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This chapter explores the intensive transformation of the Bank of Russia and the National Bank of the Kyrgyz Republic (NBKR). As the central bank of the largest, the wealthiest, and the most geopolitically important Soviet successor state, the Bank of Russia received a disproportionate share of international attention and assistance. Although the Bank of Russia itself gradually transformed along Western lines, the slow pace of complementary institution building, advising mistakes in the 1990s, and an increasingly authoritarian government made its work difficult and often counterproductive. As the central bank of a small, resource-poor state in Central Asia, the NBKR presented a fundamental challenge to the transnational central banking community. With early and consistent community access but unstable domestic conditions and few internal resources, the NBKR's experience demonstrated both the possibilities and the limits of internationally driven institutional transplantation.

The interview offered by Sergei Dubinin is discussed in this chapter. He was the former chair of the Central Bank of Russia, under whose watch the ruble collapsed in August 1998. He discussed the problems of steering monetary policy in the late 1990s and of current monopoly restructuring in four interviews between 2000 and early 2005. Dubinin has personal experience in restructuring gigantic companies, being the former deputy CEO of Gazprom, the world's largest natural gas monopoly, and current deputy CEO of United Energy Services (UES), Russia's electric power monopoly.

This chapter reviews the Russian banking market and the Russian deposit insurance system (DIS) and market evolution from the moment of its adoption. The risks of the adoption are taken into account within the Russian context. This chapter also explores the reforms that have taken place in order for Russia to be able to create an effective deposit insurance system. It discusses the role of the Central Bank of Russia (CBR) in these reforms, where it is suggested that strengthening the CBR’s monitoring and enforcement capabilities would have been an advisable first step before introducing a DIS. However, as is seen in Russia, DIS can produce positive impacts on financial sector stability. This does not conclude, however, that it is a “silver bullet” by itself. It’s suggested that the market structure and the regulatory environment are what determined the positive effects of deposit insurance.