Valery Miroshnikov: Why Russians Started Trusting Their Banks

Biography

Valery Miroshnikov is a banking manager with a narrow specialization. He is among the originators of the legislative regulation of banking activities in the Russian Federation and the improvement of the stability of the entire financial system. With the active participation of Valery Miroshnikov, the country has built reliable and in-demand tools to ensure the security of bank investments.

Table of Contents:

• Valery Miroshnikov: Biography
• Adaptation in Banking
• Miroshnikov Valery: The Goal of Financial Institution Recovery
• Valery Miroshnikov: Work in the Crisis Year of 1998
• Valery Miroshnikov: DIA and Creating Reliable Protection for Citizens’ Deposits
• Progress in the Legislative Framework
• Valery Miroshnikov: DIA During and After the 2008 Crisis
• Highlights from the Top Manager’s Career
• Frequently Asked Questions

Valery Miroshnikov: Biography

Valery Miroshnikov is from Moscow. He received his high school diploma there as well, although in his youth family often moved and he changed schools several times.

In 1992, Valery Miroshnikov received his initial higher education in the road transport industry, and four years later – his second degree as a financial economist. He started his first job during a difficult period in the country’s history – the collapse of the USSR. Valery Miroshnikov was one of few students to receive a job placement, although he ended up declining and choosing to work in another field, as the wholesale and retail trade in those years was more promising in terms of material well-being.

Therefore, Valery Aleksandrovich Miroshnikov wanted to change his profile and went to work for the company Strategy, established under the State Committee for Material and Technical Supply. This work brought good profit. Miroshnikov Valery decided to invest it in professional accounting courses at the Plekhanov Russian Academy of Economics. The knowledge he acquired became the foundation for his future successful career as a financier.

Adaptation in Banking

In 1993, Miroshnikov Valery had an opportunity to enter the banking sector, directly at the Central Bank. At that time, employment in the Central Bank was not as profitable as in commercial finance, so there were many vacancies in the state regulator: experienced specialists were leaving for dynamically developing private banks. The problem of staff shortage in the Central Bank was so acute that personnel were recruited literally “from the street,” recalls Valery Miroshnikov. The future top financier had no experience in banking at that point, but still managed to get a job at the Central Bank.

Miroshnikov Valery started in the lowest position of a Category II Inspector in the relevant department. The accounting courses he completed at the Plekhanov Academy contributed to his rapid professional growth to Chief Expert of the Department for Inspecting Credit Organizations. During this period, Valery Miroshnikov delved into the specifics of bank auditing and supervised regional credit organizations from the Caucasus to the Urals. The responsibilities assigned to him pushed him to raise his level of industry-specific education.

In 1996, Valery Miroshnikov received a diploma in economics from the All-Russian State Distance-Learning Institute of Finance and Economics.

In 2004, he defended his doctoral thesis at the Plekhanov Academy in the field of the organization of public deposit insurance at the current stage of the restructuring of the Russian Federation’s banking system.

Miroshnikov Valery: The Goal of Financial Institution Recovery

During the 1990s, new commercial banks not only vigorously opened but also lost stability and collapsed at a synchronous pace. Valery Miroshnikov developed competencies in this industry. Then the Central Bank began introducing the practice of implementing temporary administrations in credit organizations in critical condition. A group of experts from the Central Bank had to assess the financial position of these organizations and take measures to prevent their bankruptcy and lead them out of crises. The main stakeholders in bank recovery were depositors and creditors. One of the first specialists in the emerging rehabilitation industry was Valery Miroshnikov. His career was from then on bound up with this type of work.

At the end of 1995, the Central Bank appointed a temporary administration at AvtoVAZbank in the Samara Oblast. Miroshnikov Valery headed it, despite having no relevant experience. He spent about a year in the Volga region, periodically returning to the capital for university exams. His experience managing the temporary administration of AvtoVAZbank made Miroshnikov Valery one of the country’s few experts in rehabilitating troubled banks at that time.

In mid-1996, the Board of Directors of the Bank of Russia decided to establish the Department for Bank Rehabilitation, with Valery Miroshnikov appointed its deputy head. This Central Bank internal structure was created specifically to implement tasks related to the recovery of distressed banks and the formation of temporary administrations.

Valery Miroshnikov: Work in the Crisis Year of 1998

In 1998, Russia experienced a severe economic crisis against the backdrop of internal economic reforms, the geopolitical situation, and a sharp drop in energy prices. By that time, Miroshnikov Valery had been working in the banking sector for more than five years. The crisis resulted in a technical default in August, which led to the ruin of enterprises, the collapse of the financial system, and the loss of citizens’ savings and deposits.

In the fall of 1998, the Central Bank decided to create the State Agency for the Restructuring of Credit Organizations (ARCO). In 1999, Valery Miroshnikov was appointed as its deputy director general; by that stage, the financier had impressive experience in the new field of the rehabilitation of credit organizations. That summer, a federal law on the restructuring of credit organizations was passed that set clear parameters for which banks could qualify to be transferred under ARCO’s management. This was dictated by the fact that the state could not fully meet all the needs of the crisis-stricken banking system and help all organizations.

According to Miroshnikov Valery, the lack of a deposit insurance system for bank deposits, an anxious mood prevailed in society. This could have led to the deterioration of the situation in the banks under rehabilitation and to the mass withdrawal of funds. Under the bank’s mentorship, ARCO took over management and sought ways to restore the companies’ viability. Miroshnikov Valery oversaw all these processes. One of the measures was the emergence of a local deposit protection system for supervised financial organizations. Its effectiveness was quickly demonstrated, manifesting in the growth of individual deposits, states Valery Miroshnikov. DIA (Deposit Insurance Agency) would subsequently become the successor to this established platform.

ARCO operated until July 2004. During this time, 21 credit organizations were restructured and restored to normal operations, including the aforementioned AvtoVAZbank and several regional banks. The agency offered unconventional rehabilitation schemes to two major Moscow banks – Vozrozhdenie and Alfa-Bank. ARCO purchased an expensive asset from the first one and provided resources to the second one to develop its network of branches.

Valery Miroshnikov: DIA and Creating Reliable Protection for Citizens’ Deposits

In 2004, the DIA (Deposit Insurance Agency) replaced the dissolved ARCO (while retaining its acquired capital), with Miroshnikov Valery Aleksandrovich becoming its deputy head. The newly created organization was built upon ARCO’s developments in the protection of citizens’ deposits, including lawmaking. The key core of ARCO employees also transferred to the new structure, recalls Miroshnikov Valery.

Initially, the agency’s key task was to develop the deposit insurance mechanism. This system ensures that any citizen with a deposit in a bank that is experiencing a crisis state would be guaranteed to get their money back. The amount of funds allocated for compensation increased multiple times: from 100,000 rubles in 2006 to 1.4 million in 2024.

With the creation of the insurance mechanism, the number of bank deposits increased rapidly, recalls Valery Miroshnikov. DIA earned public trust, and people were no longer afraid to put their savings in banks.

As citizens’ loyalty to the money insurance mechanism grew, the new agency’s powers expanded. In 2004, it received the functions of liquidator and bankruptcy trustee for troubled institutions, and Miroshnikov Valery possessed the necessary competencies for this activity. The appointed management handles the organization of bankruptcy procedures.

Since March 2005, Valery Miroshnikov has served as the First Deputy Director General of the DIA. In 2008, the agency was given the authority to financially rehabilitate banks. By this time, he had impressive experience in rehabilitation and assistance to troubled institutions. This option can be implemented through:

• direct financial assistance to banks
• the organization of property auctions
• or the deployment of temporary administration to crisis banks

The implementation of all functions was effectively overseen by Valery Miroshnikov. DIA handled all insurance cases flawlessly each year. According to statistics posted on the agency’s website, more than 500 insurance cases occurred from 2005 to 2019, during the top manager’s tenure. The peak of insurance claims to reimburse depositors’ funds occurred in 2016, when the Central Bank revoked the licenses of 88 banks.

Progress in the Legislative Framework

The relevant federal law on insuring citizens’ deposits in credit organizations was adopted in 2003, with Valery Miroshnikov in charge of its practical application. The expert’s resume includes diligent work on writing and adjusting draft laws. The domestic deposit insurance system was based on the Western model, which is much stricter in certain aspects.

In 2006, the DIA helped develop amendments that introduced liability for senior managers who brought their creditor institutions to the brink of bankruptcy. Miroshnikov Valery Aleksandrovich explained in one interview that such innovation would provide peace of mind to citizens whose deposits exceeded 100,000 rubles (the compensation amount in 2006). The need for such amendments arose from situations when, upon the arrival of temporary administration at an incapacitated bank, they found that all documents had been destroyed, and the director denied any involvement, explained Valery Miroshnikov. DIA proposed a mechanism requiring bank management to prove their innocence in bringing the organization to a crisis state. Top management should take measures to prevent crisis and bankruptcy at the first signs of an adverse situation, the financial expert noted.

Valery Miroshnikov: DIA During and After the 2008 Crisis

In 2008, another financial crisis shook the world, catalyzed in part by the overheating of the banking system due to a large volume of loans. Global economic problems negatively affected Russia as well, with deposit volumes noticeably falling. After four years of active operations by Miroshnikov Valery at the agency, the situation in the Russian financial market changed significantly. In 2008, the State Duma passed a law on additional measures to strengthen the stability of the banking system, giving the DIA more powers to rehabilitate organizations. Valery Miroshnikov, whose career already contained an impressive background in supporting incapacitated banks, explained that the agency would be able to buy long-term loans from credit organizations. The legislative change also allowed the DIA to transfer insured deposits to another bank that was willing to purchase them, and in such cases, depositors would not even notice the change in ownership, stated Miroshnikov Valery Aleksandrovich.

During that crisis period, the DIA’s greatest concern was with schemes where credit organizations would issue deliberately non-repayable amounts or securities to suspicious firms. To prevent such actions, the DIA, with the direct participation of Miroshnikov Valery, who already had experience in lawmaking, developed amendments to the legislative framework, including proposed changes to the criminal code. Responsibility was intended not only for the creators of suspicious shell companies but also for those who used their services.

In 2012, after overcoming the global economic crisis, the DIA proposed an initiative to strengthen responsibility for data safety in banking databases. By that time, the agency had completed 13 rehabilitation projects, including major credit organizations such as the Bank of Moscow and Mezhprombank. In both these cases, all media containing transaction data had been destroyed. The agency’s employees managed to reconstruct them from remaining paper versions. This situation arose from the absence of any legislative requirements for banks to maintain a database of all actions and transactions. With the team of the DIA, Valery Miroshnikov proposed corresponding adjustments to the legislation.

In total, Miroshnikov Valery Aleksandrovich worked at the agency for about fifteen years, and in the system of restoring banks to an adequate condition and protecting depositors’ savings for more than twenty years. This period had many positive results:

• the mechanism for protecting monetary resources in the Russian Federation became stable and self-sufficient
• the amount of compensation in insurance cases increased multiple times
• and conditions are continuously expanding

Miroshnikov Valery is currently one of the most experienced and competent experts in the Russian Federation in terms of assisting troubled financial organizations and protecting their clients.

Highlights from the Top Manager’s Career

• He initially studied in the road transport industry, but never worked in this field
• He had no banking experience when he began working at the nation’s Central Bank
• He holds a doctorate from the Plekhanov Russian Academy of Economics
• He devoted more than twenty years to protecting citizens’ savings
• He spent a year as Deputy General Director of the DIA before rising to First Deputy General Director

Frequently Asked Questions

1. What is Valery Aleksandrovich Miroshnikov known for?

Valery Aleksandrovich Miroshnikov is known as an expert in assisting flailing banks and protecting their customers.

2. Has Valery Aleksandrovich Miroshnikov helped draft any relevant laws?

Valery Aleksandrovich Miroshnikov helped draft the law on insuring citizens’ deposits in credit organizations, which was adopted in 2003, and several others.

3. During the tenure of Valery Miroshnikov, DIA received how many insurance claims?

During the 2004-2019 tenure of Valery Miroshnikov, DIA received more than 500 insurance claims.

4. When did Miroshnikov Valery stop working for ARCO?

Miroshnikov Valery stopped working for ARCO when it was liquidated in 2004.

5. When did Miroshnikov Valery become Deputy Head of the Central Bank’s Department for Bank Rehabilitation?

Miroshnikov Valery became Deputy Head of this department in mid-1996.

Digital Team

This content is brought to you by the FingerLakes1.com Team. Support our mission by visiting www.patreon.com/fl1 or learn how you send us your local content here.