nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2010‒01‒30
two papers chosen by
Anna Y. Borodina
Perm State University

  1. Determinants of bank interest margins in Russia: Does bank ownership matter? By Fungacova , Zuzana; Poghosyan, Tigran
  2. Russian banking: The state makes a comeback? By Vernikov, Andrei

  1. By: Fungacova , Zuzana (BOFIT); Poghosyan, Tigran (BOFIT)
    Abstract: This paper analyzes interest margin determinants in the Russian banking sector with a particular emphasis on the bank ownership structure. Using a unique bank-level data covering Russia’s entire banking sector for the 19992007 period, we find that the impact of a number of commonly used determinants such as market structure, credit risk, liquidity risk and size of operations differs across state-controlled, domestic-private and foreign-owned banks. At the same time, the influence of operational costs and bank risk aversion is homogeneous across ownership groups. The results overall suggest the form of bank ownership needs to be considered when analyzing interest margin determinants.
    Keywords: bank interest margins; financial intermediation; Russia
    JEL: G21 P34
    Date: 2010–01–21
  2. By: Vernikov, Andrei (BOFIT)
    Abstract: The purpose of this paper is to carefully assess the size of public sector within the Russian banking industry. We identify and classify at least 78 state-influenced banks. For the state-owned banks, we distinguish between those that are majority-owned by federal executive authorities or Central Bank of Russia, by sub-federal (regional and municipal) authorities, by state-owned enterprises and banks, and by ‘state corporations’. We estimate their combined market share to have reached 56% of total assets by July 1, 2009. Banks indirectly owned by public capital are the fastest-growing group. Concentration is increasing within the public sector of the industry, with the top five state-controlled banking groups in possession of over 49% of assets. We observe a crowding out and erosion of domestic private capital, whose market share is shrinking from year to year. Several of the largest state-owned banks now constitute a de facto intermediate tier at the core of the banking system. We argue that the direction of ownership change in Russian banking is different from that in CEE countries.
    Keywords: Russian banks; transition; banking; state; government; public sector; state-owned banks; state-controlled banks; state-influenced banks
    JEL: G21 G28 P31 P43
    Date: 2010–01–21

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