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Bank supervision Russian style: Evidence of conflicts between micro- and macroprudential concerns

Listed author(s):
  • Claeys, Sophie

    ()

    (Research Department, Central Bank of Sweden)

  • Schoors, Koen

    ()

    (CERISE)

Supervisors sometimes have to manage both the micro- and macro- prudential dimensions of bank stability. These may either conflict or complement each other. We analyze prudential supervision by the Central Bank of Russia (CBR). We find evidence of micro-prudential concerns, measured as the rule-based enforcement of bank standards. Macro-prudential concerns are also documented: Banks in concentrated bank markets, large banks, money center banks and large deposit banks are less likely to face license withdrawal. Further, the CBR is reluctant to withdraw licenses when there are “too many banks to fail”. Finally, macro-prudential concerns induce regulatory forbearance, revealing conflicts with micro-prudential objectives.

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Paper provided by Sveriges Riksbank (Central Bank of Sweden) in its series Working Paper Series with number 205.

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Length: 42 pages
Date of creation: 01 Mar 2007
Handle: RePEc:hhs:rbnkwp:0205
Contact details of provider: Postal:
Sveriges Riksbank, SE-103 37 Stockholm, Sweden

Phone: 08 - 787 00 00
Fax: 08-21 05 31
Web page: http://www.riksbank.com/
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