Government Banking in Russia: Magnitude and New Features
AbstractState-controlled banks are currently at the core of financial intermediation in Russia. This paper aims to assess the magnitude of government banking, and to reveal some of its special features and arrangements. We distinguish between directly and indirectly state-controlled banks and construct a set of bank-level statistical data covering the period between 2000 and 2011. By January 2011 the market share of state-controlled banks reached almost 54 percent of all bank assets, putting Russia in the same league with China and India and widening the gap from typical European emerging markets. We show that direct state ownership is gradually substituted by indirect ownership and control. It tends to be organized in corporate pyramids that dilute public property, take control away from government bodies, and underpin managerial opportunism. Statecontrolled banks blur the borderline between commercial banking and development banking. Dominance of public banks has a bearing on empirical studies whose results might suggest state-owned banks’ greater (or lesser) efficiency or competitiveness compared to other forms of ownership. We tend to interpret such results as influenced by the choice of indicator, period of observations, sample selection, etc., in the absence of an equal playing field for all groups of players. We suggest that the government’s planned retreat from the banking sector will involve non-core assets mainly, whereas control over core institutions will just become more subtle.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number 13.
Date of creation: Aug 2011
Date of revision:
Russia; banks; government; state-owned banks; public sector;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
- P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-29 (All new papers)
- NEP-CIS-2011-08-29 (Confederation of Independent States)
- NEP-TRA-2011-08-29 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steven Fries & Damien Neven & Paul Seabright, 2002.
"Bank performance in transition economies,"
76, European Bank for Reconstruction and Development, Office of the Chief Economist.
- Damien Neven, 2002. "Bank Performance in Transition Economies," IHEID Working Papers 07-2002, Economics Section, The Graduate Institute of International Studies.
- Steven Fries & Damien Neven & Paul Seabright, 2002. "Bank Performance in Transition Economies," William Davidson Institute Working Papers Series 505, William Davidson Institute at the University of Michigan.
- Fungacova, Zuzana & Solanko, Laura & Weill, Laurent, 2010.
"Market power in the Russian banking industry,"
BOFIT Discussion Papers
3/2010, Bank of Finland, Institute for Economies in Transition.
- Fungacova, Zuzana & Poghosyan, Tigran, 2009.
"Determinants of bank interest margins in Russia: Does bank ownership matter?,"
BOFIT Discussion Papers
22/2009, Bank of Finland, Institute for Economies in Transition.
- Fungáčová, Zuzana & Poghosyan, Tigran, 2011. "Determinants of bank interest margins in Russia: Does bank ownership matter?," Economic Systems, Elsevier, vol. 35(4), pages 481-495.
- Jarko Fidrmuc & Philipp J. Süss, 2011.
"The Outbreak of the Russian Banking Crisis,"
Czech Economic Review,
Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 5(1), pages 046-063, March.
- Vernikov, Andrei, 2009. "Russian banking: The state makes a comeback?," BOFIT Discussion Papers 24/2009, Bank of Finland, Institute for Economies in Transition.
- Svetlana Andrianova & Panicos Demetriades & Anja Shortland, 2009.
"Is Government Ownership of Banks Really Harmful to Growth?,"
CEDI Discussion Paper Series
09-05, Centre for Economic Development and Institutions(CEDI), Brunel University.
- Panicos Demetriades & Svetlana Andrianova & Anja Shortland, 2009. "Is Government Ownership of Banks Really Harmful to Growth?," Discussion Papers in Economics 09/11, Department of Economics, University of Leicester, revised Dec 2009.
- Svetlana Andrianova & Panicos Demetriades & Anja Shortland, 2010. "Is Government Ownership of Banks Really Harmful to Growth?," Discussion Papers of DIW Berlin 987, DIW Berlin, German Institute for Economic Research.
- Anzoategui, Diego & Soledad Martinez Peria, Maria & Melecky, Martin, 2010. "Banking sector competition in Russia," Policy Research Working Paper Series 5449, The World Bank.
- Tobias Körner & Isabel Schnabel, 2011. "Public ownership of banks and economic growth," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(3), pages 407-441, 07.
- Alexander Karminsky & Alexander Kostrov & Taras Murzenkov, 2012. "Comparison of default probability models: Russian experience," HSE Working papers WP BRP 06/FE/2012, National Research University Higher School of Economics.
- Karminsky, A. & Kostrov, A., 2013. "Modeling the Default Probabilities of Russian Banks: Extended Abillities," Journal of the New Economic Association, New Economic Association, vol. 17(1), pages 64-86.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hubert Gabrisch).
If references are entirely missing, you can add them using this form.