The Emerging Russian Banking System

Posted: 21 Dec 1998

See all articles by Andrew M. Warner

Andrew M. Warner

Harvard University - Center for International Development (CID)

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Abstract

Value-added in Russian banks grew 43 percent while GDP declined 32 percent in the early years of the transition. This paper offers explanations for the unusual success of the Russian banking sector and the determinants of individual bank performance. The evidence comes from balance sheet data for 563 Moscow banks and 160 regional banks on January 1, 1995 and January 1, 1996. Important factors include the Central Bank policy of channeling low-interest directed credits to state enterprises through banks, the ability of banks to obtain large-scale interest-free deposits, and the resulting high interest rate spreads in an environment of high inflation, and the extent to which banks were formerly part of the Soviet system.

JEL Classification: G21, P2, O16

Suggested Citation

Warner, Andrew M., The Emerging Russian Banking System. Economics of Transition. Available at SSRN: https://ssrn.com/abstract=122253

Andrew M. Warner (Contact Author)

Harvard University - Center for International Development (CID) ( email )

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