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Bank Supervision Russian Style: Rules vs Enforcement and Tacit Objectives

  • S. CLAEYS

    ()

  • G. LANINE

    ()

  • K. SCHOORs

    ()

We focus on the conflict between two central bank objectives, namely individual bank stability and systemic stability. We study the licensing policy of the Central Bank of Russia (CBR) in 1999-2002. Banks in poorly banked regions, banks that are too big to be disciplined adequately and banks that are active on the interbank market enjoy protection from license withdrawal, showing a tacit concern for systemic stability. The CBR is also reluctant to withdraw licenses from banks that violate the individuals’ deposits to capital ratio, because this conflicts with the tacit CBR objective to secure depositor trust and systemic stability.

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Paper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 05/307.

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Length: 64 pages
Date of creation: May 2005
Date of revision:
Handle: RePEc:rug:rugwps:05/307
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Web page: http://www.ugent.be/eb

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