IDEAS home Printed from
   My bibliography  Save this paper

Russian Financial Transition: The Development of Institutions and Markets for Growth


  • David M. Kemme



A well-developed financial intermediation industry increases domestic savings, efficiently allocates investment resources to the most productive uses in the economy and increases the rate of economic growth. In the Soviet economy the banking system served as a means of collecting household savings and a means of distributing centrally determined capital grants to enterprises. Banks then audited enterprise financial activities to ensure compliance to the financial plan. After a decade the transition from the Soviet banking system to a market oriented banking system is incomplete and fraught with uncertainty. While the number of financial institutions has increased dramatically, the state sector still dominates financial sector activity, the legal and regulatory framework is incomplete, information necessary for risk management is of poor quality and policy makers and regulators have been slow to act to improve intermediation services. While significant progress has been made, the commonly recognized characteristics of a sound financial system are not yet met.

Suggested Citation

  • David M. Kemme, 2000. "Russian Financial Transition: The Development of Institutions and Markets for Growth," William Davidson Institute Working Papers Series 455, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2002-455

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Claudia M. Buch, 2000. "Capital Market Integration in Euroland: The Role of Banks," German Economic Review, Verein für Socialpolitik, vol. 1(4), pages 443-464, November.
    2. Townsend, Robert M, 1983. "Financial Structure and Economic Activity," American Economic Review, American Economic Association, vol. 73(5), pages 895-911, December.
    3. Tomás J. T. Baliño & Jakob Horder & David S. Hoelscher, 1997. "Evolution of Monetary Policy Instruments in Russia," IMF Working Papers 97/180, International Monetary Fund.
    4. Greenwood, Jeremy & Jovanovic, Boyan, 1990. "Financial Development, Growth, and the Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1076-1107, October.
    5. Andrew M. Warner, 1998. "The emerging Russian banking system," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 6(2), pages 333-347, November.
    6. Hermes, N., 1992. "Financial Development of Economic Growth: A Survey of the Literature," Papers 504, Groningen State, Institute of Economic Research-.
    7. Koen Schoors, 2001. "The credit squeeze during Russia's early transition: A bank-based view," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(1), pages 205-228, March.
    8. Mike Wright & Trevor Buck & Igor Filatotchev, 1998. "Bank and investment fund monitoring of privatized firms in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 6(2), pages 361-387, November.
    9. Bekaert, Geert & Harvey, Campbell R. & Lundblad, Christian, 2006. "Growth volatility and financial liberalization," Journal of International Money and Finance, Elsevier, vol. 25(3), pages 370-403, April.
    10. Thierry D. Buchs, 1999. "Financial crisis in the Russian Federation: Are the Russians learning to tango?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(3), pages 687-715, November.
    11. Tara Vishwanath & Daniel Kaufmann, 2003. "Towards Transparency in Finance and Governance," Finance 0308009, EconWPA.
    12. Beck, Thorsten & Levine, Ross & Loayza, Norman, 2000. "Finance and the sources of growth," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 261-300.
    13. Demirguc-Kunt, Asli & Levine, Ross & DEC, 1994. "The financial system and public enterprise reform : concepts and cases," Policy Research Working Paper Series 1319, The World Bank.
    14. Pagano, Marco, 1993. "Financial markets and growth: An overview," European Economic Review, Elsevier, vol. 37(2-3), pages 613-622, April.
    Full references (including those not matched with items on IDEAS)


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wdi:papers:2002-455. 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: (WDI). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.