Death of a Regulator

It's no secret that dealing with the growing body of regulation has become a bigger part of bank CIOs' and other technology executives' jobs (not to mention their IT budgets). We often hear from executives how much time they devote to their organizations' regulatory compliance, and how many resources

(systems, people, money) go to these efforts. But while these developments make the CIO's job more complicated, demanding and sometimes frustrating, they aren't life-threatening.

Except in Russia, where earlier this month 41-year-old Andrei Kozlov, the country's first central bank deputy chairman, was assassinated in what was assumed at press time to have been a contract killing. Kozlov and his driver were ambushed in Moscow by two men with pistols and shot to death.

Kozlov had taken it as his mission to stabilize and reform Russia's still-volatile banking industry -- to make it less of a resource for a few wealthy and powerful "oligarchs" and more an industry that could serve retail customers. Among his efforts had been a battle against money laundering, actions to close disreputable banks and steps to improve the credit of Russian banks -- including adoption of international accounting standards and tighter capital requirements. Summarizing Kozlov's accomplishments, The Wall Street Journal quoted John Litwack, the World Bank's lead economist for Russia, who said, "No one contributed more than Andrei Kozlov to the creation of a modern banking system in Russia. We're hoping that Andrei's death will only strengthen the central bank's resolve to carry out the reform to its logical conclusion."

That remains to be seen. While Kozlov's actions were helping fuel growth of the banking sector in Russia (in part by attracting global financial institutions such as Citigroup to enter the market), any of these initiatives -- especially the focus on money laundering -- could have been enough to make Kozlov a "marked man."

Obviously, even the worst inefficiencies and abuses in the U.S. financial services industry are nothing compared to the challenges in the Russian market (or, no doubt, in most developing markets). But Kozlov's murder does serve to put the challenges (and complaints) of U.S. banking executives into perspective. Without overstating things, one can't help but wonder how many of us would be willing to risk our lives for industry reform.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio