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Russian banking : The state makes a comeback?

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  • Vernikov, Andrei

Abstract

The purpose of this paper is to carefully assess the size of public sector within the Russian banking industry. We identify and classify at least 78 state-influenced banks. For the state-owned banks, we distinguish between those that are majority-owned by federal executive authorities or Central Bank of Russia, by sub-federal (regional and municipal) authorities, by state-owned enterprises and banks, and by state corporations.. We estimate their combined market share to have reached 56% of total assets by July 1, 2009. Banks indirectly owned by public capital are the fastest-growing group. Concentration is increasing within the public sector of the industry, with the top five state-controlled banking groups in possession of over 49% of assets. We observe a crowding out and ero-sion of domestic private capital, whose market share is shrinking from year to year. Several of the largest state-owned banks now constitute a de facto intermediate tier at the core of the banking sys-tem. We argue that the direction of ownership change in Russian banking is different from that in CEE countries. Key words: Russian banks; transition; banking; state; government; public sector; state-owned banks; state-controlled banks; state-influenced banks JEL codes: G21, G28, P31, P43.

Suggested Citation

  • Vernikov, Andrei, 2009. "Russian banking : The state makes a comeback?," BOFIT Discussion Papers 24/2009, Bank of Finland, Institute for Economies in Transition.
  • Handle: RePEc:bof:bofitp:2009_024
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    References listed on IDEAS

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    1. A. Karas & K. Schoors & L. Weill, 2008. "Are private banks more efficient than public banks? Evidence from Russia," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 08/519, Ghent University, Faculty of Economics and Business Administration.
    2. Randall Morck & Lloyd Steier, 2005. "The Global History of Corporate Governance: An Introduction," NBER Chapters,in: A History of Corporate Governance around the World: Family Business Groups to Professional Managers, pages 1-64 National Bureau of Economic Research, Inc.
    3. Vernikov, Andrei V., 2007. "Russia' banking sector transition : where to?," BOFIT Discussion Papers 5/2007, Bank of Finland, Institute for Economies in Transition.
    4. repec:hrv:faseco:30747188 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Fungáčová, Zuzana & Herrala, Risto & Weill, Laurent, 2013. "The influence of bank ownership on credit supply: Evidence from the recent financial crisis," Emerging Markets Review, Elsevier, vol. 15(C), pages 136-147.
    2. Vernikov, Andrei, 2011. "Government Banking in Russia: Magnitude and New Features," IWH Discussion Papers 13/2011, Halle Institute for Economic Research (IWH).
    3. Zuzana Fungáčová & Laurent Weill & Mingming Zhou, 2017. "Bank Capital, Liquidity Creation and Deposit Insurance," Journal of Financial Services Research, Springer;Western Finance Association, vol. 51(1), pages 97-123, February.
    4. repec:nea:journl:y:2017i:33:p:44-74 is not listed on IDEAS
    5. Fungáčová, Zuzana & Korhonen, Iikka, 2011. "Like China, the Chinese banking sector is in a class of its own," BOFIT Discussion Papers 32/2011, Bank of Finland, Institute for Economies in Transition.
    6. Alexei Karas & William Pyle & Koen Schoors, 2013. "Deposit Insurance, Banking Crises, and Market Discipline: Evidence from a Natural Experiment on Deposit Flows and Rates," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(1), pages 179-200, February.
    7. Vernikov, Andrei, 2017. "The impact of state-controlled banks on the Russian banking sector," MPRA Paper 77155, University Library of Munich, Germany.
    8. Zuzana Fungácová & Laura Solanko & Laurent Weill, 2010. "Market power in the russian banking industry," International Economics, CEPII research center, issue 124, pages 127-146.
    9. Zuzana Fungacova & Petr Jakubik, 2013. "Bank Stress Tests as an Information Device for Emerging Markets: The Case of Russia," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(1), pages 87-105, March.
    10. A.O. Karas & Andrei Vernikov, 2016. "Russian Bank Database : Birth and Death, Location, Mergers, Deposit Insurance Participation, State and Foreign Ownership," Working Papers 16-04, Utrecht School of Economics.
    11. Vernikov, Andrei, 2017. "Структурные Или Институциональные Сдвиги? Попытка Измерения На Примере Банковского Сектора
      [Structural change, institutional change and their measurement: The case of banking]
      ," MPRA Paper 79978, University Library of Munich, Germany.
    12. Vernikov, Andrei, 2012. "«Национальные Чемпионы» В Структуре Российского Рынка Банковских Услуг
      [National champions and the competitive structure of the Russian banking market]
      ," MPRA Paper 40236, University Library of Munich, Germany.
    13. repec:eee:chieco:v:46:y:2017:i:s:p:s35-s49 is not listed on IDEAS
    14. Andrei Vernikov, 2010. "Russian banking: a comeback of the state," UCL SSEES Economics and Business working paper series 104, UCL School of Slavonic and East European Studies (SSEES).
    15. Vernikov, Andrei, 2010. "Direct and indirect state ownership on banks in Russia," MPRA Paper 21373, University Library of Munich, Germany.
    16. Fungachova, Z. & Solanko, L., 2010. "Has Banks’ Financial Intermediation Improved in Russia?," Journal of the New Economic Association, New Economic Association, issue 8, pages 101-116.
    17. Vernikov, Andrei, 2014. "Сравнение Институциональной Структуры Банковских Систем России И Китая
      [Comparing the institutional structure of Russian and Chinese banking systems]
      ," MPRA Paper 64339, University Library of Munich, Germany.

    More about this item

    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
    • P43 - Economic Systems - - Other Economic Systems - - - Finance; Public Finance

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