Government Banking in Russia: Magnitude and New Features
State-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.
|Date of creation:||Aug 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Kleine Märkerstrasse 8, 06108 Halle (Saale)|
Phone: (0345) 7753-60
Fax: (0345) 7753-820
Web page: http://www.iwh-halle.de
More information through EDIRC
References listed on IDEAS
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.:
- Zuzana Fungácová & Laura Solanko & Laurent Weill, 2010.
"Market power in the russian banking industry,"
CEPII research center, issue 124, pages 127-146.
- Fungáčová, 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.
- Zuzana Fungacova & Laura Solanko & Laurent Weill, 2010. "Market Power in the Russian Banking Industry," Working Papers of LaRGE Research Center 2010-09, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
- Anzoategui, Diego & Soledad Martinez Peria, Maria & Melecky, Martin, 2010. "Banking sector competition in Russia," Policy Research Working Paper Series 5449, The World Bank.
- Damien Neven, 2002.
"Bank Performance in Transition Economies,"
IHEID Working Papers
07-2002, Economics Section, The Graduate Institute of International Studies.
- 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.
- 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.
- 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.
- Fungáčová, Zuzana & Poghosyan, Tigran, 2011.
"Determinants of bank interest margins in Russia: Does bank ownership matter?,"
Elsevier, vol. 35(4), pages 481-495.
- Fungáčová, 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.
- Vernikov, Andrei, 2009. "Russian banking : The state makes a comeback?," BOFIT Discussion Papers 24/2009, Bank of Finland, Institute for Economies in Transition.
When requesting a correction, please mention this item's handle: RePEc:iwh:dispap:13-11. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tobias Henning)
If references are entirely missing, you can add them using this form.