Steven Fisher
Citibank
Interview conducted on August 18, 2025
Interview conducted on August 18, 2025
Steven A. Fisher is a career finance professional and scholar of Russia whose work in emerging markets spanned thirty-five years with Citibank, including sixteen in senior leadership roles in Moscow and Kyiv. He first visited the Soviet Union in 1983 and has maintained a focus on Russia ever since. From 2002 to 2010 he served as Citibank’s corporate bank head in Moscow, overseeing corporate banking in Russia, Kazakhstan, and Ukraine. Over the course of his career, he has spoken at finance and policy forums worldwide, sharing insights drawn from decades of direct experience.
Fisher’s independent scholarship centers on Russia’s politics, economy, and society. His works include Once Upon a Russia: Voices From a Vanished Era (editor, Forest Cat Press, 2025); Failure: Russia Under Putin (coeditor with Harley D. Balzer, Brookings Institution Press, 2025); and Into Russia’s Cauldron: An American Vision, Undone (Forest Cat Press, 2021). He also coauthored, with Anders Åslund, “New Challenges and Dwindling Returns for Russia’s National Champions” (Atlantic Council, 2020). A graduate of Georgetown University’s School of Foreign Service (M.S.) and Cornell University (B.A. in Sino-Soviet studies), he speaks fluent Russian.
www.stevenfisherciti.com
Fisher’s independent scholarship centers on Russia’s politics, economy, and society. His works include Once Upon a Russia: Voices From a Vanished Era (editor, Forest Cat Press, 2025); Failure: Russia Under Putin (coeditor with Harley D. Balzer, Brookings Institution Press, 2025); and Into Russia’s Cauldron: An American Vision, Undone (Forest Cat Press, 2021). He also coauthored, with Anders Åslund, “New Challenges and Dwindling Returns for Russia’s National Champions” (Atlantic Council, 2020). A graduate of Georgetown University’s School of Foreign Service (M.S.) and Cornell University (B.A. in Sino-Soviet studies), he speaks fluent Russian.
www.stevenfisherciti.com
About
Steven A. Fisher is a career finance professional and scholar of Russia whose work in emerging markets spanned thirty-five years with Citibank, including sixteen in senior leadership roles in Moscow and Kyiv. He first visited the Soviet Union in 1983 and has maintained a focus on Russia ever since. From 2002 to 2010 he served as Citibank’s corporate bank head in Moscow, overseeing corporate banking in Russia, Kazakhstan, and Ukraine. Over the course of his career, he has spoken at finance and policy forums worldwide, sharing insights drawn from decades of direct experience.
Fisher’s independent scholarship centers on Russia’s politics, economy, and society. His works include Once Upon a Russia: Voices From a Vanished Era (editor, Forest Cat Press, 2025); Failure: Russia Under Putin (coeditor with Harley D. Balzer, Brookings Institution Press, 2025); and Into Russia’s Cauldron: An American Vision, Undone (Forest Cat Press, 2021). He also coauthored, with Anders Åslund, “New Challenges and Dwindling Returns for Russia’s National Champions” (Atlantic Council, 2020). A graduate of Georgetown University’s School of Foreign Service (M.S.) and Cornell University (B.A. in Sino-Soviet studies), he speaks fluent Russian.
www.stevenfisherciti.com
Fisher’s independent scholarship centers on Russia’s politics, economy, and society. His works include Once Upon a Russia: Voices From a Vanished Era (editor, Forest Cat Press, 2025); Failure: Russia Under Putin (coeditor with Harley D. Balzer, Brookings Institution Press, 2025); and Into Russia’s Cauldron: An American Vision, Undone (Forest Cat Press, 2021). He also coauthored, with Anders Åslund, “New Challenges and Dwindling Returns for Russia’s National Champions” (Atlantic Council, 2020). A graduate of Georgetown University’s School of Foreign Service (M.S.) and Cornell University (B.A. in Sino-Soviet studies), he speaks fluent Russian.
www.stevenfisherciti.com
Daniel Satinsky: Thank you for agreeing to do this interview with me, and I’m really looking forward to it. And let’s just jump in by letting me ask you how did you originally get interested in Russia?
Steven Fisher: Oh, Daniel, it is an interesting story with a lot of serendipitous twists along the way, so I’ll start from the very beginning and paint this picture. So, basically it started in high school. In those days in my public high school in Port Chester, New York you had a choice of studying Italian, Spanish or French as a foreign language. That was it. That’s all my school offered. And of course I was studying Spanish.
But in my junior year one of the language teachers said hey, you know, I teach Russian as well, would you be interested? And I thought, oh, that’s really, really very interesting, and I said yes. So, on the side she started teaching me very, very elementary Russian, my god. But it was an old textbook, and it was a good start. I was the only person in the entire school who signed up for this little extracurricular activity, you might say, Daniel, but it opened a world of fascination to a language—
Daniel Satinsky: Just briefly, what year was this?
Steven Fisher: This was in 1976. No-no, it wasn’t. Yeah, I guess in 1976. We were deep in the Soviet Union in those days and Russia. You know, in addition to the language being fascinating and having this teacher willing to take her personal time, basically, to open this world to me and spend a little time teaching me basic Russian, it really did kindle quite a fascination. And because of that, I graduated high school, and I went to Cornell University in Ithaca, New York, and I was a political science major, but very quickly in my freshman year that bug on Russia came back, and I joined a special program. It’s called the College Scholar Program where you’re able to design your own major. And I thought that well, you know, Russia—or the Soviet Union at that time—was such a massive presence, and it was our competitor in the world, and it was warranted for many reasons to study this in-depth. And I was obviously already hooked on Russia from an early age.
So, I took up a major that I created called Sino-Soviet Studies, so I was studying Russia and also started to study China as well, because I thought that these three—plus with the United States—these three powers really sort of dominated the world scene, and one had to be proficient in understanding them to be part of a solution or an ongoing engagement. So, that’s how it started. This was in 1977. And I kept studying Russian, and in my sophomore year I started studying Chinese as well, and the major went very well. What I was studying was basically political science and history, more or less starting from the Bolshevik revolution era in the early 20th century to present, and then about the same parallel for China as well. So, I tell you, one week I’d be studying the collective speeches of Brezhnev, and then it would be looking at dipping inside Mao Zedong’s little red book.
And I started studying Chinese, which just took that fascination with language one step further, because as you can imagine, Russian already is quite exotic, and when you go to Chinese you’re almost in a different world. And I remember the first, after basically one semester of Chinese at Cornell, they gave us the first book to read. And it was of course not complex. It was sort of like probably a sixth grader’s book in China. But to read a book in just Chinese characters was such a feeling of empowerment and fascination that that kept me going.
So, two things happened at that time, very pivotal things in my life and in my career, and I will tell you both of them. So, first—I love these stories—so first, both serendipities plus very fatalistic, the first thing that happened is over one vacation in early, sometime in 1978 I went back home. I was in my grand—my grandmother was living at our house during that time, and she pulled out a shoebox because she knew I started studying Russian at Cornell. So, she pulled out a shoebox, and in this shoebox were letters from the Soviet Union dated 1960.
So, my grandmother emigrated from the Russian empire. It wasn’t even the Soviet Union then. She immigrated to the U.S. around 1905. And her naturalization certificate at Ellis Island, in identifying her, called her a grazhdanstvo [citizenship], what was it called? Of the Russian empire— predmet, premet Russkoi Imperii, a subject of the Russian empire, which is really fascinating. So, this is where my grandmother enters the story as a predmet Russkoi Imperii who immigrated to the United States circa 1905. She pulls out this very ragged shoebox of letters, and I start reading them, and of course I can’t read them perfectly because my Russian still at that time was not at such an adequate level. But these were letters from her brother to her.
And her brother never succeeded in emigrating to the United States. The plan was back in 1905 send a few young people—you know the story well with immigrants—start working, earn some money. You earn enough money and establish yourself, bring everyone else over. But the World War I erupted, the Bolshevik revolution interceded, and some of her family, because of those events, never succeeded in leaving Russia, and then ultimately it became the Soviet Union. So, it turns out that one branch of my family never left Russia and grew up in Russia.
And fast forward to 1960, and her brother, who was still there, is writing letters to her. And he’s still alive by—he was still alive at that time. So, I took a letter—and this is 1978—from 1960 and just out of a lark, in my still fairly poor Russian, wrote back to him at the same address—no-no-no, excuse me. My grandmother’s brother had died already by that time. He was already passed away. But anyway, I wrote back to that address in a lark, and then believe it or not, almost three months later a letter came back from the Soviet Union, that same address. And who wrote it but the grandson of that original grandfather, the brother of my grandmother who passed away many, many years ago.
So, this family connection, lost for almost 20 years and broken for almost a century, came back to life and I started to write him. And this is 1978. This is the heart, this is deep in Soviet times. And that’s why it took three months to get a letter through the censors, and it’s amazing you even got the letter period. But we started corresponding. And what happened—you know, I’ll just finish this thread, because there are some other ones as well that are pivotal in the story we’ll tell today.
So, how that developed is we kept corresponding over the years, and after I graduated Cornell in ’81 I went to Georgetown, where I was getting my master’s in foreign service. And I was already in Asia at the time. We’ll talk about that in a second. But in 1983 I was in Hong Kong for my first assignment—well, one of my assignments with Citibank—and I wrote to him, and I said well, you know, I’m in Hong Kong, why don’t I try to visit you? I’ll take the Trans-Siberian train. I’ll fly up to Beijing, I’ll take the Trans-Siberian train from Beijing to Moscow, and maybe you can meet me in Moscow.
And my relatives at this time, I don’t know what I would call him, like a second cousin, or exactly how you would define that, they were living in Yevpatoria, which was in the Crimea, not far from Simferopol, like, you know, 30—less than a 60-minute drive from Simferopol. They were living in Yevpatoria, which is a beautiful seaside town full of health resorts and things like that.
So, I got my Russian visa—my Soviet visa. This was during Andropov, I believe. And I got the visa, ended up in Beijing, and took the train, a seven-day train, all across Eurasia, which was probably the most amazing journey I ever had in my life. And Daniel, it was probably the most cost-effective journey because I think the cost of each kilometer of travel was 50 cents or something like that. The whole journey in the second-class coupe was like $200 one way. And in that wagon, I was, you know, in those days foreigners were put in a special foreigner car. You were not allowed to mix with Russians, basically. So, I had another American, an Italian, and a British guy, the four of us, and we had a simply wild time going across Eurasia, ending up in Moscow. So, that really added to my Russian adventure to such a high degree, that whole family episode.
But let’s go back in time because there was a strategic interruption. And back again to 1978. So, now I am once again a sophomore at Cornell, I am a Russian, Sino-Soviet studies major. I’m already two years of college Russian under the belt. And I applied for the summer language program, as many did in those days, to the Leningrad State University Russian language program for the summer of 1980, which made a hell of a lot of sense, given what I was doing. And I got accepted. And just something happened, though, and it was December 25, 1979. The Soviet Union invaded Afghanistan, and the relations with the U.S. and Russia just fell apart, and they were very, very bad. And I was just looking at the overall situation and asking myself wait a minute, do you really want to go to the Soviet Union in this situation? Because these were really very, very tough times. And I started thinking maybe that wasn’t the right time for this.
And I applied, because I had now started studying Chinese, I applied for a summer Chinese language program in Taipei, Taiwan, the Stanford program, which again was the premier language program to study Chinese abroad. And in those days, in 1978, as you can imagine, going to Mainland China was very tough. Very few people did it. and people were just basically saying listen, if you want to get a better opportunity to mix with Chinese and study Chinese, you’re better off going to Taipei than going to Mainland China. And by the way, afterwards I found out that the food is a hell of a lot better in Taipei than it was in Beijing at the time, among other things.
So, I made that shift. I did not go to Leningrad. I went to Taipei and studied Chinese that summer. This was the summer of 1980. And the Chinese I met, the Chinese I learned, the other foreigners who were there studying with me turned out to be an absolutely amazing period. And it was well worth it. It was a great decision. But what that meant was that now that emphasis on China really tipped the scale. And there’s another reason for that.
You know, just look at this. You’re about to graduate your university—this is the beginning of 1981—and you’re thinking okay, what am I going to do with my political science Sino-Soviet studies degree? And in those days, there was very little you could do with Russian studies—academia, or the State Department, or maybe the CIA. There was no business at all, basically—very, very, very little, so the job opportunities were quite limited. But with China and Asia things were really booming. China was opening up. And I said well, you know, now that I’ve got both of these under my belt—and in those days not many people were studying Chinese, so you still had, as an American you had a relatively rare skill set than many other people.
So, I decided to increase my emphasis on China at that time. And a few things happened that helped me. So, I applied to Georgetown for my master’s. I started in the fall of 1982, and now I had two summers of Chinese study under my belt. Fall of 1982. And during that first year at Georgetown, Georgetown sponsored a cocktail party with recently graduated alums in New York City. So, I took the train from Washington and went up to New York City and went to this event. And I met a gentleman called Lou [Viada] who had graduated Georgetown MSFS three years, four years before I did, and he was employed by Citibank in their brand-new opened Peoples Republic of China representative office. And he looks at my C.V., and he goes, well, how would you like a summer internship with Citibank? Join me in Hong Kong for the summer and help us with our new representative office. And it took me about three seconds to say I’m on board for sure.
Daniel Satinsky: Absolutely.
Steven Fisher: So, I go out there, and I was still thinking State Department at that time. But what happened was working with Citibank I realized hey, you know, I can do this stuff, too. I didn’t have accounting then. I didn’t really have a—I didn’t have an MBA. I was pursuing international relations with a Sino-Soviet angle at Georgetown as well. But I realized that I could do this. And Citi offered me a job after that summer and said when you get your degree at Georgetown the next year join us, and we’ll put you in the training program, and we’ll teach you everything you don’t know. It was a half year training program—accounting, finance, credit work, you know, how to be a banker. It was a very, very tough program. It was tantamount to half an MBA courtesy of Citibank. But the catch was if you failed any of the exams you would lose your job, you’d be fired.
Daniel Satinsky: Oh, wow.
Steven Fisher: So, it was very high pressure, and not easy, because my background was not—I did not have an MBA background, it was international relations. But I passed, luckily, and I was accepted. And after one year in New York doing M&A and other kinds of high-ranking kind of leveraged capital business they sent me—my wish was to be sent as an international staff to Taiwan, and they said that’s where we’re going to send you.
And for the next six or seven years I was working in Taiwan as an international staff of Citibank, doing a lot of great things, very much embedded into banking. And enjoying being in Asia. I started studying Japanese as well, which in those days was the other professional language. You really had to understand Japan in those days. Just imagine 1980, you know, Japan was the future power—like we say about China now, everyone was saying that Japan was the future economic power of the world. So, I started studying Japanese as well just to round out that Asian experience. So, let’s continue the timeline.
Daniel Satinsky: Yeah, let’s jump to the Soviet Union.
Steven Fisher: Where does Russia come back in? So, basically 1989 the Berlin Wall falls. I’m in Taiwan and I’m going wait a minute, you know, the whole world just changed, the Berlin Wall has fallen, Russia and Eastern Europe is opening up now—now why don’t I go back to my Russian studies roots and take advantage of everything I’ve done, and do something that I’ve always wanted, why don’t I shift my focus. It was pretty daring to do that because Asia was really booming. Why don’t I shift my focus back to Russia and pursue that now that the business opportunities were opening up. And of course I was in Citibank, and that was a great place to be. I felt I had a long-term career there. But I saw that now Eastern Europe and Russia could be part of that long-term Citibank career trajectory. So, I started to shift. I was planning to do that.
Daniel Satinsky: And was Citibank also shifting at the same time or were you [trying to] push them there?
Steven Fisher: Absolutely. No, no, I didn’t. I was a very low-level guy. But in 1993 Citibank decided, after leaving, or being kicked out of Russia in 1918, Citibank decided to come back to Russia, and they opened up a representative office in 1993. And in 1994 they received their commercial banking license, which they had originally received on December 31, 1916, and of course it was revoked by the Bolsheviks in due course. So, Citibank came back, and I was asked would you like to come to Russia to be part of this.
Daniel Satinsky: Were you asked, or you pushed for it?
Steven Fisher: No, it’s always both because, you know, you have to express interest. And listen, there were not many people wanting that job. That was very wild then, and it was a very, very tough assignment living in Russia. It was a hardship post, as Citibank would say. It was a hardship post.
Daniel Satinsky: And at that time what was Citibank’s reasoning? Why then and what kind of due diligence did they do before jumping into Russia in those years?
Steven Fisher: Well, you know, you have to read my first book, “Into Russia’s Cauldron,” because it is a complete repeat of the story that happened in 1916.
Daniel Satinsky: Ah, okay.
Steven Fisher: And that was a true story. And history, believe it or not, was repeating itself very much to the single letter. But Citibank thought that, well, wait a minute, if the country is changing, and it may—you know, this is already 1993, the fall of the Soviet Union, if it’s going—which happened in 1991—if Russia is going to change and open up to the world, there’s an enormous amount of business opportunities to open up all these industries, and American technology, American capital, American management expertise, all of the foreign investment that would flow into Russia that Citibank, with its global network, cash management network and the fact that it has customers in all different countries, it was just a very logical business opportunity for Citibank. And Citibank, as other foreign banks, jumped in and said let’s take advantage of it.
Daniel Satinsky: And basically, then it was to service or facilitate international entry into Russia, so your clients were going to be international companies, correct?
Steven Fisher: Yeah. Well, it’s a two-part story, which happens with Citi all over the world. In the beginning it was exactly that. Citi had thousands of multinational clients. Proctor & Gamble, for example, wants to sell its toothpaste and its deodorant and its products to Russians, or Ikea, or Chevron wants to create an oil production facility or refinery, etc. So, every company, every international company, be it American or European or Japanese, they had their own business opportunities and interests in Russia, and Citi was there to help them with mundane things like FX, cash management, but also more advanced commercial and investment banking projects like mergers and acquisitions, long-term capital financing, export credit financing, a whole bevy of different financial products, from simple to quite complex. That was Phase 1.
But Phase 2 followed logically, a lot more slowly, but it logically followed, is that ultimately once you had your foot in Russia and you understand what’s starting to happen in Russia, you’re looking at the Russian companies themselves, or state enterprises that were transforming into some form of private company and asking how can we help them as well, because they need the same expertise, the same services as they develop and invest in Russia, and as they might start thinking about they might need to outreach outside of Russia, they need to import technology and goods, raw materials. They need to sell in foreign currencies and therefore hedging and FX transactions. They will have cash and rubles and then dollars or euros or pounds. They need a bank that knows how to manage those cashes and facilitate cash flow.
So, it only made sense, and it happened, but it took slower for Citi and again, all the other foreign banks doing the same thing, to start working with Russian companies. And in those days, this is up to 1998, it was very hard to work with Russian companies for several reasons. First, they had almost no audited, printed, financial statements, so you had no idea what is going on in this company, who really owns it, what are their state of finances, what do they do with their money. You really didn’t know. And without that kind of knowledge there’s no way you’re going to lend them money because it’s like putting money in a very dangerous black or red box.
And in the late 1990s, as you know, Russia was really the Wild East, so you had to be extremely careful, for those reasons that I just mentioned, but also Citi, as an international American listed company, with very high American professional standards, had to be very, very careful who it worked with. The due diligence was astronomically important, and very difficult. You cannot work with a criminal. You have to know where did this money come from, how did this company form, who owns it, and that meant that most of the Russian companies that were forming, and might have been interested in working with a bank like Citibank, we probably just couldn’t work with them for reasons of professional due diligence and keeping that bar very, very high. So, that was a very big challenge in the late 1990s.
But by the early 2000s, when oil prices started coming up, the Russian companies realized that, well, you know, in order to create more value and to make their shareholders richer, they really should adopt, as best as they could or they wanted to, Western standards of transparency, compliance, management, etc., so you saw, in the early 2000s, a gradual transformation of a lot of newly formed or transformed Russian companies trying to adopt to Western standards. And some of them did it better than others, but it was still very difficult because you still could not drop your professional standards, your due diligence standards. It was still very difficult to work with a lot of companies. And basically, Citi ultimately went with a small selection of them for those reasons.
And I had moved to Russia ultimately. I was looking at a position in 1997 right before the currency crisis in August 1998, but for personal reasons, you know, an opportunity came up in London to do emerging markets and I decided to be in London first for those years from 1997 to 1999 at that time. No, excuse me, from 1999 to the beginning of 2002.
Daniel Satinsky: Okay, but before we—back to the 1993, 1990s, you were involved with the bank at that point, or you were not?
Steven Fisher: No, I was in the bank. I was in the bank.
Daniel Satinsky: But you weren’t involved with the Russian office?
Steven Fisher: No, I was not. I was looking at it. I was starting to reach out to get to know these people and understand what they were doing. But in terms of, you know, I started going to Russia for business in 1997 and 1998.
Daniel Satinsky: Ah, okay, as part of emerging markets.
Steven Fisher: Yeah, as that bigger emerging markets focus and bailiwick. I wasn’t posted in Russia at that time. But starting in 1997 I was very embedded doing corporate finance, going there every month, starting to meet Russian clients, working closely with my Russian colleagues.
Daniel Satinsky: And Citibank had Russian nationals who were part of the staff back then?
Steven Fisher: Yeah, it certainly did, it certainly did, and… But funny enough, I think I was probably the only foreigner—and I wasn’t even stationed there—who actually spoke Russian, who had the Russian studies academic background. So, I was, again, pretty young at the time. What was it, 1978, so I’m only…. 1970—no-no, excuse me, not—1997, so I am like 38 years old.
So, I’m not in Russia yet, but I’m very much involved in 1997, 1998. And then of course in August 1998 was the collapse of the ruble, and Russia sort of went bankrupt and defaulted on its foreign currency obligations, and that slowed things down in Russia for about two or three years.
Daniel Satinsky: And what did you think yourself when that happened? Did you think this is over, or did you think this is a temporary setback? How did you, as a person in the banking industry and in emerging markets, think about that?
Steven Fisher: Well, yeah, it was a shock to everyone, although some people saw it coming. But from a banker’s point of view, it was like okay, the risk rating of this country has just plummeted and, you know, all the red flags are out there, so don’t lend any money, cut down on your credit exposure if you had some, watch the space. But we never exited. We did not exit because Russia still was opening up. They got hit on the head with a sledgehammer, you might say, but they were still out there. And frankly, when you’re just doing FX transactions for foreign—for multinationals who need you desperately to do that, that’s basically a zero-risk business. So, the bank—
Daniel Satinsky: So, Citibank didn’t lose money in that.
Steven Fisher: Oh, no, it did. It lost a few, like $150, $200 million because it had exposure to Russian government assets, and—
Daniel Satinsky: Ah, the GKOs*?
Steven Fisher: Yeah, exactly. So, it’s too bad that happened to Citi, but it did happen. And again, it just…it is a parallel to what happened to Citibank in 1917. So, you go back to my book, and you say oh my god, Citibank lost money then. In those days they lost $10 million, which you think oh, that’s nothing, but $10 million in 1917 represented 10% of Citibank’s global capital.
Daniel Satinsky: Whoa.
Steven Fisher: So, that was almost enough to bankrupt, you know, to crater the whole bank in those days, so that was a serious, serious blow to Citi in 1917, 1918 when that happened. And guess what, it happened again. This time the loss was 10, 20 times larger, but that loss as a percentage of Citibank’s capital was much, much smaller, so it didn’t really stop or dent Citibank much at all. It gave them a black eye, you might say, but it didn’t stop Citi. And Citi was still… And again, it’s not just Citi, it’s other foreign banks as well, the HSBCs, the Lloyd’s bank, Credit Lyonnaise, the German banks. Banks were still there, but they obviously really slowed down between 1998 and 2001.
And what happened in 2001? The price of oil started going up, and all of a sudden Russia be—you know, Russia was exporting oil, as you know, as their lifeline, and all of a sudden exports of oil brought in enormous amounts of much greater revenue, and Russia’s macro financial position started to improve greatly, and all these companies started to once again benefit from that oil boom, because the oil boom did trickle down, in conjunction with a lot of what I would call modified and more liberal financial policies and economic management policies that Putin started implementing once he became president in 2000. It just led to a big renaissance of Russian business, so by 2002 Russia was really very ebullient, buoyant, and starting to go places because of that oil price boom. So, banks reoriented once again, saying, well, wait a minute, what happened in 1998, those days are gone, we’ve learned our lesson, but the opportunities are back, and they’re bigger and better than ever. And at that minute I moved to Russia and started working in Russia.
Daniel Satinsky: So, 2002?
Steven Fisher: Yeah, March 2002 I moved to Russia with my family I had my wife and my two young girls. They went to the American—you know, the stories are endless. They ended up going to the American school, Anglo-American school in Moscow, which was obviously closed recently by the Russians. But we moved there and started to really embed ourselves in Russia. And it was the beginning of the big oil price driven economic boom in Russia.
Steven Fisher: Oh, Daniel, it is an interesting story with a lot of serendipitous twists along the way, so I’ll start from the very beginning and paint this picture. So, basically it started in high school. In those days in my public high school in Port Chester, New York you had a choice of studying Italian, Spanish or French as a foreign language. That was it. That’s all my school offered. And of course I was studying Spanish.
But in my junior year one of the language teachers said hey, you know, I teach Russian as well, would you be interested? And I thought, oh, that’s really, really very interesting, and I said yes. So, on the side she started teaching me very, very elementary Russian, my god. But it was an old textbook, and it was a good start. I was the only person in the entire school who signed up for this little extracurricular activity, you might say, Daniel, but it opened a world of fascination to a language—
Daniel Satinsky: Just briefly, what year was this?
Steven Fisher: This was in 1976. No-no, it wasn’t. Yeah, I guess in 1976. We were deep in the Soviet Union in those days and Russia. You know, in addition to the language being fascinating and having this teacher willing to take her personal time, basically, to open this world to me and spend a little time teaching me basic Russian, it really did kindle quite a fascination. And because of that, I graduated high school, and I went to Cornell University in Ithaca, New York, and I was a political science major, but very quickly in my freshman year that bug on Russia came back, and I joined a special program. It’s called the College Scholar Program where you’re able to design your own major. And I thought that well, you know, Russia—or the Soviet Union at that time—was such a massive presence, and it was our competitor in the world, and it was warranted for many reasons to study this in-depth. And I was obviously already hooked on Russia from an early age.
So, I took up a major that I created called Sino-Soviet Studies, so I was studying Russia and also started to study China as well, because I thought that these three—plus with the United States—these three powers really sort of dominated the world scene, and one had to be proficient in understanding them to be part of a solution or an ongoing engagement. So, that’s how it started. This was in 1977. And I kept studying Russian, and in my sophomore year I started studying Chinese as well, and the major went very well. What I was studying was basically political science and history, more or less starting from the Bolshevik revolution era in the early 20th century to present, and then about the same parallel for China as well. So, I tell you, one week I’d be studying the collective speeches of Brezhnev, and then it would be looking at dipping inside Mao Zedong’s little red book.
And I started studying Chinese, which just took that fascination with language one step further, because as you can imagine, Russian already is quite exotic, and when you go to Chinese you’re almost in a different world. And I remember the first, after basically one semester of Chinese at Cornell, they gave us the first book to read. And it was of course not complex. It was sort of like probably a sixth grader’s book in China. But to read a book in just Chinese characters was such a feeling of empowerment and fascination that that kept me going.
So, two things happened at that time, very pivotal things in my life and in my career, and I will tell you both of them. So, first—I love these stories—so first, both serendipities plus very fatalistic, the first thing that happened is over one vacation in early, sometime in 1978 I went back home. I was in my grand—my grandmother was living at our house during that time, and she pulled out a shoebox because she knew I started studying Russian at Cornell. So, she pulled out a shoebox, and in this shoebox were letters from the Soviet Union dated 1960.
So, my grandmother emigrated from the Russian empire. It wasn’t even the Soviet Union then. She immigrated to the U.S. around 1905. And her naturalization certificate at Ellis Island, in identifying her, called her a grazhdanstvo [citizenship], what was it called? Of the Russian empire— predmet, premet Russkoi Imperii, a subject of the Russian empire, which is really fascinating. So, this is where my grandmother enters the story as a predmet Russkoi Imperii who immigrated to the United States circa 1905. She pulls out this very ragged shoebox of letters, and I start reading them, and of course I can’t read them perfectly because my Russian still at that time was not at such an adequate level. But these were letters from her brother to her.
And her brother never succeeded in emigrating to the United States. The plan was back in 1905 send a few young people—you know the story well with immigrants—start working, earn some money. You earn enough money and establish yourself, bring everyone else over. But the World War I erupted, the Bolshevik revolution interceded, and some of her family, because of those events, never succeeded in leaving Russia, and then ultimately it became the Soviet Union. So, it turns out that one branch of my family never left Russia and grew up in Russia.
And fast forward to 1960, and her brother, who was still there, is writing letters to her. And he’s still alive by—he was still alive at that time. So, I took a letter—and this is 1978—from 1960 and just out of a lark, in my still fairly poor Russian, wrote back to him at the same address—no-no-no, excuse me. My grandmother’s brother had died already by that time. He was already passed away. But anyway, I wrote back to that address in a lark, and then believe it or not, almost three months later a letter came back from the Soviet Union, that same address. And who wrote it but the grandson of that original grandfather, the brother of my grandmother who passed away many, many years ago.
So, this family connection, lost for almost 20 years and broken for almost a century, came back to life and I started to write him. And this is 1978. This is the heart, this is deep in Soviet times. And that’s why it took three months to get a letter through the censors, and it’s amazing you even got the letter period. But we started corresponding. And what happened—you know, I’ll just finish this thread, because there are some other ones as well that are pivotal in the story we’ll tell today.
So, how that developed is we kept corresponding over the years, and after I graduated Cornell in ’81 I went to Georgetown, where I was getting my master’s in foreign service. And I was already in Asia at the time. We’ll talk about that in a second. But in 1983 I was in Hong Kong for my first assignment—well, one of my assignments with Citibank—and I wrote to him, and I said well, you know, I’m in Hong Kong, why don’t I try to visit you? I’ll take the Trans-Siberian train. I’ll fly up to Beijing, I’ll take the Trans-Siberian train from Beijing to Moscow, and maybe you can meet me in Moscow.
And my relatives at this time, I don’t know what I would call him, like a second cousin, or exactly how you would define that, they were living in Yevpatoria, which was in the Crimea, not far from Simferopol, like, you know, 30—less than a 60-minute drive from Simferopol. They were living in Yevpatoria, which is a beautiful seaside town full of health resorts and things like that.
So, I got my Russian visa—my Soviet visa. This was during Andropov, I believe. And I got the visa, ended up in Beijing, and took the train, a seven-day train, all across Eurasia, which was probably the most amazing journey I ever had in my life. And Daniel, it was probably the most cost-effective journey because I think the cost of each kilometer of travel was 50 cents or something like that. The whole journey in the second-class coupe was like $200 one way. And in that wagon, I was, you know, in those days foreigners were put in a special foreigner car. You were not allowed to mix with Russians, basically. So, I had another American, an Italian, and a British guy, the four of us, and we had a simply wild time going across Eurasia, ending up in Moscow. So, that really added to my Russian adventure to such a high degree, that whole family episode.
But let’s go back in time because there was a strategic interruption. And back again to 1978. So, now I am once again a sophomore at Cornell, I am a Russian, Sino-Soviet studies major. I’m already two years of college Russian under the belt. And I applied for the summer language program, as many did in those days, to the Leningrad State University Russian language program for the summer of 1980, which made a hell of a lot of sense, given what I was doing. And I got accepted. And just something happened, though, and it was December 25, 1979. The Soviet Union invaded Afghanistan, and the relations with the U.S. and Russia just fell apart, and they were very, very bad. And I was just looking at the overall situation and asking myself wait a minute, do you really want to go to the Soviet Union in this situation? Because these were really very, very tough times. And I started thinking maybe that wasn’t the right time for this.
And I applied, because I had now started studying Chinese, I applied for a summer Chinese language program in Taipei, Taiwan, the Stanford program, which again was the premier language program to study Chinese abroad. And in those days, in 1978, as you can imagine, going to Mainland China was very tough. Very few people did it. and people were just basically saying listen, if you want to get a better opportunity to mix with Chinese and study Chinese, you’re better off going to Taipei than going to Mainland China. And by the way, afterwards I found out that the food is a hell of a lot better in Taipei than it was in Beijing at the time, among other things.
So, I made that shift. I did not go to Leningrad. I went to Taipei and studied Chinese that summer. This was the summer of 1980. And the Chinese I met, the Chinese I learned, the other foreigners who were there studying with me turned out to be an absolutely amazing period. And it was well worth it. It was a great decision. But what that meant was that now that emphasis on China really tipped the scale. And there’s another reason for that.
You know, just look at this. You’re about to graduate your university—this is the beginning of 1981—and you’re thinking okay, what am I going to do with my political science Sino-Soviet studies degree? And in those days, there was very little you could do with Russian studies—academia, or the State Department, or maybe the CIA. There was no business at all, basically—very, very, very little, so the job opportunities were quite limited. But with China and Asia things were really booming. China was opening up. And I said well, you know, now that I’ve got both of these under my belt—and in those days not many people were studying Chinese, so you still had, as an American you had a relatively rare skill set than many other people.
So, I decided to increase my emphasis on China at that time. And a few things happened that helped me. So, I applied to Georgetown for my master’s. I started in the fall of 1982, and now I had two summers of Chinese study under my belt. Fall of 1982. And during that first year at Georgetown, Georgetown sponsored a cocktail party with recently graduated alums in New York City. So, I took the train from Washington and went up to New York City and went to this event. And I met a gentleman called Lou [Viada] who had graduated Georgetown MSFS three years, four years before I did, and he was employed by Citibank in their brand-new opened Peoples Republic of China representative office. And he looks at my C.V., and he goes, well, how would you like a summer internship with Citibank? Join me in Hong Kong for the summer and help us with our new representative office. And it took me about three seconds to say I’m on board for sure.
Daniel Satinsky: Absolutely.
Steven Fisher: So, I go out there, and I was still thinking State Department at that time. But what happened was working with Citibank I realized hey, you know, I can do this stuff, too. I didn’t have accounting then. I didn’t really have a—I didn’t have an MBA. I was pursuing international relations with a Sino-Soviet angle at Georgetown as well. But I realized that I could do this. And Citi offered me a job after that summer and said when you get your degree at Georgetown the next year join us, and we’ll put you in the training program, and we’ll teach you everything you don’t know. It was a half year training program—accounting, finance, credit work, you know, how to be a banker. It was a very, very tough program. It was tantamount to half an MBA courtesy of Citibank. But the catch was if you failed any of the exams you would lose your job, you’d be fired.
Daniel Satinsky: Oh, wow.
Steven Fisher: So, it was very high pressure, and not easy, because my background was not—I did not have an MBA background, it was international relations. But I passed, luckily, and I was accepted. And after one year in New York doing M&A and other kinds of high-ranking kind of leveraged capital business they sent me—my wish was to be sent as an international staff to Taiwan, and they said that’s where we’re going to send you.
And for the next six or seven years I was working in Taiwan as an international staff of Citibank, doing a lot of great things, very much embedded into banking. And enjoying being in Asia. I started studying Japanese as well, which in those days was the other professional language. You really had to understand Japan in those days. Just imagine 1980, you know, Japan was the future power—like we say about China now, everyone was saying that Japan was the future economic power of the world. So, I started studying Japanese as well just to round out that Asian experience. So, let’s continue the timeline.
Daniel Satinsky: Yeah, let’s jump to the Soviet Union.
Steven Fisher: Where does Russia come back in? So, basically 1989 the Berlin Wall falls. I’m in Taiwan and I’m going wait a minute, you know, the whole world just changed, the Berlin Wall has fallen, Russia and Eastern Europe is opening up now—now why don’t I go back to my Russian studies roots and take advantage of everything I’ve done, and do something that I’ve always wanted, why don’t I shift my focus. It was pretty daring to do that because Asia was really booming. Why don’t I shift my focus back to Russia and pursue that now that the business opportunities were opening up. And of course I was in Citibank, and that was a great place to be. I felt I had a long-term career there. But I saw that now Eastern Europe and Russia could be part of that long-term Citibank career trajectory. So, I started to shift. I was planning to do that.
Daniel Satinsky: And was Citibank also shifting at the same time or were you [trying to] push them there?
Steven Fisher: Absolutely. No, no, I didn’t. I was a very low-level guy. But in 1993 Citibank decided, after leaving, or being kicked out of Russia in 1918, Citibank decided to come back to Russia, and they opened up a representative office in 1993. And in 1994 they received their commercial banking license, which they had originally received on December 31, 1916, and of course it was revoked by the Bolsheviks in due course. So, Citibank came back, and I was asked would you like to come to Russia to be part of this.
Daniel Satinsky: Were you asked, or you pushed for it?
Steven Fisher: No, it’s always both because, you know, you have to express interest. And listen, there were not many people wanting that job. That was very wild then, and it was a very, very tough assignment living in Russia. It was a hardship post, as Citibank would say. It was a hardship post.
Daniel Satinsky: And at that time what was Citibank’s reasoning? Why then and what kind of due diligence did they do before jumping into Russia in those years?
Steven Fisher: Well, you know, you have to read my first book, “Into Russia’s Cauldron,” because it is a complete repeat of the story that happened in 1916.
Daniel Satinsky: Ah, okay.
Steven Fisher: And that was a true story. And history, believe it or not, was repeating itself very much to the single letter. But Citibank thought that, well, wait a minute, if the country is changing, and it may—you know, this is already 1993, the fall of the Soviet Union, if it’s going—which happened in 1991—if Russia is going to change and open up to the world, there’s an enormous amount of business opportunities to open up all these industries, and American technology, American capital, American management expertise, all of the foreign investment that would flow into Russia that Citibank, with its global network, cash management network and the fact that it has customers in all different countries, it was just a very logical business opportunity for Citibank. And Citibank, as other foreign banks, jumped in and said let’s take advantage of it.
Daniel Satinsky: And basically, then it was to service or facilitate international entry into Russia, so your clients were going to be international companies, correct?
Steven Fisher: Yeah. Well, it’s a two-part story, which happens with Citi all over the world. In the beginning it was exactly that. Citi had thousands of multinational clients. Proctor & Gamble, for example, wants to sell its toothpaste and its deodorant and its products to Russians, or Ikea, or Chevron wants to create an oil production facility or refinery, etc. So, every company, every international company, be it American or European or Japanese, they had their own business opportunities and interests in Russia, and Citi was there to help them with mundane things like FX, cash management, but also more advanced commercial and investment banking projects like mergers and acquisitions, long-term capital financing, export credit financing, a whole bevy of different financial products, from simple to quite complex. That was Phase 1.
But Phase 2 followed logically, a lot more slowly, but it logically followed, is that ultimately once you had your foot in Russia and you understand what’s starting to happen in Russia, you’re looking at the Russian companies themselves, or state enterprises that were transforming into some form of private company and asking how can we help them as well, because they need the same expertise, the same services as they develop and invest in Russia, and as they might start thinking about they might need to outreach outside of Russia, they need to import technology and goods, raw materials. They need to sell in foreign currencies and therefore hedging and FX transactions. They will have cash and rubles and then dollars or euros or pounds. They need a bank that knows how to manage those cashes and facilitate cash flow.
So, it only made sense, and it happened, but it took slower for Citi and again, all the other foreign banks doing the same thing, to start working with Russian companies. And in those days, this is up to 1998, it was very hard to work with Russian companies for several reasons. First, they had almost no audited, printed, financial statements, so you had no idea what is going on in this company, who really owns it, what are their state of finances, what do they do with their money. You really didn’t know. And without that kind of knowledge there’s no way you’re going to lend them money because it’s like putting money in a very dangerous black or red box.
And in the late 1990s, as you know, Russia was really the Wild East, so you had to be extremely careful, for those reasons that I just mentioned, but also Citi, as an international American listed company, with very high American professional standards, had to be very, very careful who it worked with. The due diligence was astronomically important, and very difficult. You cannot work with a criminal. You have to know where did this money come from, how did this company form, who owns it, and that meant that most of the Russian companies that were forming, and might have been interested in working with a bank like Citibank, we probably just couldn’t work with them for reasons of professional due diligence and keeping that bar very, very high. So, that was a very big challenge in the late 1990s.
But by the early 2000s, when oil prices started coming up, the Russian companies realized that, well, you know, in order to create more value and to make their shareholders richer, they really should adopt, as best as they could or they wanted to, Western standards of transparency, compliance, management, etc., so you saw, in the early 2000s, a gradual transformation of a lot of newly formed or transformed Russian companies trying to adopt to Western standards. And some of them did it better than others, but it was still very difficult because you still could not drop your professional standards, your due diligence standards. It was still very difficult to work with a lot of companies. And basically, Citi ultimately went with a small selection of them for those reasons.
And I had moved to Russia ultimately. I was looking at a position in 1997 right before the currency crisis in August 1998, but for personal reasons, you know, an opportunity came up in London to do emerging markets and I decided to be in London first for those years from 1997 to 1999 at that time. No, excuse me, from 1999 to the beginning of 2002.
Daniel Satinsky: Okay, but before we—back to the 1993, 1990s, you were involved with the bank at that point, or you were not?
Steven Fisher: No, I was in the bank. I was in the bank.
Daniel Satinsky: But you weren’t involved with the Russian office?
Steven Fisher: No, I was not. I was looking at it. I was starting to reach out to get to know these people and understand what they were doing. But in terms of, you know, I started going to Russia for business in 1997 and 1998.
Daniel Satinsky: Ah, okay, as part of emerging markets.
Steven Fisher: Yeah, as that bigger emerging markets focus and bailiwick. I wasn’t posted in Russia at that time. But starting in 1997 I was very embedded doing corporate finance, going there every month, starting to meet Russian clients, working closely with my Russian colleagues.
Daniel Satinsky: And Citibank had Russian nationals who were part of the staff back then?
Steven Fisher: Yeah, it certainly did, it certainly did, and… But funny enough, I think I was probably the only foreigner—and I wasn’t even stationed there—who actually spoke Russian, who had the Russian studies academic background. So, I was, again, pretty young at the time. What was it, 1978, so I’m only…. 1970—no-no, excuse me, not—1997, so I am like 38 years old.
So, I’m not in Russia yet, but I’m very much involved in 1997, 1998. And then of course in August 1998 was the collapse of the ruble, and Russia sort of went bankrupt and defaulted on its foreign currency obligations, and that slowed things down in Russia for about two or three years.
Daniel Satinsky: And what did you think yourself when that happened? Did you think this is over, or did you think this is a temporary setback? How did you, as a person in the banking industry and in emerging markets, think about that?
Steven Fisher: Well, yeah, it was a shock to everyone, although some people saw it coming. But from a banker’s point of view, it was like okay, the risk rating of this country has just plummeted and, you know, all the red flags are out there, so don’t lend any money, cut down on your credit exposure if you had some, watch the space. But we never exited. We did not exit because Russia still was opening up. They got hit on the head with a sledgehammer, you might say, but they were still out there. And frankly, when you’re just doing FX transactions for foreign—for multinationals who need you desperately to do that, that’s basically a zero-risk business. So, the bank—
Daniel Satinsky: So, Citibank didn’t lose money in that.
Steven Fisher: Oh, no, it did. It lost a few, like $150, $200 million because it had exposure to Russian government assets, and—
Daniel Satinsky: Ah, the GKOs*?
Steven Fisher: Yeah, exactly. So, it’s too bad that happened to Citi, but it did happen. And again, it just…it is a parallel to what happened to Citibank in 1917. So, you go back to my book, and you say oh my god, Citibank lost money then. In those days they lost $10 million, which you think oh, that’s nothing, but $10 million in 1917 represented 10% of Citibank’s global capital.
Daniel Satinsky: Whoa.
Steven Fisher: So, that was almost enough to bankrupt, you know, to crater the whole bank in those days, so that was a serious, serious blow to Citi in 1917, 1918 when that happened. And guess what, it happened again. This time the loss was 10, 20 times larger, but that loss as a percentage of Citibank’s capital was much, much smaller, so it didn’t really stop or dent Citibank much at all. It gave them a black eye, you might say, but it didn’t stop Citi. And Citi was still… And again, it’s not just Citi, it’s other foreign banks as well, the HSBCs, the Lloyd’s bank, Credit Lyonnaise, the German banks. Banks were still there, but they obviously really slowed down between 1998 and 2001.
And what happened in 2001? The price of oil started going up, and all of a sudden Russia be—you know, Russia was exporting oil, as you know, as their lifeline, and all of a sudden exports of oil brought in enormous amounts of much greater revenue, and Russia’s macro financial position started to improve greatly, and all these companies started to once again benefit from that oil boom, because the oil boom did trickle down, in conjunction with a lot of what I would call modified and more liberal financial policies and economic management policies that Putin started implementing once he became president in 2000. It just led to a big renaissance of Russian business, so by 2002 Russia was really very ebullient, buoyant, and starting to go places because of that oil price boom. So, banks reoriented once again, saying, well, wait a minute, what happened in 1998, those days are gone, we’ve learned our lesson, but the opportunities are back, and they’re bigger and better than ever. And at that minute I moved to Russia and started working in Russia.
Daniel Satinsky: So, 2002?
Steven Fisher: Yeah, March 2002 I moved to Russia with my family I had my wife and my two young girls. They went to the American—you know, the stories are endless. They ended up going to the American school, Anglo-American school in Moscow, which was obviously closed recently by the Russians. But we moved there and started to really embed ourselves in Russia. And it was the beginning of the big oil price driven economic boom in Russia.
Daniel Satinsky: Where were you living?
Steven Fisher: I was living in Rosinka, which was a big—it was mainly foreigners who lived, although Russians lived there as well—a big housing compound. A very, very lovely housing compound about, depending on how bad the traffic was, anywhere from 30 minutes to three hours’ drive from the center of Moscow on Leningradskoe Shosse* up towards Mozhaysk area. But a very comfortable place, very, very nice. Somewhat removed from the center of Russia, but quite accessible as long as the traffic wasn’t horrendous on any particular day.
And we made a lot of friends there and really, really enjoyed living there. The school commute for the kids was sometimes not so good, either, depending on the traffic. And it just got worse over time, and we ultimately moved, three years later or four years later, to Pokrovsky Hills, which was a compound, a lovely townhouse compound that was situated right next to the Anglo-American school.
Daniel Satinsky: When we’re finished, I’ll tell you a story about Rosinka, but go ahead.
Steven Fisher: Well, anyway, so we moved there. We’re jumping ahead, but we were just talking about living arrangements, right? And we’ll go back again.
Daniel Satinsky: Right. So, 2002. How big was the office when you moved there?
Steven Fisher: It must have been, oh god, about…in 2002 it probably was close to a hundred people at that time.
Daniel Satinsky: About a hundred people, so it had grown substantially over that period.
Steven Fisher: Yeah. Well, when I had left, stopped going in 1998 when the default happened, I think at that time it was probably 50, 60 people, and it gradually grew. I can’t remember exactly. I think it was something between 60 to 100 people when I moved there. That grew very quickly.
Daniel Satinsky: Russian nationals?
Steven Fisher: Mainly Russian nationals, but in those days, there were probably about 10 to 15 expats, which was a very large amount now in Russia, no surprise, for several reasons. One, because the Russians still did not really have the Western banking skills, so you had to bring in much more experienced Western bankers to help train and infuse that knowledge. And then of course the management in the process. But the Russians we hired were very smart, Western oriented, and they learned quickly, and they performed very, very well.
And I’ll just go back to a quote. This is January 2002, just when I accepted the position in Moscow and before I actually moved there in the beginning of March. I still remember a colleague going to me, an English colleague or an American colleague in London going, oh, you’re moving to Russia. And then she asked is that what you wanted?
Daniel Satinsky: [Laughs.]
Steven Fisher: As if I was being sent on a “Shtraf battalion”* or I was being sent as a punishment assignment or something.
Daniel Satinsky: Right,. This was true even in 2002, yeah?
Steven Fisher: I found that really amusing. But in a way, I said, this is great because that means that most people don’t know what I’m onto. They don’t know what’s happening now in Russia, and I am going to be helping open a really broad, exciting new frontier.
Daniel Satinsky: Right. And so, were you…so socially, once you’re located there and you’re in the bank, you’re busy, are you integrated into the expat community, or you leach into Russian society, to the extent that they’re different? Socially, what was your milieu like?
Steven Fisher: Okay, good question. Well, I was extremely integrated both into Russian society and, of course, naturally, with the expat community as well. And the expat community, as you know, was very, very broad. It wasn’t just American, it was European, Japanese, a smattering of other Asians as well, a few Latinos from Mexico, for example. I can tell you so many stories. But then again, read my new anthology book, you’ll know the story there. But anyway, back to that question.
Being a banker in a private company, I had no restrictions, unlike my American colleagues who worked in the U.S. embassy, who had a lot of restrictions, who ultimately didn’t know many Russians, or couldn’t go out, for whatever reasons, to the bars, to the restaurants, to the clubs, the nightclubs and everything. Their access to Russians was, in a way, curtailed or even self-limited. But for me that never happened. There were a few reasons for that.
One is that my connections in the expat community were exceptionally broad because my customers—I was a customer banker—my customers, I had 500 multinational customers who were working with Citi in Russia from all over the place, and I knew these people. So, I’d go out with my Japanese client one day, I’d meet my Singaporean ambassador friend, I’d be with various Europeans, various Americans, so I had a very, very broad integration with everyone in the expat community from every possible country because of my business, my clients.
And I was building the Russian clientele because I spoke Russian. We decided at that time, again because of the oil price boom, to really now dig into the Russian clientele and expand it quickly. Again, never foregoing the due diligence and the professional standards we had, but really get into that sector because it’s booming. And that was a great opportunity, and that’s what I did. So, I started meeting and being with Russians all the time. And they loved me because they knew I liked Russia, they knew I understood Russia. And we would go to Café Pushkin for kasha* in the morning, or we would go to restaurants, and there were plenty of them. I would be with the Russians all the time. And it helped my Russian get better, and it really gave me a great perspective.
And another thing I did, which was a great decision, is I never stopped studying Russian, and I never stopped trying to improve my understanding of Russia, so I hired a Russian teacher, and we studied Russian like twice a week for like the first two or three years I was there. And we did amazing things. So, we would read like Pushkin’s…oh, darn. What was the name of that, all those fabulous…what was his…? I’m so embarrassed to forget this because… Give me a second. I’m going to just Google it, and I’m so sorry for forgetting this because I read the whole book, but it was instrumental. Just give me a second.
Daniel Satinsky: Okay. It wasn’t “Onegin?”
Steven Fisher: I will find it because it is important... Yeah, “Yevgeny Onegin,” of course.
Daniel Satinsky: “Onegin,” yeah.
Steven Fisher: Which is a fabulous piece of Russian literature. And what we did is we read it in Russian. And this book that she gave me had the English side-by-side. No, actually, it didn’t. I was given that as a gift later. We read “Yevgeny Onegin” in the original Russian line by line. And of course this is Russian written in the 1820s, and a lot of the wording you wouldn’t understand in those days, so right by my side she would explain everything that I just couldn’t understand myself because she had that historical perspective. So, we would do this. And the other great thing about that arrangement is her brother happened to be the art director at the Tretyakov Gallery.
Daniel Satinsky: Oh, wow.
Steven Fisher: And he introduced me to all the modern Russian artists. I’d go to their studios; we would go out for tea. I would be given private tours of the Tretyakov Gallery. And I tell you, after two years I knew almost every piece of work in that gallery, and I could do my own tours, and I did for other foreigners visiting Moscow. I knew that art and the history of it so well because I had this amazing connection.
So, this is what I was doing, and it was intensely rewarding, as someone who was a Russian studies major, to have this great career opportunity, but these benefits, these cultural pluses, plus benefits that were happening because of the Russians I met.
Daniel Satinsky: Right. I want to go back to your recruiting of Russian clients. Who was your favorite Russian company that ended up being a client of yours?
Steven Fisher: Vimpelcom, the telecom company, was great. And I worked with Sibneft a lot. Vimpelcom was great because they were such a forward and Western engaging company. They did everything right. Plus, they had an amazing business proposition. And they went public in the U.S. stock exchange. Fabulous company to work with, growing, growing, growing. Just the kind of company Citibank wants, with good management.
I worked with Sibneft, which was owned by [Roman] Abramovich, which you had to be a little more careful about because he was an oligarch, but we did a lot with them. One of the reasons is that the chief financial, you know, corporate financial officer happened to be English and a friend of mine, so I was able to work with that company through the eyes and hands of an Englishman who I trusted a lot more than others at that time, so that was a window, to work with him. But that was another company we did a lot with back in those days. And lots of different companies, frankly, but that’s two examples.
Daniel Satinsky: Yeah, two examples and ones that you—
Steven Fisher: We did billions of dollars of financing with these companies. Now, another story, here’s another one, totally different. I started getting to know Nizhnekamskneftekhim. Now this client existed before I got there, but I don’t know, probably not—they weren’t doing much at all with us. But Nizhnekamskneftekhim was in the…it was a chemicals producer, like PVC and other kinds of industrial chemicals and plastics. They were based in Tatarstan in the city of Nizhnekamsk one hour north of Kazan in the Republic of Tatarstan, smack in the middle of Russia.
So, I flew out to see them on these aging Tupolev’s, which, I’m still alive to tell the story, luckily, and I started meeting them. And this company was great. They were obviously very traditional, but they were expanding. They were building new factories with Western equipment. And I arranged several, you know, hundred millions of dollar financings to help them build new factories. And working with them was really a cultural opportunity. These were not even Russians. These were Tatars. They spoke, you know, when they wanted to talk to each other they didn’t even speak in Russian, they were speaking in Tatar. But I was doing great stuff for them because it was very enjoyable and rewarding to actually see a factory being built.
And I have to be honest. Most of the financing we saw in Moscow, which did represent the vast bulk of business in Russia, because so much economic wealth was centered in Moscow and the environs, it was mainly for working capital finance. I tell you, how much of that money ultimately went to pay dividends to the oligarchs? Probably a lot more than I’d ever imagine, and god knows. And once you give them the money, unless you’re financing receipts of equipment, you’re never exactly sure what they’re doing with that. You’re always reading their financial statements, it’s working capital. Okay, that’s legitimate. You know you’re not financing anything that’s corrupt or a bloated invoice, you’re not doing that. But still, money is fungible, and that’s what was happening back in those early 2000s, a lot of it, to the tune of hundreds of billions of dollars.
But in Nizhnekamsk nothing like that. It was basically we want to build a factory; we want to buy this Italian petrochemical equipment, can you help us finance that. And I did it in conjunction with the Italian export credit agency and other financing arms. And we saw factories being built. And working with Tatars was great. Even the president of Tatarstan personally went to the factory and wanted to have lunch with me, thanking me for bringing all of this foreign capital to help Tatarstan grow. That was great for every possible reason.
Daniel Satinsky: Yeah. For this kind of business were you competing with Russian banks at all?
Steven Fisher: No, no, no. In those days Russian banks couldn’t do anything like that. They didn’t have the personnel, they didn’t have the access, they didn’t have the training, they didn’t have the capital, they didn’t have the systems. They had nothing. Now of course right before 2022 that situation had changed. Banks like VTB, Sberbank really got their act together, and they expanded. They adopted Western management technology, product skills, systems, computer, you know.
Daniel Satinsky: Did they poach personnel from you guys?
Steven Fisher: Of course. It was the most logical hunting ground. Citibank was always a prime hunting ground for talent. It was the best of the best. If you wanted a skilled Russian banker, try to steal him from Citibank. But of course, it wasn’t just Citibank, there were other banks, but Citibank certainly was prime hunting ground.
Daniel Satinsky: Right. And so your role was in client relations, client development as much as the nuts and bolts of the lending?
Steven Fisher: Of course, yeah, I was involved. And of course I was involved in compliance. I was the first line of defense to basically say hey, these are guys we could probably work with or no-no-no-no, from what we know this company is going to be off limits. And in Citibank we had three lines of defense. So, the first line of defense is the front office officers like myself, who identify business opportunities, propose how to structure them, what products to use, what programs to take advantage of. And then it would go to our legal staff that would look at all the legal implications. That’s the second line of defense. And the third line of defense is compliance, which basically has another fresh view and say well, based on Citi’s global policies and our policies in Russia, and in similar countries and situations, this is something that we probably could do or this is something that just doesn’t meet our compliance standards. So, we had three lines of defense to keep ourselves from doing something we shouldn’t do.
Daniel Satinsky: Did your compliance people speak Russian, or did they use Russian, I don’t know, investigators to help them?
Steven Fisher: What we used, some of them were Russian, but they were mainly foreigners because compliance, in those days, was a very technical, high-level skill that only foreigners had. So, Russians didn’t even know, in the early 2000s, what the hell that meant, compliance, so forget that. It was basically foreigners. But of course, the foreigners did have Russian staff to help them look at all the Russian documentation, because that was critical. Although most of the lending and capital extensions were all based on English or American law, never on Russian law.
Daniel Satinsky: Right. But the underlying information that you gathered…
Steven Fisher: Yeah, of course it was from Russian sources, and you had to—
Daniel Satinsky: Russian sources.
Steven Fisher: You had to analyze that very, very carefully and doublecheck it. We did hire a lot of professional due diligence firms that employed Russian staff, ex-FSB or police. God knows the people they employed. But I knew some of the people they employed, and they were that kind of profile. And they did independent due diligence reports on this shareholder, or how did this company form, or where did this money come from. You always want to know where did the money come from.
Daniel Satinsky: Right. Yeah, I mean, Russian businesspeople are incredibly creative in structuring their business and maintaining their privacy, so that’s sort of why I was curious as to how you gathered the underlying information. It requires someone like that, that has an investigatory background, to know like how do you search for that.
Steven Fisher: Yeah, we spent a lot of money on Kroll and these other international due diligence firms. Very important, especially if you’re starting off with a new client. Before you engage you’ve got to make sure you know who you’re dealing with and you’re comfortable with it.
Daniel Satinsky: So, in this period when your business is booming, if you will, was it your assumption that it would always be this way and that Russia was inextricably integrated into this world economic system that you were also a major part of as Citibank?
Steven Fisher: That perspective changed, and it started to change in the fall of 2003, when Putin engineered the takeover of Mikhail Khodorkovsky’s Yukos. And that was a big bucket of cold water on the face. Now, first Yukos was one of Citi’s best customers at that time. And I still remember reading the news, that section in Rosneft, we’re going to take over Yukos. And I remember leaving Yukos’ office around that time, going back to Citi’s office, going oh well, we just lost one of our best customers.
And when that happened, we realized things were starting to change, you know, that the state was taking over, asserting its control. It’s well documented the process, the beginning of the power vertical, you might say, the beginning of this process of increased state ownership and control of the jewels of Russian industry, you might say. So, things started to change. And that was not the only episode. There were other episodes where companies started to fall under state control. And it forced us to reevaluate can we work with this company anymore, because the shareholders are different, and guess what, it seems like this company is now fulfilling the state’s wishes rather than an independent business value-driven perspective, you might say.
So, that changed the way we looked at companies, and as time progressed it became more and more pronounced that this shift was happening. And you basically start fine-tuning your client base taking into account these very clear, these very inexorable changes to the Russian economic structure and system.
Daniel Satinsky: And this was sort of well understood within the bank?
Steven Fisher: Yeah, it was. I think we did not make any mistakes in this regard. I think we saw it coming and we were following it carefully and adjusting our marketing policies and our approach accordingly. But I tell you, Yukos being taken over was… And don’t forget what was happening to all of the clients, the people I knew, like Steve Ridlington, who was arrested and kept incommunicado in his office, and had to flee. Or Jamison Firestone, a lawyer who had to flee. These are people who fled for their lives. I still remember another very interesting story—again, helping you understand this transition. An incredible, unforgettable dinner I had with red letter, you know, who wrote that book? It was…
Daniel Satinsky: Oh yeah, I know who you mean. Bill Browder.
Steven Fisher: Bill Browder. So, Bill Browder and I and a few other people were having dinner sometime, I guess, in the summer of 2005. I remember this. In a lovely restaurant just a few blocks’ walk from Citibank’s office on Gasheka Street, 8 Gasheka Street. I still remember the specific address. We’re having dinner and we’re talking about Gazprom because Gazprom was one of the biggest clients and biggest investments.
And he goes, you know, I never invest in a Russian company unless I understand its EBISA. And I asked him EBISA, what does that mean? This is an accounting term. I knew what EBIT is. EBIT is earnings before interest and tax. I knew with EBITDA was—earnings before interest, tax, depreciation and amortization. And I go Bill, I never heard of EBISA, what is that? He goes, Steve, it’s very simple, earnings before interest and stealing, you know, EBISA. Earnings before interest, stealing and whatever else. And I was like okay, I got you. And I go, well, that is a very logical thing, but quite dangerous.
And within months he was expelled from Russia. He dug too deep. He insisted on maintaining a Western standard, anti-corruption standard, and that cost him his job, and if he stayed it would have cost him his life. So, that was another interesting, what I call milestone in this transformation from the early 2000s, like starting in 2002, basically, to fall of 2003 with Yukos, the Bill Browder episode in the summer of 2005, and it just got worse. So, by 2010 we really…Citi had been focusing more on investment grade rated Russian government assets rather than a lot of these individual corporations, so it was starting to narrow its credit focus based on the continuing transformation of the Russian economic structure.
Daniel Satinsky: I see. And how long did you stay?
Steven Fisher: I left in March 2010. I probably overstayed my welcome. I probably should have left in 2008, but sometimes when you’re working in a career you don’t move exactly when you want to. So, I got out in March 2010, and where did I go? I moved to Kyiv and I became the country manager of Citibank’s Ukraine operation, which was very, very logical because I was covering Ukraine when I was based in Russia. We weren’t doing that much in Ukraine at the time, but I was familiar with the country. I certainly knew all the tricks.
And how you looked at Ukraine was not much different than how you looked at Russia. The same demand for extreme due diligence and caution, although Ukraine was far riskier in those days. It was never an investment grade country, whereas Russia was for many years when I was there. And I was the country manager of Citibank in Ukraine from 2010 to 2018, when I retired from Citi in 2018. And then one year after that I served on the board of Ukreximbank in 2019. And by the end of…by the beginning of 2020 I basically was no longer physically or heavily engaged in Ukraine, and I started my sort of writing career, you might say.
Daniel Satinsky: Writing career, yeah. So, how long did Citi stay in Russia?
Steven Fisher: Well, Citi was still there in 2022 when the war happened, when the invasion happened in February. And I think it is still there because it still has some legal obligations to wind down with its commercial bank back-office operations in Ryazan and some other areas. Citi is still physically there. It certainly has not been doing any new business since 2022.
It’s scaled down dramatically, but I still think there are some vestigial remnants of the operation only because of legal obligations to close out transactions that, for whatever reasons, still were not closed out. And sometimes it would just be for a foreign company that says hey, you promised to do this for me, and it had a three-year time horizon to it, you’d better finish what you promised to do. And in that situation Citibank just said okay, well, we’re just going to have to close this out, and the sooner we close it out, then we can close up shop completely.
Daniel Satinsky: Well, look, I think we’ve covered the things I wanted to cover, unless there are things that you wanted to talk about that we didn’t touch.
Steven Fisher: Well, Daniel, the question is, is there going to be a Round 3? If Round 1 was 1916 to 1918, Round 2 was 1993 ultimately to 2022—and in each round Western companies lost an enormous amount of money. The amount of money lost by foreign companies exiting Russia starting in 2014, particularly after 2022, is in the hundreds of billions of dollars. So, two lessons learned. Will there be a Round 3? And will we understand history and make sure we don’t repeat it once again? Time will tell.
Daniel Satinsky: Time will tell, yeah,. Thank you. I think that’s a good note to end the interview here with.
Steven Fisher: I was living in Rosinka, which was a big—it was mainly foreigners who lived, although Russians lived there as well—a big housing compound. A very, very lovely housing compound about, depending on how bad the traffic was, anywhere from 30 minutes to three hours’ drive from the center of Moscow on Leningradskoe Shosse* up towards Mozhaysk area. But a very comfortable place, very, very nice. Somewhat removed from the center of Russia, but quite accessible as long as the traffic wasn’t horrendous on any particular day.
And we made a lot of friends there and really, really enjoyed living there. The school commute for the kids was sometimes not so good, either, depending on the traffic. And it just got worse over time, and we ultimately moved, three years later or four years later, to Pokrovsky Hills, which was a compound, a lovely townhouse compound that was situated right next to the Anglo-American school.
Daniel Satinsky: When we’re finished, I’ll tell you a story about Rosinka, but go ahead.
Steven Fisher: Well, anyway, so we moved there. We’re jumping ahead, but we were just talking about living arrangements, right? And we’ll go back again.
Daniel Satinsky: Right. So, 2002. How big was the office when you moved there?
Steven Fisher: It must have been, oh god, about…in 2002 it probably was close to a hundred people at that time.
Daniel Satinsky: About a hundred people, so it had grown substantially over that period.
Steven Fisher: Yeah. Well, when I had left, stopped going in 1998 when the default happened, I think at that time it was probably 50, 60 people, and it gradually grew. I can’t remember exactly. I think it was something between 60 to 100 people when I moved there. That grew very quickly.
Daniel Satinsky: Russian nationals?
Steven Fisher: Mainly Russian nationals, but in those days, there were probably about 10 to 15 expats, which was a very large amount now in Russia, no surprise, for several reasons. One, because the Russians still did not really have the Western banking skills, so you had to bring in much more experienced Western bankers to help train and infuse that knowledge. And then of course the management in the process. But the Russians we hired were very smart, Western oriented, and they learned quickly, and they performed very, very well.
And I’ll just go back to a quote. This is January 2002, just when I accepted the position in Moscow and before I actually moved there in the beginning of March. I still remember a colleague going to me, an English colleague or an American colleague in London going, oh, you’re moving to Russia. And then she asked is that what you wanted?
Daniel Satinsky: [Laughs.]
Steven Fisher: As if I was being sent on a “Shtraf battalion”* or I was being sent as a punishment assignment or something.
Daniel Satinsky: Right,. This was true even in 2002, yeah?
Steven Fisher: I found that really amusing. But in a way, I said, this is great because that means that most people don’t know what I’m onto. They don’t know what’s happening now in Russia, and I am going to be helping open a really broad, exciting new frontier.
Daniel Satinsky: Right. And so, were you…so socially, once you’re located there and you’re in the bank, you’re busy, are you integrated into the expat community, or you leach into Russian society, to the extent that they’re different? Socially, what was your milieu like?
Steven Fisher: Okay, good question. Well, I was extremely integrated both into Russian society and, of course, naturally, with the expat community as well. And the expat community, as you know, was very, very broad. It wasn’t just American, it was European, Japanese, a smattering of other Asians as well, a few Latinos from Mexico, for example. I can tell you so many stories. But then again, read my new anthology book, you’ll know the story there. But anyway, back to that question.
Being a banker in a private company, I had no restrictions, unlike my American colleagues who worked in the U.S. embassy, who had a lot of restrictions, who ultimately didn’t know many Russians, or couldn’t go out, for whatever reasons, to the bars, to the restaurants, to the clubs, the nightclubs and everything. Their access to Russians was, in a way, curtailed or even self-limited. But for me that never happened. There were a few reasons for that.
One is that my connections in the expat community were exceptionally broad because my customers—I was a customer banker—my customers, I had 500 multinational customers who were working with Citi in Russia from all over the place, and I knew these people. So, I’d go out with my Japanese client one day, I’d meet my Singaporean ambassador friend, I’d be with various Europeans, various Americans, so I had a very, very broad integration with everyone in the expat community from every possible country because of my business, my clients.
And I was building the Russian clientele because I spoke Russian. We decided at that time, again because of the oil price boom, to really now dig into the Russian clientele and expand it quickly. Again, never foregoing the due diligence and the professional standards we had, but really get into that sector because it’s booming. And that was a great opportunity, and that’s what I did. So, I started meeting and being with Russians all the time. And they loved me because they knew I liked Russia, they knew I understood Russia. And we would go to Café Pushkin for kasha* in the morning, or we would go to restaurants, and there were plenty of them. I would be with the Russians all the time. And it helped my Russian get better, and it really gave me a great perspective.
And another thing I did, which was a great decision, is I never stopped studying Russian, and I never stopped trying to improve my understanding of Russia, so I hired a Russian teacher, and we studied Russian like twice a week for like the first two or three years I was there. And we did amazing things. So, we would read like Pushkin’s…oh, darn. What was the name of that, all those fabulous…what was his…? I’m so embarrassed to forget this because… Give me a second. I’m going to just Google it, and I’m so sorry for forgetting this because I read the whole book, but it was instrumental. Just give me a second.
Daniel Satinsky: Okay. It wasn’t “Onegin?”
Steven Fisher: I will find it because it is important... Yeah, “Yevgeny Onegin,” of course.
Daniel Satinsky: “Onegin,” yeah.
Steven Fisher: Which is a fabulous piece of Russian literature. And what we did is we read it in Russian. And this book that she gave me had the English side-by-side. No, actually, it didn’t. I was given that as a gift later. We read “Yevgeny Onegin” in the original Russian line by line. And of course this is Russian written in the 1820s, and a lot of the wording you wouldn’t understand in those days, so right by my side she would explain everything that I just couldn’t understand myself because she had that historical perspective. So, we would do this. And the other great thing about that arrangement is her brother happened to be the art director at the Tretyakov Gallery.
Daniel Satinsky: Oh, wow.
Steven Fisher: And he introduced me to all the modern Russian artists. I’d go to their studios; we would go out for tea. I would be given private tours of the Tretyakov Gallery. And I tell you, after two years I knew almost every piece of work in that gallery, and I could do my own tours, and I did for other foreigners visiting Moscow. I knew that art and the history of it so well because I had this amazing connection.
So, this is what I was doing, and it was intensely rewarding, as someone who was a Russian studies major, to have this great career opportunity, but these benefits, these cultural pluses, plus benefits that were happening because of the Russians I met.
Daniel Satinsky: Right. I want to go back to your recruiting of Russian clients. Who was your favorite Russian company that ended up being a client of yours?
Steven Fisher: Vimpelcom, the telecom company, was great. And I worked with Sibneft a lot. Vimpelcom was great because they were such a forward and Western engaging company. They did everything right. Plus, they had an amazing business proposition. And they went public in the U.S. stock exchange. Fabulous company to work with, growing, growing, growing. Just the kind of company Citibank wants, with good management.
I worked with Sibneft, which was owned by [Roman] Abramovich, which you had to be a little more careful about because he was an oligarch, but we did a lot with them. One of the reasons is that the chief financial, you know, corporate financial officer happened to be English and a friend of mine, so I was able to work with that company through the eyes and hands of an Englishman who I trusted a lot more than others at that time, so that was a window, to work with him. But that was another company we did a lot with back in those days. And lots of different companies, frankly, but that’s two examples.
Daniel Satinsky: Yeah, two examples and ones that you—
Steven Fisher: We did billions of dollars of financing with these companies. Now, another story, here’s another one, totally different. I started getting to know Nizhnekamskneftekhim. Now this client existed before I got there, but I don’t know, probably not—they weren’t doing much at all with us. But Nizhnekamskneftekhim was in the…it was a chemicals producer, like PVC and other kinds of industrial chemicals and plastics. They were based in Tatarstan in the city of Nizhnekamsk one hour north of Kazan in the Republic of Tatarstan, smack in the middle of Russia.
So, I flew out to see them on these aging Tupolev’s, which, I’m still alive to tell the story, luckily, and I started meeting them. And this company was great. They were obviously very traditional, but they were expanding. They were building new factories with Western equipment. And I arranged several, you know, hundred millions of dollar financings to help them build new factories. And working with them was really a cultural opportunity. These were not even Russians. These were Tatars. They spoke, you know, when they wanted to talk to each other they didn’t even speak in Russian, they were speaking in Tatar. But I was doing great stuff for them because it was very enjoyable and rewarding to actually see a factory being built.
And I have to be honest. Most of the financing we saw in Moscow, which did represent the vast bulk of business in Russia, because so much economic wealth was centered in Moscow and the environs, it was mainly for working capital finance. I tell you, how much of that money ultimately went to pay dividends to the oligarchs? Probably a lot more than I’d ever imagine, and god knows. And once you give them the money, unless you’re financing receipts of equipment, you’re never exactly sure what they’re doing with that. You’re always reading their financial statements, it’s working capital. Okay, that’s legitimate. You know you’re not financing anything that’s corrupt or a bloated invoice, you’re not doing that. But still, money is fungible, and that’s what was happening back in those early 2000s, a lot of it, to the tune of hundreds of billions of dollars.
But in Nizhnekamsk nothing like that. It was basically we want to build a factory; we want to buy this Italian petrochemical equipment, can you help us finance that. And I did it in conjunction with the Italian export credit agency and other financing arms. And we saw factories being built. And working with Tatars was great. Even the president of Tatarstan personally went to the factory and wanted to have lunch with me, thanking me for bringing all of this foreign capital to help Tatarstan grow. That was great for every possible reason.
Daniel Satinsky: Yeah. For this kind of business were you competing with Russian banks at all?
Steven Fisher: No, no, no. In those days Russian banks couldn’t do anything like that. They didn’t have the personnel, they didn’t have the access, they didn’t have the training, they didn’t have the capital, they didn’t have the systems. They had nothing. Now of course right before 2022 that situation had changed. Banks like VTB, Sberbank really got their act together, and they expanded. They adopted Western management technology, product skills, systems, computer, you know.
Daniel Satinsky: Did they poach personnel from you guys?
Steven Fisher: Of course. It was the most logical hunting ground. Citibank was always a prime hunting ground for talent. It was the best of the best. If you wanted a skilled Russian banker, try to steal him from Citibank. But of course, it wasn’t just Citibank, there were other banks, but Citibank certainly was prime hunting ground.
Daniel Satinsky: Right. And so your role was in client relations, client development as much as the nuts and bolts of the lending?
Steven Fisher: Of course, yeah, I was involved. And of course I was involved in compliance. I was the first line of defense to basically say hey, these are guys we could probably work with or no-no-no-no, from what we know this company is going to be off limits. And in Citibank we had three lines of defense. So, the first line of defense is the front office officers like myself, who identify business opportunities, propose how to structure them, what products to use, what programs to take advantage of. And then it would go to our legal staff that would look at all the legal implications. That’s the second line of defense. And the third line of defense is compliance, which basically has another fresh view and say well, based on Citi’s global policies and our policies in Russia, and in similar countries and situations, this is something that we probably could do or this is something that just doesn’t meet our compliance standards. So, we had three lines of defense to keep ourselves from doing something we shouldn’t do.
Daniel Satinsky: Did your compliance people speak Russian, or did they use Russian, I don’t know, investigators to help them?
Steven Fisher: What we used, some of them were Russian, but they were mainly foreigners because compliance, in those days, was a very technical, high-level skill that only foreigners had. So, Russians didn’t even know, in the early 2000s, what the hell that meant, compliance, so forget that. It was basically foreigners. But of course, the foreigners did have Russian staff to help them look at all the Russian documentation, because that was critical. Although most of the lending and capital extensions were all based on English or American law, never on Russian law.
Daniel Satinsky: Right. But the underlying information that you gathered…
Steven Fisher: Yeah, of course it was from Russian sources, and you had to—
Daniel Satinsky: Russian sources.
Steven Fisher: You had to analyze that very, very carefully and doublecheck it. We did hire a lot of professional due diligence firms that employed Russian staff, ex-FSB or police. God knows the people they employed. But I knew some of the people they employed, and they were that kind of profile. And they did independent due diligence reports on this shareholder, or how did this company form, or where did this money come from. You always want to know where did the money come from.
Daniel Satinsky: Right. Yeah, I mean, Russian businesspeople are incredibly creative in structuring their business and maintaining their privacy, so that’s sort of why I was curious as to how you gathered the underlying information. It requires someone like that, that has an investigatory background, to know like how do you search for that.
Steven Fisher: Yeah, we spent a lot of money on Kroll and these other international due diligence firms. Very important, especially if you’re starting off with a new client. Before you engage you’ve got to make sure you know who you’re dealing with and you’re comfortable with it.
Daniel Satinsky: So, in this period when your business is booming, if you will, was it your assumption that it would always be this way and that Russia was inextricably integrated into this world economic system that you were also a major part of as Citibank?
Steven Fisher: That perspective changed, and it started to change in the fall of 2003, when Putin engineered the takeover of Mikhail Khodorkovsky’s Yukos. And that was a big bucket of cold water on the face. Now, first Yukos was one of Citi’s best customers at that time. And I still remember reading the news, that section in Rosneft, we’re going to take over Yukos. And I remember leaving Yukos’ office around that time, going back to Citi’s office, going oh well, we just lost one of our best customers.
And when that happened, we realized things were starting to change, you know, that the state was taking over, asserting its control. It’s well documented the process, the beginning of the power vertical, you might say, the beginning of this process of increased state ownership and control of the jewels of Russian industry, you might say. So, things started to change. And that was not the only episode. There were other episodes where companies started to fall under state control. And it forced us to reevaluate can we work with this company anymore, because the shareholders are different, and guess what, it seems like this company is now fulfilling the state’s wishes rather than an independent business value-driven perspective, you might say.
So, that changed the way we looked at companies, and as time progressed it became more and more pronounced that this shift was happening. And you basically start fine-tuning your client base taking into account these very clear, these very inexorable changes to the Russian economic structure and system.
Daniel Satinsky: And this was sort of well understood within the bank?
Steven Fisher: Yeah, it was. I think we did not make any mistakes in this regard. I think we saw it coming and we were following it carefully and adjusting our marketing policies and our approach accordingly. But I tell you, Yukos being taken over was… And don’t forget what was happening to all of the clients, the people I knew, like Steve Ridlington, who was arrested and kept incommunicado in his office, and had to flee. Or Jamison Firestone, a lawyer who had to flee. These are people who fled for their lives. I still remember another very interesting story—again, helping you understand this transition. An incredible, unforgettable dinner I had with red letter, you know, who wrote that book? It was…
Daniel Satinsky: Oh yeah, I know who you mean. Bill Browder.
Steven Fisher: Bill Browder. So, Bill Browder and I and a few other people were having dinner sometime, I guess, in the summer of 2005. I remember this. In a lovely restaurant just a few blocks’ walk from Citibank’s office on Gasheka Street, 8 Gasheka Street. I still remember the specific address. We’re having dinner and we’re talking about Gazprom because Gazprom was one of the biggest clients and biggest investments.
And he goes, you know, I never invest in a Russian company unless I understand its EBISA. And I asked him EBISA, what does that mean? This is an accounting term. I knew what EBIT is. EBIT is earnings before interest and tax. I knew with EBITDA was—earnings before interest, tax, depreciation and amortization. And I go Bill, I never heard of EBISA, what is that? He goes, Steve, it’s very simple, earnings before interest and stealing, you know, EBISA. Earnings before interest, stealing and whatever else. And I was like okay, I got you. And I go, well, that is a very logical thing, but quite dangerous.
And within months he was expelled from Russia. He dug too deep. He insisted on maintaining a Western standard, anti-corruption standard, and that cost him his job, and if he stayed it would have cost him his life. So, that was another interesting, what I call milestone in this transformation from the early 2000s, like starting in 2002, basically, to fall of 2003 with Yukos, the Bill Browder episode in the summer of 2005, and it just got worse. So, by 2010 we really…Citi had been focusing more on investment grade rated Russian government assets rather than a lot of these individual corporations, so it was starting to narrow its credit focus based on the continuing transformation of the Russian economic structure.
Daniel Satinsky: I see. And how long did you stay?
Steven Fisher: I left in March 2010. I probably overstayed my welcome. I probably should have left in 2008, but sometimes when you’re working in a career you don’t move exactly when you want to. So, I got out in March 2010, and where did I go? I moved to Kyiv and I became the country manager of Citibank’s Ukraine operation, which was very, very logical because I was covering Ukraine when I was based in Russia. We weren’t doing that much in Ukraine at the time, but I was familiar with the country. I certainly knew all the tricks.
And how you looked at Ukraine was not much different than how you looked at Russia. The same demand for extreme due diligence and caution, although Ukraine was far riskier in those days. It was never an investment grade country, whereas Russia was for many years when I was there. And I was the country manager of Citibank in Ukraine from 2010 to 2018, when I retired from Citi in 2018. And then one year after that I served on the board of Ukreximbank in 2019. And by the end of…by the beginning of 2020 I basically was no longer physically or heavily engaged in Ukraine, and I started my sort of writing career, you might say.
Daniel Satinsky: Writing career, yeah. So, how long did Citi stay in Russia?
Steven Fisher: Well, Citi was still there in 2022 when the war happened, when the invasion happened in February. And I think it is still there because it still has some legal obligations to wind down with its commercial bank back-office operations in Ryazan and some other areas. Citi is still physically there. It certainly has not been doing any new business since 2022.
It’s scaled down dramatically, but I still think there are some vestigial remnants of the operation only because of legal obligations to close out transactions that, for whatever reasons, still were not closed out. And sometimes it would just be for a foreign company that says hey, you promised to do this for me, and it had a three-year time horizon to it, you’d better finish what you promised to do. And in that situation Citibank just said okay, well, we’re just going to have to close this out, and the sooner we close it out, then we can close up shop completely.
Daniel Satinsky: Well, look, I think we’ve covered the things I wanted to cover, unless there are things that you wanted to talk about that we didn’t touch.
Steven Fisher: Well, Daniel, the question is, is there going to be a Round 3? If Round 1 was 1916 to 1918, Round 2 was 1993 ultimately to 2022—and in each round Western companies lost an enormous amount of money. The amount of money lost by foreign companies exiting Russia starting in 2014, particularly after 2022, is in the hundreds of billions of dollars. So, two lessons learned. Will there be a Round 3? And will we understand history and make sure we don’t repeat it once again? Time will tell.
Daniel Satinsky: Time will tell, yeah,. Thank you. I think that’s a good note to end the interview here with.
Short-term zero-coupon government bonds
highway
Penal military unit
Porridge