nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2011‒08‒29
three papers chosen by
Koen Schoors
Ghent University

  1. The role of state and creation of a market economy in Russia By Mau, Vladimir
  2. Identifying structural shocks behind loan supply fluctuations in Russia By Deryugina, Elena B.; Ponomarenko, Alexey A.
  3. Government Banking in Russia: Magnitude and New Features By Andrei Vernikov

  1. By: Mau, Vladimir (BOFIT)
    Abstract: This paper examines the role of institutions in economic growth and the role of the institutions created by the Russian state in particular. The author stresses the finding that growth-supporting institutions vary according to the level of economic development in a country. In a post-industrial society, that Russia aspires to be, further economic development requires promotion of institutions securing e.g. property rights and economic freedom. Finally, based on these observations, the three development scenarios frequently discussed in the current Russian economic policy debates are analysed.
    Keywords: modernisation; role of institutions; economic development; Russia
    JEL: O10 O20 O30
    Date: 2011–08–22
  2. By: Deryugina, Elena B. (BOFIT); Ponomarenko, Alexey A. (BOFIT)
    Abstract: We examine the drivers behind loan supply fluctuations in Russia using Bayesian vector autoregressive model with sign restrictions on impulse response functions. We identify two types of structural innovations: loan supply shock and monetary stance shock. We find that contractionary shocks of both types contributed significantly and in the roughly equal measure to the decrease of bank lending after the Lehman Brothers collapse.
    Keywords: loan supply; Bayesian VAR; sign restrictions; financial crisis; Russia
    JEL: C11 C32 E51
    Date: 2011–08–22
  3. By: Andrei Vernikov
    Abstract: State-controlled banks are currently at the core of financial intermediation in Russia. This paper aims to assess the magnitude of government banking, and to reveal some of its special features and arrangements. We distinguish between directly and indirectly state-controlled banks and construct a set of bank-level statistical data covering the period between 2000 and 2011. By January 2011 the market share of state-controlled banks reached almost 54 percent of all bank assets, putting Russia in the same league with China and India and widening the gap from typical European emerging markets. We show that direct state ownership is gradually substituted by indirect ownership and control. It tends to be organized in corporate pyramids that dilute public property, take control away from government bodies, and underpin managerial opportunism. Statecontrolled banks blur the borderline between commercial banking and development banking. Dominance of public banks has a bearing on empirical studies whose results might suggest state-owned banks’ greater (or lesser) efficiency or competitiveness compared to other forms of ownership. We tend to interpret such results as influenced by the choice of indicator, period of observations, sample selection, etc., in the absence of an equal playing field for all groups of players. We suggest that the government’s planned retreat from the banking sector will involve non-core assets mainly, whereas control over core institutions will just become more subtle.
    Keywords: Russia, banks, government, state-owned banks, public sector
    JEL: G21 G28 P31 P52
    Date: 2011–08

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