Return of the Wild East?

Whom did Andrei Kozlov upset? Russia’s central banker, who spearheaded efforts to clean up the banking sector and put an end to money laundering, was gunned down in a contract hit on Wednesday and died of his injuries yesterday. 

At the central bank, Mr. Kozlov had been responsible for pushing the chaotic banking sector here through a transition from a fragmented and opaque industry serving wealthy businessmen to one able to accommodate retail customers from a middle class growing with the trickle-down impact of oil money.

Those reforms had largely stalled amid opposition from politically connected banks, known as the “pocket banks” of the oligarchs. Many are risky places for retail customers because much of their lending portfolio is tied up with a single business, that of their oligarch owner, the collapse of which would bring down the bank. Mr. Kozlov was responsible for closing banks deemed insolvent…

Kozlov closed dozens of Russian banks in the last few years and was well-respected in Western financial circles for his efforts to bring more transparency to the banking sector. The Kremlin has put together a large investigation team, but as political assassinations such as this are rarely solved in Russia, perhaps observers would do well to simply watch whether the Central Bank cools its enthusiasm for Kozlov’s anti-corruption drive or whether a bank under threat of closure now escapes the radar.