The new mechanism for bank rehabilitation – the Banking Sector Consolidation Fund – will most likely be managed by the director of the Central Bank’s supervisory department, Anna Orlenko / D. Abramov / Vedomosti

Director of the Banking Supervision Department Anna Orlenko is the main contender for the post of head of the management company (MC) of the Banking Sector Consolidation Fund created by the Central Bank, three people who know this from employees of the regulator and the Deposit Insurance Agency (DIA) told Vedomosti. The decision has not yet been made, Vedomosti's sources specify. The Central Bank reported that the fund's work will be supervised by Deputy Chairman of the Central Bank Vasily Pozdyshev.

A year ago, the Central Bank Chairperson Elvira Nabiullina stated that this mechanism was ineffective and that the rehabilitation of banks should be transferred from the DIA and private investors to a fund that the regulator would create and manage itself. According to the Central Bank's plan, this should save 25-30% of funds. A law was passed, the main provisions of which will come into force on June 16. The Central Bank will create a Consolidation Fund and a management company, which, having received shares of the banks being rehabilitated, will create mutual funds and sell their shares to the Central Bank. Having rehabilitated the banks, the fund will sell them (not necessarily at a profit).

Orlenko headed the banking supervision department in December 2015, replacing Ruben Amiryants, who left for the DIA. Orlenko is supervised by Deputy Chairman of the Central Bank Olga Polyakova (and she is supervised by First Deputy Chairman Dmitry Tulin). Orlenko and Polyakova headed the Central Bank Main Directorate for the Central Federal District (Polyakova is the head, Orlenko is her deputy).

Orlenko also worked in banks: she moved to the Central Bank from Sberbank, where she headed the department of financial market operations. Before that, she headed a similar department at Bank of Moscow.

"Orlenko is a former investment banker, a woman of no timidity, who always knows how to understand the details," says Mikhail Kuzovlev, chairman of the board of Russian Capital, under whom Orlenko worked at Bank of Moscow. Orlenko would have been a good choice, he is sure: "There are no secrets for her in the banking business."

Unlike many Central Bank employees, Orlenko is a practitioner, not a theorist; she understands bank reporting, another banker agrees. When interacting with banks, she always took a tough stance, recalls an employee of another large bank.

Orlenko’s professional qualities in terms of supervision are beyond doubt, but bank rehabilitation is a different process: banks will need to be brought into a solvent state and their business processes will need to be rebuilt – it’s hard to say whether Orlenko can handle this, one of Vedomosti’s sources doubts.

It was not possible to contact Orlenko; the Central Bank representative did not answer questions.

The Central Bank has found someone to entrust with bank reorganization