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The politics of bank failures in Russia

Author

Listed:
  • Zuzana Fungáčová
  • Alexei Karas
  • Laura Solanko
  • Laurent Weill

Abstract

Russia has witnessed a high number of bank failures over the last two decades. Using monthly data for 2002–2020, spanning four election cycles (2004, 2008, 2012, 2018), we test the hypothesis that bank failures are less likely before presidential elections. We find that, in general, bank failures are less likely to occur in the 12 months leading up to an election. However, we do not observe that bank failures during electoral cycles are more pronounced for banks associated with greater political costs (financial troubles) than for other reasons (illegal activities). Overall, our results provide mixed evidence that political cycles matter for the occurrence of bank failures in Russia.

Suggested Citation

  • Zuzana Fungáčová & Alexei Karas & Laura Solanko & Laurent Weill, 2023. "The politics of bank failures in Russia," Post-Soviet Affairs, Taylor & Francis Journals, vol. 39(6), pages 440-461, November.
    • Handle: RePEc:taf:rpsaxx:v:39:y:2023:i:6:p:440-461
    DOI: 10.1080/1060586X.2023.2215688
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    References listed on IDEAS

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    1. Fungáčová, Zuzana & Schoors, Koen & Solanko, Laura & Weill, Laurent, 2020. "Political cycles and bank lending in Russia," BOFIT Discussion Papers 8/2020, Bank of Finland Institute for Emerging Economies (BOFIT).
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    10. Koen Schoors & Laurent Weill, 2020. "Politics and banking in Russia: the rise of Putin," Post-Soviet Affairs, Taylor & Francis Journals, vol. 36(5-6), pages 451-474, November.
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    15. William Tompson, 1997. "Old habits die hard: Fiscal imperatives, state regulation and the role of Russia's banks," Europe-Asia Studies, Taylor & Francis Journals, vol. 49(7), pages 1159-1185.
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    1. Fungáčová, Zuzana & Schoors, Koen & Solanko, Laura & Weill, Laurent, 2023. "Staying on top: Political cycles in private bank lending," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 899-917.

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    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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