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Bank Supervision Russian style: Rules versus Enforcement and Tacit Objectives

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  • Sophie Claeys,
  • Gleb Lanine
  • Koen Schoors

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Abstract

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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  • Sophie Claeys, & Gleb Lanine & Koen Schoors, 2005. "Bank Supervision Russian style: Rules versus Enforcement and Tacit Objectives," William Davidson Institute Working Papers Series wp778, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2005-778
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    Cited by:

    1. Claeys, Sophie, 2005. "Optimal regulatory design for the Central Bank of Russia," BOFIT Discussion Papers 7/2005, Bank of Finland, Institute for Economies in Transition.

    More about this item

    Keywords

    Bank supervision; bank crisis; Russia.;

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • N2 - Economic History - - Financial Markets and Institutions
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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