Igor Shuvalov defended his doctoral dissertation

The head of VEB.RF, Igor Shuvalov, today, September 19, defended his doctoral dissertation on the topic “Legal regulation of entrepreneurial activity during the socio-economic crisis (theory and practice)”. In his paper, he stated that the current regulation of the banking sector could provoke the emergence of a “so-called latent crisis.” According to Mr. Shuvalov, it makes sense to review the mechanism of supervision over the sector.

In the chapter on supervision of banks during crisis periods, the head of VEB.RF considers the crises of 2008, 2014 and 2020. They are associated with the low quality of assets owned by banks. Igor Shuvalov recalled that in 2008 Globex Bank lost its solvency and was bought by Vnesheconombank for a symbolic sum. Subsequently, VEB repeatedly tried to sell Globex, but failed.

“Starting from mid-2009 until early 2014, the Russian economy was gradually recovering, but the crisis of 2014 again revealed the poor quality of supervision, which resulted in the collapse of two reputable banks in 2017 – Binbank and the largest private Russian bank Otkritie. For several years, both banks have been implementing a development strategy based on the absorption of other banks, which each time required obtaining permission from the regulator, ”wrote the head of VEB (quoted from RBC).

In his work, he noted that the massive wave of revocation of licenses from commercial banks, which began in 2013, in his opinion, led only to negative consequences. In the same year, amendments were made to the federal law “On the Central Bank” aimed at introducing a risk-based approach, “however, according to statistics, 50% of cases of revocation of licenses from banks over the next few years are due to the loss of assets or liquidity of a credit institution” .

In defending his dissertation, Mr. Shuvalov said that in many countries, central banks and the executive branch are jointly responsible for economic growth. However, this is not the case in Russia. “When any crisis unfolds, the number one question always arises – what to do with the financial sector as a whole. There is always a lot of criticism about this, and without going into the political aspects of this activity, I can say that the legislation of the Russian Federation on the Central Bank and banks is structured in such a way that it is separated from specific borrowers,” the head of VEB.RF believes.

Igor Shuvalov defended his dissertation at the Institute of Legislation and Comparative Law under the Government of the Russian Federation. The director of the institute, academician of the Russian Academy of Sciences, Taliya Khabrieva, acted as the scientific supervisor. In addition to the banking system, the scientific work of the head of VEB.RF considers the regulation of business relations, the role of the institution of bankruptcy in a crisis, the regulation of public-private partnerships, investment activities, energy resources, mechanisms to support entrepreneurs, etc.

Daria Erozbek