pension arrears. The banks are also viewed as the chief advocates for Chubais’s formal return to government in the widely-anticipated government shake-up. (See above) In addition to Chubais, Chernomyrdin, and Dubinin, other government officials present at these meetings included First Deputy Prime Minister Vladimir Potanin — himself the former General Director of Oneksimbank, one of Russia’s largest financial institutions — and Finance Minister Alexander Livshits.

Four Russian Journalists, not Two, Kidnapped in Chechnya.