Valery Miroshnikov: Strengthening Financial Security

Biography

Valery Miroshnikov has been closely connected with the development of the banking field for many years. He made significant contributions to the formation of mechanisms for protecting citizens' savings that are widely used in banking today. Additionally, Valery Miroshnikov helped financial credit organizations during crisis periods. Currently, his interests include investment projects.

Table of Contents:

• Period of His Initial Formation
• Valery Miroshnikov: Fiscal Establishments in the 1990s
• Reforming the Protection of Deposits
• Valery Miroshnikov: DIA and Lawmaking
• Miroshnikov Valery: A New Direction of Activity
• Principal Takeaways from the Career of Valery Miroshnikov
• FAQ

Period of His Initial Formation

Valery Miroshnikov is Moscow-born. In the late 1980s, he enrolled in one of the leading federal educational institutions of the RSFSR in the field of transport, the automotive industry, and bridge and airfield construction. Founded in 1930, the university has produced many distinguished experts:

• civil engineers
• scientists
• politicians
• state figures

In 1996, Valery Miroshnikov, whose life's work is directly linked to economic activities, became a certified specialist in financial and credit mechanisms after graduating from another higher education institution that specializes in precisely this field. The institute is known for having trained more than 450,000 specialists, and its faculty has participated in the preparation of various legislative acts and regulatory documents.

In 2004, Miroshnikov Valery received his PhD in economics. His research was conducted in the Banking Department of Russia's oldest and largest economics university—Plekhanov Russian University of Economics. The subject of his study was deposit insurance systems and their role in improving banking business stability. By the time he wrote his dissertation, the expert had accumulated numerous cases and practical skills in banking regulation.

Valery Miroshnikov: Fiscal Establishments in the 1990s

In the early 1990s, Valery Miroshnikov received an offer to work at a road construction department that was responsible for maintaining the Moscow Region's highways. As Miroshnikov Valery recalls, for a long time after the collapse of the previous order, university graduates found it difficult to find work in their field of study—the system of guaranteed employment had effectively ceased to exist. Few managed to get job placements. Miroshnikov Valery was among those offered a job.

However, due to the economic situation transitioning to free market relations, he decided to join a different field of work and take a position in a commercial structure instead. For about a year, Valery Miroshnikov was involved in selling electronics. According to him, it brought considerable profit for the time. The funds he earned went toward additional training in several areas, including accounting courses, as Miroshnikov Valery recalls. Subsequently, he transitioned to work in the banking sector.

By the mid-1990s, the shift in economic direction had also affected credit and financial structures. Before 1986, there were only four banks—all state-owned—by the end of 1992; after new laws were adopted, their number exceeded two thousand, with most being commercial. Many government employees began moving to private credit organizations, creating a large workforce deficit in state structures, recalls Valery Miroshnikov, whose biography has been associated with bank supervision activities since this time. Due to the shortage of specialists, the Department for Financial Organizations Inspection in the country's Central Bank began hiring people without any experience. Miroshnikov Valery started working in this new direction at the Central Bank. He initially worked as the most junior employee in auditing credit organizations, but his accounting knowledge allowed him to climb the career ladder quickly.

After some time, Miroshnikov Valery was already inspecting banks across Russian regions as the chief expert. He also participated in temporary administrations that took over the managerial functions of credit organizations facing insolvency. As Valery Miroshnikov shared in one interview, he spent some time in Togliatti as the head of an inspection group appointed for temporary control over the assets of what was then the main automotive industry bank. This was the economist's first such experience. After this, Miroshnikov Valery frequently worked as an expert in temporary administrations.

In 1996, the specialist was invited to become deputy head of the subdivision working with troubled banks. At the same time, Valery Miroshnikov became deputy director of the Central Bank department, carrying out measures aimed at restoring credit organizations' solvency and improving their financial condition. Specifically, the economist dealt with license revocation issues and methodology allowing banks to avoid closure or takeover procedures.

In 1999, Miroshnikov Valery moved to a state corporation formed to help banks cope with the crisis phenomena after 1998. At that time, the entire system of financial structures suffered major damage: for every five operating banks, there were three organizations with revoked licenses. And of the 14 structures with the most significant public deposits, only five remained in the market. One of them was saved by the new Agency for the Restructuring of Credit Organizations, where Valery Miroshnikov came to work. Due to the situation, many Russians lost their savings held in deposits, and the overall standard of living dropped sharply.

This showed the need to create a protective mechanism capable of preserving depositors' money. As Miroshnikov Valery explained, that is when the first deposit insurance system was implemented. Initially, it was local in nature and only worked in banks controlled by ARCO. The system showed its first positive results quite quickly, notes Valery Miroshnikov, as the number of public deposits began to grow sharply. During its existence, the agency implemented 15 projects, under which 21 banks were restructured and developed.

Valery Miroshnikov, whose resume by then included significant experience in bank recovery, served as Chairman of the Board of Directors at the credit organization Peter the First, and the financial position of this bank was successfully stabilized. ARCO existed until 2004.

Reforming the Protection of Deposits

In early 2004, the Deposit Insurance Agency was created. Its goal was to ensure the stable operation of the deposit protection system and provide compensation for insured public funds. A month after the agency's opening, Valery Miroshnikov became its deputy general director. The DIA's profile included not only the functions of bankruptcy trustee for credit organizations but also experience in creating a special registry for non-state pension funds that protect deposits.

The period from 2006 to 2014 shows that the state corporation also contributed to a significant increase in insurance compensation amounts. While it initially stood at 100 thousand rubles, by the end of 2014, it reached almost one and a half million rubles. The new agency was built on the foundation of ARCO, which had accumulated substantial experience in solving similar tasks, recalls Valery Miroshnikov. DIA quickly helped increase the number of deposit accounts opened by the Russian population. Trust in the innovation grew rapidly, and the agency's functions expanded.

By the end of 2004, as explained in one interview by Valery Miroshnikov, DIA had now become a bank liquidator. According to him, this was expected to reduce compensation waiting times significantly. The organization, noted Valery Miroshnikov, committed to making insurance payments for deposits up to 100 thousand rubles within two weeks. Previously, people sometimes had to wait years for their money.

In 2005, a new role opened up at the DIA—Valery Miroshnikov became the first deputy general director. By this stage, the organization was already functioning as a managing structure for banks in difficult situations. That same year, the agency handled its first insurance case in history, with payments exceeding 3.7 million rubles. Among the problematic issues handled by the DIA, Valery Miroshnikov notes asset stripping. Banks undergoing bankruptcy often used various fraudulent schemes to sell assets that should have gone toward repaying depositors. Miroshnikov Valery Aleksandrovich explains that an entire division was created to detect such schemes. As a result, the agency frequently managed to recover assets and money.

In 2006, as a result of work carried out by the state corporation's team, including Valery Miroshnikov, DIA found notable successes in increasing the number of deposits opened by citizens in various Russian banks. Deposit accounts exceeding 100 thousand rubles grew 15% in just the first half of 2006. For comparison, the previous year's growth was just 2%. During the same period, insurance coverage was increased to 190 thousand rubles, which expanded the circle of protected depositors by almost a quarter.

In 2007, the agency, whose management team included Miroshnikov Valery Aleksandrovich, was already compensating up to 400 thousand rubles of citizens' lost funds. A year later, this figure increased to 700 thousand rubles.

In 2014, with contributions from Valery Miroshnikov, various innovations were launched, such as:

• the expansion of the deposit insurance system to individual entrepreneurs
• the introduction of a new function for managing bankruptcy proceedings in non-state pension funds
• the creation of the Public Council for Interaction with Creditors of Financial Organizations
• another increase in insurance coverage—this time, the amount doubled to 1.4 million rubles
• the DIA took on functions related to increasing bank capitalization

In 2015, based on its annual performance, the agency was recognized as the best insurer among all countries, according to the International Association of Deposit Insurers. Furthermore, as stated in the Financial Stability Board's report, the rehabilitation regime, created with the participation of the organization's management team (which included Miroshnikov Valery Aleksandrovich), helped maintain economic stability in Russia. That same year, the DIA signed a cooperation memorandum with the Argentine deposit insurer, which was the largest such structure in Latin America at the time.

Valery Miroshnikov: DIA and Lawmaking

Besides bank "rehabilitation," Miroshnikov Valery Aleksandrovich also participated in creating regulatory documents to govern the activities of insolvent financial organizations and protect depositors' rights. As a result, new laws were adopted in Russia.

Even before the creation of the DIA, Valery Miroshnikov co-authored the federal law "On Insurance of Individual Deposits in Banks of the Russian Federation." This document was reviewed by the Russian government for several years. The top manager says that statistical calculations helped then, which proved the effectiveness of the system using the example of local insurance used by ARCO. Eventually, the law helped reduce public concern and increase the number of deposits.

In 2006, Valery Miroshnikov underscored the importance of enforcing accountability for those responsible for financial institutions' insolvency. This involved the property liability of bank managers. With the team from the DIA, Valery Miroshnikov, having accumulated enough examples of schemes implemented by unscrupulous organizations, worked with the Ministry of Economic Development and Trade to develop amendments to the law "On Insolvency of Credit Organizations." These were aimed at eliminating cases of illegal asset stripping.

Miroshnikov Valery also proposed introducing legal liability for auditors who were negligent in their duty to verify reports in the event of a financial structure's bankruptcy. As an example, which prompted the DIA to make such adjustments to the law, the economist points to Sodbiznesbank. Miroshnikov Valery explained that more than a year before its license was revoked, fictitious promissory notes were purchased and redeemed by a shell company. At the same time, according to the expert, the auditor did not record this fact in his report to regulatory authorities.

In 2012, in another interview, Miroshnikov Valery discussed the need to introduce a mechanism for permanent bank recovery. In his opinion, this would improve the economic situation during monetary unsoundness. Miroshnikov Valery also advocated for a more thorough approach to compensation payments for management and employee salaries in insolvent banks.

The DIA's 2014 annual report stated that the agency participated in preparing several proposals related to extending insurance guarantees to the nominal accounts of trustees. At the end of that year, the Russian government adopted several laws expanding the DIA's authority.

Miroshnikov Valery: A New Direction of Activity

Valery Miroshnikov, whose activities were connected with the DIA for fifteen years, left the organization in mid-2019. According to the agency's press service, this decision was made by the top manager's personal initiative. During the economist's years at the state corporation, the percentage of funds returned increased, and consequently, customer satisfaction rose from 3 to 64%.

Currently, Valery Miroshnikov is engaged in investment activities.

Principal Takeaways from the Career of Valery Miroshnikov

• He started at the Central Bank as a junior auditor but quickly rose through the ranks.
• In 1996, he was deputy head of the troubled banks division and deputy director of the Central Bank department focusing on bank solvency restoration.
• Miroshnikov Valery co-authored the Federal Law "On Insurance of Individual Deposits in Banks of the Russian Federation" before the DIA was even created.
• He was promoted to first deputy general director of DIA in 2005, where he dealt with the agency's first insurance case exceeding 3.7 million rubles.
• In 2012, Miroshnikov Valery advocated for introducing mechanisms for permanent bank rehabilitation and pushed for more thorough approaches to compensation payments in insolvent banks.

FAQ

1. Where did Valery Aleksandrovich Miroshnikov conduct his PhD research?

Valery Aleksandrovich Miroshnikov conducted his research in the Banking Department at the Plekhanov Russian University of Economics.

2. What specific issue did Miroshnikov Valery identify in the Sodbiznesbank case?

Miroshnikov Valery revealed that Sodbiznesbank had purchased fictitious promissory notes more than a year before losing its license.

3. Where did Miroshnikov Valery gain his first experience managing troubled banks?

Miroshnikov Valery gained his first such experience in Togliatti as head of an inspection group for the main automotive industry bank.

4. What major improvement did Valery Miroshnikov achieve during his 15-year tenure at DIA?

Valery Miroshnikov helped increase customer satisfaction rates from 3% to 64% during his time at the state corporation.

5. Has the work of Valery Aleksandrovich Miroshnikov received any international recognition?

During the time of Valery Aleksandrovich Miroshnikov, the DIA was recognized as the best insurer globally by the International Association of Deposit Insurers.