nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2008‒12‒01
three papers chosen by
Anna Y. Borodina
Perm State University

  1. How corruption affects bank lending in Russia By Weill, Laurent
  2. Trade linkages and macroeconomic effects of the price of oil By Korhonen, Iikka; Ledyaeva, Svetlana
  3. Liquidity matters: Evidence from the Russian interbank market By Kares, Alexei; Schoors , Koen; Lanine, Gleb

  1. By: Weill, Laurent (BOFIT)
    Abstract: The aim of this study is to investigate the impact of corruption on bank lending in Russia. This issue is of major interest in order to understand the causes of financial underdevelopment and the effects of corruption in Russia. We use regional measures of corruption and bank-level data to perform this investigation. Our main estimations show that corruption hampers bank lending in Russia. We investigate whether this negative role of corruption is influenced by the degree of bank risk aversion, but find no effect. The detrimental effect of corruption is only observed for loans to households and firms, in opposition to loans to government. Additional controls confirm the detrimental impact of corruption on bank lending. Therefore, our results provide motivations to fight corruption to favor bank lending in Russia.
    Keywords: corruption; bank; Russia; financial development; economic transition
    JEL: G20 K40 P20
    Date: 2008–11–21
  2. By: Korhonen, Iikka (BOFIT); Ledyaeva, Svetlana (BOFIT)
    Abstract: In this paper we assess the impact of oil price shocks on oil-producer and oil-consumer economies. VAR models for different countries are linked together via a trade matrix, as in Abeysinghe (2001). As expected, we find that oil producers (Russia and Canada here) benefit from oil price shocks. For example, a large oil shock, leading to a price increase of 50%, boosts Russian GDP by some 12%. However, oil producers are hurt by indirect effects of oil shocks, as economic activity in their export countries suffers. For oil consumers, the effects are more diverse. In some countries, output drops in response to an oil price shock, while other countries seem to be relatively immune to oil price changes. Finally, indirect effects are also detected for oil-consumer countries. Those countries trading more with oil producers receive indirect benefits via higher demand from the oil producing countries. In general the largest negative total effects from positive oil price shocks are found in China, USA and Japan while European countries seem to fare quite well during recent positive oil-price shocks.
    Keywords: oil; macroeconomic fluctuations; trade linkages; Russia
    JEL: C32 E32 F43 Q43
    Date: 2008–11–21
  3. By: Kares, Alexei (BOFIT); Schoors , Koen (BOFIT); Lanine, Gleb (BOFIT)
    Abstract: We suggest an additional transmission channel of contagion on the interbank market - the liquidity channel. Examining the Russian banking sector, we and that the liquidity channel contributes significantly to understanding and predicting interbank market crises. Interbank market stability Granger causes the interbank market structure, while the opposite causality is rejected. This bolsters the view that the interbank market structure is endogenous. The results corroborate the thesis that prudential regulation at the individual bank level is insufficient to prevent systemic crises. We demonstrate that liquidity injections of a classical lender of last resort can effectively mitigate coordination failures on the interbank market both in theory and practice. Apparently, liquidity does matter.
    Keywords: interbank market stability; contagion; liquidity channel; lender of last resort; Russia
    JEL: C80 G21
    Date: 2008–11–21

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