Moscow Interbank Currency Exchange

Moscow Interbank Currency Exchange
Name	Moscow Interbank Currency Exchange
Native name	Московская межбанковская валютная биржа
City	Moscow
Country	Russia
Founded	1992
Closed	2011
Fate	Merged into MICEX-RTS
Key people	Igor Artemyev; Andrei Kazmin; Vladimir Putin
Currency	Russian ruble
Indices	MICEX Index

Moscow Interbank Currency Exchange was a central financial trading venue in Moscow that operated during the post-Soviet transition and the early 21st century, providing interbank foreign exchange, money market, and securities trading. It played a role in the transformation of Russian financial markets, interacting with institutions such as the Central Bank of Russia, Sberbank of Russia, Vnesheconombank, and international actors including Deutsche Bank, Goldman Sachs, JP Morgan Chase, and HSBC. Its operations intersected with major events like the 1998 Russian financial crisis, the 1997 Asian financial crisis, and regulatory reforms under leaders including Boris Yeltsin and Vladimir Putin.

History

The exchange was established in 1992 during the privatization era associated with figures like Anatoly Chubais and institutions such as Russian Privatization Center, reflecting shifts in post-Soviet Union financial architecture. Early growth occurred amid interactions with Gazprom, Lukoil, Rosneft, and corporate bond issuances tied to companies like Norilsk Nickel and Severstal. The 1998 default and devaluation influenced liquidity and counterparties including Vneshtorgbank and foreign banks such as Bank of America and Citibank. Subsequent recovery involved mergers, strategic partnerships with venues like RTS Stock Exchange, and culminated in the 2011 merger forming the consolidated Moscow Exchange involving actors such as VTB Bank, Gazprombank, and market participants including Renova Group and Basic Element.

Organization and Governance

Governance structures reflected shareholder representation from state-linked entities including Central Bank of Russia, Sberbank of Russia, and private groups like Sistema. The board featured executives with ties to ministries such as the Ministry of Finance (Russia) and regulators like the Federal Financial Markets Service (Russia), and had relationships with international standard-setters including the International Monetary Fund and Bank for International Settlements. Key governance themes included market transparency initiatives aligned with practices of London Stock Exchange, New York Stock Exchange, and collaborations with clearing houses such as Euroclear and Clearstream. Corporate governance debates involved stakeholders such as Rosneft, Interros, and institutional investors like BlackRock and Vanguard.

Trading Operations and Products

Trading included spot and forward foreign exchange products, money-market instruments, short-term repo contracts, and securities transactions in equities from issuers like Gazprom, Sberbank of Russia, Gazprom Neft, and bonds including sovereign issues of the Russian Federation and corporate debt from LUKOIL. Instruments also covered derivatives such as futures and options linked to indices like the MICEX Index and commodities tied to Brent crude and Urals oil. Counterparty networks incorporated banks including Sberbank, VTB Bank, Alfa-Bank, UniCredit Bank, and international participants like Societe Generale and Credit Suisse. Settlement cycles aligned with standards comparable to T+2 practices seen at exchanges like Euronext.

Market Infrastructure and Technology

The exchange deployed electronic trading platforms influenced by architectures used at NASDAQ and Deutsche Börse, with matching engines, order books, and connectivity for remote terminals used by brokers such as Troika Dialog and Otkritie FC Bank. Clearing and settlement interfaced with systems operated by the Central Bank of Russia and national payment systems including Sovcombank-linked infrastructure, while custody services engaged players like State Corporation "Deposit" (hypothetical) and international custodians such as The Bank of New York Mellon. Technology modernization paralleled projects at Moscow Exchange and collaborations with vendors from IBM, Microsoft, and Thomson Reuters.

Regulation and Oversight

Regulatory oversight involved the Central Bank of Russia and successor agencies including the Federal Financial Markets Service (Russia), with legal frameworks referencing laws like the Law on the Central Bank of the Russian Federation and securities legislation debated in the State Duma. Supervision incorporated anti-money laundering standards from the Financial Action Task Force, and compliance expectations aligned with Basel Committee on Banking Supervision guidance influencing banks such as Sberbank and VTB Bank. Enforcement actions and policy responses were shaped by crises such as the 1998 Russian financial crisis and geopolitical events that engaged institutions like the European Central Bank and International Monetary Fund.

Economic Significance and Market Impact

The exchange influenced liquidity, price discovery, and capital formation for major Russian issuers including Gazprom, Rosneft, Lukoil, Norilsk Nickel, and Sberbank of Russia, affecting investment decisions by sovereign wealth entities like the Russian Direct Investment Fund and foreign portfolio managers including BlackRock and Vanguard. Its consolidation into the modern Moscow Exchange changed market structure, drawing comparisons with integrated exchanges such as NYSE Euronext and CME Group, and impacting regional financial centers like Saint Petersburg. Legacy effects include infrastructure, regulatory precedents, and market practices that continued to shape relations with counterparties including Deutsche Bank, Goldman Sachs, and multilateral institutions like the World Bank.

Category:Stock exchanges in Russia