Center for Strategic Assessment and forecasts

Autonomous non-profit organization

Home / Economy and Finance / Markets: estimates and projections / Articles
Viktor Gerashchenko: "In place of the floor I would have asked for a gun and shot himself"
Material posted: Publication date: 19-12-2014

Today the former head of the Central Bank Victor Gerashchenko in an exclusive interview with "BUSINESS Online" stated the loss of control in the sphere of economy in Russia. Stating that he received a pension in rubles, he explained why he personally is not interested in news about the growth of the dollar and the Euro: he, like most of the population lives from hand to mouth and spends in rubles. The banker told who was "off his head", what are the main mistakes Elvira Nabiullina and why it is in place of the Russian authorities have long been returned to the restrictions on sales of foreign currency earnings.


— Victor Vladimirovich, you are probably aware of the latest developments in the country experiencing the shock of the situation with ruble and the devaluation, namely its collapse. How do you evaluate the current policy of the Central Bank? What are they doing wrong?

— What is happening now, brings me back to the poems of Vladimir Vysotsky, which are as follows: "In the Affairs of others keep out, I am very sad and hurt." But still... If you remember, to Nabiullina, the Central Bank was failing. He always sat and said nothing at all meetings, could not tell what position the Ministry of Finance and so on and so forth. 13 years at the Bank sat, silent. Performed once a year in the Duma with the report and all. But how was a strong, healthy, established team, got there only the speaker, who was also rude people-pushy, but he very much got there, so the Central Bank left... And she (Elvira Nabiullina — approx. ed.) has passed all stages in the Ministry of economy, and no progress in our economy there. Besides that all is well with the oil and gas — and because of the prices. It is sent to the Bank. This is just because in USA the woman was made Chairman of the Federal reserve Bank (Janet Yellen — approx. ed.)? But before that, she worked five years on the Board! What is this nonsense? Who does that? I'm not talking who was the Minister of defense and what we all ended...
You ask, what's wrong, so here goes: I don't know what they are doing is wrong. When in the morning, because I'm a morning person, get up early, then in the morning I watch the news, all of this discussion of course, when economists speak, saying the right things... I'm not interested in. Why? I receive their payments in rubles and spend in rubles abroad is not going to rest. My first time in the 6th grade in "Artek" was, then I neither Lebanon nor Singapore were useless! I'm on vacation in the winter went, and that is very rare.

So I buy currency don't care. Those who go to rest in Turkey, Egypt, worried, when they buy, how much it will cost, what currency to have, suddenly you will begin to evict the hotel from there and so on. Plus the majority of the population, I am sure, lives still from hand to mouth and spends in rubles. There are, of course, people who save, if you want to go to rest in the South somewhere. Children take, to show how tea grows, as in some advertising show and so on. Of course, they care.

And of course, if you're decent imports, especially food, for hard currency, then, of course, start to increase prices in stores.

— That's why people are excited!

— Yes. But traditional providers have thought up to themselves the sanctions. Of course, we begin to increase the amount of purchases in Asia, Turkey. This has an impact, but not a set of products, without which, I would say you cannot do. Want, of course, and orange child to give and something.

But more is done, in my opinion, from as though the press and television. It's just aggravating the situation and panic. There every month, it gets worse and worse. When you look at what topics are leading in 7 - 8 am affect, your head would've blown off! Some kind of private life has not developed, apparently, they have some ugliness... I Want to ask them: where are you pulling our country? We all, whether that is this life? Or is this typical? Maybe that is typical for stars of some, but screw them! So I'm not very becoming to the interviewee. I was driving, listening to nightingales I talked to our long basketball player...

— Mikhail Prokhorov, the oligarch?

— Yes, with Prokhorov. The surname is sometimes forgotten. Here he talks about costs, low productivity, about what we used raw material to trade and still it is not brought to the appropriate quality, some stupid taxes. What's the point? This what you need to say now?! Or that's what is discussed in Parliament the question of what to reduce drinking in this country have in the stores close to shelves with wine and vodka? That is, you come here and don't know what they have. You have half an hour to talk to the girl and ask what to eat? They're idiotic. So, in the Duma sit idiots that are willing to discuss.


— Victor Vladimirovich, I agree that all what only versions are not put forward, but they are fundamental. Or random. And explanations of recent developments no. Not one day did we find that our productivity is bad. How to stabilize the ruble exchange rate and whether you want to do? Or 100 rubles per Euro — is this normal?

— Firstly, to impose certain restrictions. At the time, was allowed to keep 50 percent of foreign exchange earnings to exporters in foreign currency accounts. In order not to lose, especially if they had to buy something to improve their products, any machines or something. Here they started to allow these foreign currency accounts. Then, when we started to improve things, had reached the point that 75 percent could be left in the Forex account. Why?! Then began the transfers through offshore companies, fearing a change of government. Then "Yeltsin's gang" was in power, I can not understand in the economy. Neoliberals, people have read too many books, but has never worked in any real economy nor we, nor abroad. Was afraid, began to offshore transfer. But now the whole world is fighting with offshore companies. Civilized countries, fearing that there are tools not only of the mafia, as before, Cuba was a country for American mafia. Now the whole world fighting it, fearing the creation of money any kind of extreme people from the Muslim faith.

By the way, when I came back from Singapore, went to a meeting with German banks. And here's Reagan declared: let us not supply the Soviet Union with gas turbine units to pump the gas. The Germans came and said that they also want to impose sanctions, as in the USA, although there is little that we bought. And they took and were brought to the Leningrad metal factory and showed what we do as gas turbine stations, although less efficient, as your not such power, but we do, and you will do what they can to increase exports. They came back, pressed the government and said, "fuck you!" And after the British the same as its told and sold us their units, to drive the gas.

I am sure that those sanctions that were declared under U.S. pressure, against local in country business community, and we don't really use it, although there are any objections. This should work!

"The Central Bank must fight inflation. It must not allow an excessive amount of money, and cashless. For a large number of cheap money does not create unnecessary boom"

— In addition to the restrictions?

— Secondly, it is necessary to deal with touts. Because we have a lot this case involves speculators. And we went through it. So, in 1998, sat down with our t-bills, while t-bills were absolutely the right direction. Went here foreigners, they translated the currency, buying rubles and made forward contracts — they were three or six months, these t-bills... Then got the RUB of the profit to buy the currency. And at first, this forward contract was done by the Central Bank. And then, as the amount increased, it shifted to commercial banks, which also was perfectly true. But! Since we in General was a huge inflation, there was no policy to prices often paid for these securities 200 percent per annum. It's terrible! And they have started their problems, and they have less to buy these t-bills. Same as 2008, when banks began to withdraw foreign currency deposits, small loans that was given — not because increased distrust, but because they begin to have problems in the West. They needed this money back.

Let us focus on the Central Bank's decision to raise rates. How do you assess this move?

Yeah, some say the second day, I upped the ante. And what loans you can give the companies to the substitution performed? By 17, by 20 percent?

And then they say that the Central Bank must fight inflation. Yes, he needs to fight, but how? It must not allow an excessive amount of money, and cashless. Cash is a trifle, they only serve the salary. In non-bulk, specific gravity... To a large number of cheap money does not create unnecessary boom. And that's all! And not something that the Central Bank is the main fighter against inflation. And inflation, which in 91-m to year we have reached thousands of percent, why? Because you prices are fully released and all. So I'm not sure...

— The Central Bank thus raised the value of money, to avoid speculation, isn't it?

Is like limits the value of money for speculators in the currency market, but you then take a closer look, and who manipulates you? He speculates, he buys the currency, because he needs to buy something to finish... Well I don't know the platform, which in the Arctic has oil to produce and we have some equipment there. And this in fact is!

I'd also like to note that we lost like the control, approach to management.... What is Medvedev, except that he is married to the daughter of the commander of the submarine from the Kronstadt, which she studied in school? He was engaged in the economy? No! He was in the legal Department with Sobchak And Sobchak... what a cumshot? Its the same under the court wanted to give for theft. The scandals were. And then the whole team, not to say gang, came to work here gradually. Dvorkovich is he a great economist?

— And still you said useless the Central Bank raised its key interest rate. So?

— I don't know... In these conditions it is important, I think, more. This is also not say, for example, if we take Western countries — the same Parliament. There are business people, Industrialists, financiers, or lawyers work. And we basically gymnasts, goalies hockey team and other athletes or artists. What to do in the Duma?

— What would you do Nabiullina, if there were in CB?

— I would have asked for a gun and shot himself.

Seriously? I think you could have prevented such. Whatever advice you gave Nabiullina?

— I still don't want her to lash out, to criticize. There is a big coincidence. In my opinion, advisers, probably too many... it will be Hard, of course. The more that she began to shake up shots... Although people she knows. When I came the first time, only one person retired and only two years because I was tired of him. I asked him: why and how? And he says to me: "your dad did, you do not worry." And I said, "you Know, what did you explain how it works." I got bored and I sent him to retirement. And so I worked with the old employees.

As for tips, you understand my position — I don't stick my nose where it is not necessary.


Elena Kolbasina, Alexander Gavrilenko


RELATED MATERIALS: Economy and Finance