The "socialist" policies of the Central Bank are provoking the current instability and panic in the banking sector and could topple the whole financial system if left unchecked, President Vladimir Putin's top economic adviser warned on Thursday.

"All the actions by the Central Bank in recent months could only lead to a banking crisis," Andrei Illarionov told reporters. "It seems that the word 'crisis' is banned, but we have to call things what they are, and this is a banking crisis."

The outspoken economist, known for often contrarian views, said the banking system was fine until the Central Bank started meddling where it didn't belong and flexing its muscles, such as when it revoked the license of second-tier Sodbiznesbank in May, triggering a liquidity squeeze that is still being felt.

Illarionov reeled off a laundry list of actions by the Central Bank that he said amounted to "silent socialism," including capital controls, mandatory deposit insurance, reserve requirements and barriers to foreign lending institutions.

State-owned Vneshtorgbank's planned acquisition of Guta, which this week became the latest -- and biggest -- bank to suspend operations since Sodbiznes went down, is a classic example of the "creeping socialization" of the economy, Illarionov said.

"These types of crises will end when the socialism in our society ends."

Illarionov's comments came as clients of Alfa Bank, Russia's largest private bank, flocked en masse to withdraw their savings for the second day in a row.

The Central Bank, which had been roundly criticized for not moving more quickly to quell growing concerns of instability in the banking sector, moved decisively Wednesday to inject liquidity into the system to counter the biggest bank run since the dark days of 1998. By halving mandatory reserve requirements for banks to 3.5 percent, it freed up some 130 billion rubles ($4.5 billion).

On Thursday, Prime Minister Mikhail Fradkov lauded the Central Bank for its handling of the crisis, although he said its actions should be more "transparent and consistent."

"The Central Bank is solving the issues that have arisen, but we must take into consideration the sensitivity of the sector and its role in the economy," he said.

But in a move directly at odds with those advocated by Illarionov, Fradkov said the government would create conditions to "stimulate" the "voluntary mergers" of credit organizations.

Analysts took Fradkov's remarks with a grain of salt, saying what the Central Bank does is what really matters.

"I don't put a huge amount of importance on Fradkov's statements," said Andrew Keeley of Renaissance Capital. "What is important is what the Central Bank did Wednesday."

Also on Wednesday, Central Bank Chairman Sergei Ignatyev, in a speech to parliament, gave Alfa Bank a clean bill of health, reassuring lawmakers, depositors and the business community as a whole that it was too big to fail. Those words were echoed by Alfa owner Mikhail Fridman, who said he would personally guarantee the more than $1 billion Alfa held in personal savings accounts.

Such reassurances, however, failed to slow the run on Alfa.

Unable to deal with the huge inflow of clients demanding their money back, Alfa tried to stem the tide by exercising its right to charge a 10 percent penalty for early withdrawals from time accounts.

It didn't help. Instead, customers simply used Alfa's commission-free ATM machines. By early afternoon, they had been bled dry.

"We opened at eight, but by 10 all the money had been taken out of our two machines," said Konstantin, a floor manager at an Alfa Express branch in central Moscow. " We've only got euros left now."

Konstantin politely asked the increasingly uneasy crowd outside the bank to "please come back at 8 in the morning -- I am almost sure we'll have cash then."

Alfa issued a statement saying the commission was a "temporary measure connected to the panic on the market" -- but that only appeared to make matters worse.

Yulia Danilova, who was 225th on the waiting list to make a withdrawal at an Alfa branch on Ulitsa Polyanka, said she intended to pull all of her $2,000 out, even if it meant paying a $200 commission.

"It is better to get $1,800 than nothing at all," she said. "What are the chances of winning a court case against a bank in this country?"

Danilova was just one of several hundred people trying to retrieve their savings from that one Alfa branch.

One woman scoffed at a message management had tacked to the door saying all deposits would be honored in full.

"Isn't it what they said back in 1998?" said the woman, who declined to give her name. "Even [Former President Boris] Yeltsin promised that there wouldn't be a default."

When the panic will end is anyone's guess, but experts are united in the opinion that Alfa's chances of failing are slim to none. Nonetheless, the "crisis of mistrust" that bankers say is responsible for the current malaise -- will likely claim dozens, if not hundreds of smaller banks.

Adding to the unease was a statement by international ratings agency Moody's that it would review 18 Russian banks, including Alfa, MDM, Bank of Moscow and Russian Standard, for possible downgrades.

"The review will focus on the capacity and willingness of Russia's central authorities and of other banking-market participants to provide prompt liquidity support to the solvent banks in need of such aid," Moody's said in a statement.

Moody's rivals, Fitch and Standard&Poors, however, both said they saw no reasons yet to review their ratings of Russian banks.

S&P said it has already factored the "institutional weakness of the Russian banking sector" into its ratings of 21 banks, while Fitch noted that Alfa's liquidity is "consistent with its ratings."