Head of the Bank of Russia Elvira Nabiullina celebrates her anniversary: ​​digitalization, conspiracy theories, brooches

Chairman of the Central Bank Elvira Nabiullina celebrates her 60th birthday on October 29. She can be considered an old-timer in the corridors of power: she has been at the head of the Bank of Russia for over 10 years, and she began her career in the corridors of power even earlier – in the late 90s. At the same time, it is unlikely that there will be at least one other equally often criticized character in power: neither gender nor age can save Nabiullina from the blasphemy of her opponents. It is traditionally accused of liberalism, of serving the “world behind the scenes”, of unwillingness to fix the ruble exchange rate, distribute cheap loans and print unsecured banknotes. But the Central Bank team under her leadership stubbornly adheres to its line of free floating of the ruble and inflation targeting. “MK” recalls the most striking stages of the career, achievements and failures of the head of the financial mega-regulator “MK”.

Stages of the long journey

The future main banker of the country was born in Ufa in 1963. Her father was a driver, and her mother worked as an operator at an instrument-making plant. At school, Elya was an excellent student. Classmates always noted her erudition, determination and diversity of interests. She also graduated from music school with a degree in piano. As a teenager, she was fond of the works of Anna Akhmatova and Sasha Cherny. Classmates recalled that she also attended a theater studio for pantomime class.

After brilliantly completing school, a young girl from the outback set off to conquer Moscow. In the capital, she graduated with honors from the Faculty of Economics of Moscow State University and entered graduate school, where she completed her studies in 1990 with the defense of her dissertation. But during the years of intensive study, she did not forget about her personal life. Elvira married a young teacher, Yaroslav Kuzminov, who lectured at the department of history of economic doctrines and national economy, and later became famous as the founder and long-term rector of the Higher School of Economics, which became one of the most advanced and prestigious universities in the country. In 1988, their son Vasily was born.

Since 1991, Nabiullina began working as the chief specialist of the Scientific-Industrial Union of the USSR on economic reform – this was the name of the predecessor organization of the Russian Union of Industrialists and Entrepreneurs (RSPP). In 1994, she moved from the position of adviser to the Expert Institute of the Russian Union of Industrialists and Entrepreneurs to the Russian Ministry of Economy, where she began her career as the head of the department of state regulation of the economy, and by 1997 she had risen to the rank of deputy minister of this department. From 1999 to 2000, Nabiullina worked as vice president of the Center for Strategic Research (CSR) foundation, which was headed by German Gref, at that time the main economic reformer in Vladimir Putin’s team. In 2000-2003, Elvira Nabiullina was the First Deputy Minister of Economic Development and Trade of the Russian Federation, who was then also German Gref. She will then head the Center for Social Research, where she will work until 2005. In 2007, Nabiullina became the Minister of Economic Development and Trade, and from May 2008 to May 2012 she headed the Ministry of Economic Development, which was transformed from the Ministry of Economic Development and Trade. Then, for a little over a year, she was an assistant to the president, and from June 24, 2013, Elvira Nabiullina headed the Bank of Russia for the first time, after which in 2017 and 2022 her powers to represent the president of the country were extended by the State Duma.

Digitalization against sanctions

However, she was never able to calmly lead the “Ministry of Banks,” as the Central Bank of the Russian Federation is often called. The level of challenges and complexity of tasks solved in this position have always been extremely high. Almost immediately after Nabiullina’s appointment, another financial crisis occurred. After the annexation of Crimea in 2014, Russia faced sensitive sanctions for the first time; in addition, the price of a barrel of oil fell on the market. Nabiullina’s team made an unexpected move for that period: it immediately increased the key rate to 17%. The exchange rate and the economy as a whole were stabilized. In parallel, that year the weaknesses of the Russian payment market were revealed. Thus, in March 2014, the Visa and MasterCard systems suddenly stopped servicing cards of four large Russian banks, against whose shareholders the United States imposed sanctions. At the same time, there was no alternative to two foreign payment systems, which were actually monopolies on the Russian market. And then Nabiullina, together with her team, begins to build the National Payment Card System (NSCP) and supports the launch of the domestic MIR card. All domestic transactions on Visa and MasterCard cards are transferred to NSPK processing. This is precisely what, in March 2022, after the West has imposed “nuclear” sanctions, will not allow foreign payment systems to paralyze the operation of their cards within Russia. It is not surprising that in 2015, Elvira Nabiullina was recognized as the best head of the Central Bank in the world according to Euromoney, a publication that has been selecting the most professional financial manager for 30 years. She was awarded this title for resisting the “macroeconomic storm” in Russia.

In general, the scale of digitalization carried out by the Bank of Russia under the leadership of Nabiullina can be called historical. The Faster Payment System (FPS) was launched, transfers were made easier, the e-wallet market flourished, and large banks appeared that built their business model on the “lack of branches.” All these transformations will be very useful during the coronavirus pandemic, when half of the country will be forced to live in self-isolation. The next test came in February 2022, when an unprecedented number of sanctions fell on Russia, and the authorities of Western countries deliberately tried to cause maximum harm to the financial sector. However, the competent actions of the Central Bank of the Russian Federation prevented a crisis. Let us recall that at the end of February last year, the regulator raised the rate to a record 20%, introduced strict measures of foreign exchange control and then gradually, as the situation stabilized, lowered the key rate and weakened foreign exchange controls. Thanks to this, it was possible to prevent withdrawals of money from banks, and the dollar exchange rate dropped from 120 rubles per dollar in March to 60 rubles per unit of American currency by mid-summer 2022.

Under the arrows of ill-wishers

However, despite all its achievements, the Bank of Russia can probably be called the most criticized government agency in our country, and complaints about its work often have an almost conspiracy-theological connotation. Thus, in November 2014, mass discontent was caused by the decision of the Central Bank of the Russian Federation to send the ruble to free float, that is, the regulator’s refusal to control the exchange rate of our currency. On one of the days of the then crisis, the exchange rate of the American currency reached 80 rubles, and the euro rose to 100 rubles. Although at the beginning of the same 2014, the dollar was trading at 35 rubles, and the euro at 48. Of course, talk immediately arose that “this is a deliberate policy” that should worsen the situation in Russia. However, unsubstantiated talk died down when the national currency was stabilized, and economists began to explain in unison that the financial crisis in that period in any case could not have been avoided for reasons beyond the control of the Central Bank of the Russian Federation.

The next wave of discontent was provoked by the global recognition of Elvira Nabiullina, which was expressed by her being awarded the title of best head of a financial regulator by Euromoney magazine. Evil tongues began to argue that since the West is praising someone against the backdrop of a sharp cooling in relations with Russia, then this is “for a reason.” Adding fuel to the fire of these rumors was the fact that unfriendly states did not impose sanctions against the head of the Bank of Russia for a long time. True, this still happened in September 2022, and in the United States and Great Britain Nabiullina was blamed for protecting the Kremlin from the consequences of sanctions since 2014. After which the conspiracy theorists had to shut up, because few of the current Russian ministers in the West were accused of such harsh language.

At the same time, the financial sector in Russia continues to develop today, despite all the difficulties encountered due to sanctions. In particular, the Central Bank of the Russian Federation has not abandoned plans to introduce a digital ruble in our country and is already conducting pilot testing of this “third form of money.”

“Madame Broshkina”

Due to the harshness of the policy of the head of the Bank of Russia, many consider his chairman to be a kind of “general in a skirt” or a “ministerial biscuit”, that is, a political functionary to whom all emotions are alien. But here, too, the skeptics are wrong, because it was Elvira Nabiullina who introduced the fashion for brooches when the entire market was trying to guess the vector of the regulator’s policy on accessories that adorned her clothes at press conferences at the key rate.

For cautious financiers, direct statements from the Central Bank have never been enough. They constantly wanted to read “between the lines” and catch any hints from the regulator. Therefore, Elvira Nabiullina’s statement, made in calmer times, that she chooses brooches for her costumes not by chance, but in accordance with the “situation and mood,” came at just the right time. She played this entertaining game with journalists and observers even during the pandemic. Most often the symbols were clear. For example, in April 2020, the jacket of the head of the Central Bank was decorated with an accessory in the shape of a house, hinting at the call to “stay at home”, relevant in connection with coronavirus restrictions. But there were also episodes that made even experienced observers scratch their heads. For example, on October 23, 2020, the Central Bank of the Russian Federation left the key rate at 4.25% for the second time in a row. The head of the Bank of Russia appeared at a press conference with a brooch in the shape of a wave. Some said then that this was a symbol of the wave-like process of recovery of the Russian economy, others saw a connection with the autumn wave of the spread of COVID-19.

There were also funny stories. So, at the last meeting of the regulator in 2021, held on December 17, the rate reached 8.5%, and Nabiullina’s jacket was decorated with a brooch in the shape of the Nutcracker. Analysts unanimously decided that the inflation “nut” turned out to be “tight,” but the regulator has the tools to “crack” it. But after the start of the special operation, all these “games” and “hints” became a thing of the past: the head of the Central Bank completely abandoned them. The only exception was one event, which immediately attracted attention. On October 17, 2023, Elvira Nabiullina decorated the lapel of her jacket for the first time in a long time, though not with a brooch, but with a badge of a participant in the “One Belt, One Road” forum. The photo was posted by journalists from the Kremlin pool, but the amazing detail in the image became the subject of discussion in society and the press.

The anniversary milestone that Nabiullina reached is considered the retirement age in our country, but Elvira Sakhipzadovna is clearly not going to take a well-deserved rest and will obviously continue to give reasons for criticism and admiration to officials, businessmen, and ordinary citizens for a long time to come.