The idea of creating a financial mega-regulator in Russia to oversee both banking and non-banking sectors is counterproductive and may only make the economy less competitive, experts said on Tuesday.

“If we set the task of reducing competition in the banking sector, then the creation of a mega-regulator is the right idea,” Vasily Solodkov, director of the Higher School of Economics Banking Institute, said at a roundtable discussion on the topic.

First Deputy Prime Minister Igor Shuvalov instructed the government’s economic ministries and departments in August to submit proposals on improving regulation of the domestic banking system and financial markets.

One of the government’s options is a merger of the Central Bank, responsible for monetary policy, and the Federal Financial Markets Services, which oversees professional financial market participants, into a single mega-regulator.

Solodkov said the idea to merge the Federal Financial Markets Service and the Central Bank would be hard to implement, adding the creation of a mega-structure would further slow economic growth in Russia because the financial market is a driver of investment activity in the country.

The expert recommended the Russian government to borrow the experience of the United States where there are about 9,000 banks and each financial market segment has its own regulator.

Federal Financial Markets Service expert Yury Danilov said the idea of a mega-regulator emerged to cover up the government’s failure to create an international financial center in Moscow. The expert also said the mega-regulator idea did not envisage the creation of an independent regulator.

Yakov Mirkin, head of the committee for financial markets and crediting at the Industry and Trade Chamber said “We must understand that over-monopolization of power is the breach of laws of the economy’s functioning,” adding the creation of a mega-regulator would cause part of the economy “to die out.”