The real bogey-men are the Mongolians, who are dragging one another down

Thank you, Mongolbank for your efficient work. Poor corporate management has taken Zoos Bank to bankruptcy. One good thing about the economic crisis in Mongolia has been that it has shown that only the fittest can survive. The policy of the Central Bank regarding Zoos Bank was right and its prompt action was commendable. Exactly a year ago, when doubts began to surface about Anod Bank’s continued solvency, Mongolbank did not act as quickly and as decisively. It could not assert its independent authority and followed politically motivated directions in appointing a plenipotentiary representative to Anod bank and imprisoning its directors in Gants Hudag.

Today, on the other hand, it has been too quick to announce bankruptcy and has been trying hard to identify a bogey-man. It is a matter of regret that Mongolbank is creating confusion in society through this attempt to find someone to blame for this clear evidence of chronic sickness and tragedy of the financial sector, the of which has been blown off by the winds of crisis. It could not have been easy for Mongolbank to decide that Zoos would be declared bankrupt. The reason again is that the Mongolbank does not get an opportunity to work independently. It is meant to work under the supervision of the State Great Hural (SGH), but in fact it is an organization subject to pressure from all political parties and chafes under their yoke. It was the same in 1990s and nothing has changed today. It declares time and again its monetary policy to control inflation, only to see the Government happily increase State expenditure. Finally, when the monetary policy fails to deliver, directors of the Mongolbank are called to the SGH for a grilling where they sit before MPs unable to speak the truth.

It seems easy to find a bogey-man, thanks to the poor supervisory and inspection work of the Mongolbank. In the existing system, almost everything is protected as bank privacy. Banks do not have to disclose the identity of their major shareholders, the accountability of the CEO is not enforced, and they bear no legal responsibility for the loans they issue as they like – this is how our commercial banks are  managed. This is not corporate governance but is the management of bankruptcy. Zoos collapsed as a natural corollary of the way it worked. Mongolbank had to wait for several days to get the permission of politicians, since it has no power to exercise its full authority to implement its decision immediately. That environment of independence has not yet been created in our country.