CEE architects of transition: Viktor Gerashchenko


Lucy Fitzgeorge-Parker
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Viktor Gerashchenko served as chairman of the Gosbank from 1989 to December 1991 and head of the central bank of Russia from 1992 to 1994 and 1998 to 2002. He was chairman of International Bank of Moscow from 1996 to 1998 and Russia’s IMF representative 1998 to 2000. He was elected to the State Duma in 2003.




To many western economists, Viktor Gerashchenko was a conservative who held Russia back during its transition to a market economy. 

As the last chairman of Gosbank, the central bank of the Soviet Union, and the second head of its Russian replacement, he was blamed for failing to subscribe to western monetary policy orthodoxy and stoking hyper-inflation. US economist Jeffrey Sachs, who himself came in for criticism for his role in reforming Russia after the end of the Soviet Union, famously referred to him as “the world’s worst central banker”.

Bankers who worked with him during his time at International Moscow Bank in the mid 1990s, however, have great respect for their former boss. He is also fondly remembered by ordinary Russians, to whom he endeared himself during several forays into politics through his dry wit and trenchant criticism of the Kremlin. 

At 81, long since retired and living in his dacha in an idyllic spot in north Moscow, Gerashchenko has lost none of his sense of humour. His memory, however is less good – or perhaps it would be fairer to say that he has simply no wish to revisit his illustrious central banking career.

When Euromoney asks about the 1998 Russia crisis, when Gerashchenko was called back to the central bank for the fourth time, he politely declines the question. 

“I don’t want to get involved in discussions of what was done right and what was done wrong,” he says. “When you leave, you should leave. There’s no point in raking over the past.”

What he is happy to talk about is the time he spent abroad during the 1960s and 1970s working for the Soviet Union’s various international banking outposts. 

After starting his career at Gosbank, where his father had been deputy chairman during the Stalin era, Gerashchenko went to London in 1965 to work for Moscow Narodny Bank (MNB). Stints in Beirut and Frankfurt followed; then in 1977 he was sent to Singapore to clean up the local branch of MNB. 

“The bank was facing losses of $500 million and the board member responsible for its foreign operations was on trial in the Soviet Union,” Gerashchenko recalls. “I am very proud of the work I did there. That was the greatest achievement of my career.”


In 1982 he returned to the Soviet Union as deputy chairman of Vneshtorgbank – the forerunner of VTB – before being promoted to chairman of Gosbank in 1989. Apart from a three-day hiatus in August 1991, he remained in post until the Soviet central bank was dissolved in December of that year. 

Eleven months later he was back as head of the new Russian central bank, where he again lasted two years before being forced out after the mini economic crisis of 1994. Gerashchenko says his international background stood him in good stead during these years. 

“It gave me valuable experience in working with foreign banking communities and taught me about proper banking,” he says. 

He contrasts this with other key players in the early days of transition: “Many of the people who emerged at that time had a good education but no real business experience. They only knew about things from books.”

When you leave, you should leave. There’s no point raking over the past
 - Viktor Gerashchenko

In this category he includes both western advisers such as Sachs – “he wasn’t my cup of tea” – and local politicians such as Boris Fyodorov, who served as finance minister in the early 1990s. 

“He was well-suited to be an academic, but not to be in charge of the ministry of finance,” he says.

He has kinder words for Fyodorov’s boss, Viktor Chernomyrdin – “he knew business, he was the right man in the right position” – but is scathing about Boris Yeltsin. 

“He was a bad person for our development,” he says. “He had some power, but it was in his hands, not his brain.”


After two years as chairman of International Moscow Bank, a joint venture between the Russian government and a clutch of international lenders, Gerashchenko returned to the central bank in September 1998. 

Again, he faced criticism during his four-year stint as governor for failing to prevent asset stripping by banks in the wake of the crisis and allowing hundreds of zombie banks to remain in operation

At the time of his departure in 2002, rumour suggested he had been forced out by new president Vladimir Putin. Gerashchenko remembers it differently. 

“I was fed up with the way things were going and I asked Putin to let me step down,” he says. “He wasn’t pleased; he thought I was deserting him.”

Gerashchenko was elected to the Duma in 2003 for the opposition Rodina party and ran against Putin for president in 2004. 

Today, he has retired from public life – but, as he points out, he has not been forgotten. He received an invitation to attend the IMF meeting in Washington this year, he tells Euromoney.