Change at the head of the Bank of Russia - bank reforms gaining ground?

Even though growth and signs of stability have been apparent in the Russian economy in recent years, under-capitalisation, privatisation deficits and Russian banks' tendency to grant short-term loans still offer grounds for criticism and lend weight to the demands for far-reaching bank reforms. In order to get the reform process in the Russian banking system moving, specific changes in central banking law were unavoidable. Simultaneously, the debate about the amendment of the central banking law led to an earlier change at the head of the central bank that was no doubt welcomed by President Vladimir Putin, his economic advisors, office-holders in the presidential administration and the relevant departments. In her article, Dr. Josephine Bollinger-Kanne, Eastern Europe expert, Munich, analyses the corrections of the central bank law that took effect in July 2002. It remains to be seen whether the reform of the Russian banking sector introduced or conceived by the new legislation will help establish the banks as funding negotiators between individual economic sectors.