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Evolution of the Banking System in the Russian Context: An Institutional View

Journal of Economic Issues, 2013, Vol.47, No 2, pp.475-484

10 Pages Posted: 16 Jul 2014  

Svetlana Kirdina

Russian Academy of Sciences (RAS) - Institute of Economics

Andrei Vernikov

Russian Academy of Sciences (RAS) - Institute of Economics

Date Written: January 2013

Abstract

We undertook an institutional analysis of commercial banks in Russia. After the failed experiment with private financial intermediation in the 1990s, Russia migrated towards a banking system consisting of three — rather than two — tiers and featuring core institutions controlled by the state directly or indirectly. This evolution is consistent with this country’s historical pattern of financial intermediation. It is also in line with recent trends in the real sector of the economy, where public ownership has rebound over the past decade. The core state-controlled banks have evolved into hybrid institutions, performing two various sets of functions: those of a regular commercial bank and of a policy bank. We found a similar evolution in a China, but not in the transition economies of central Europe. Institutional matrices theory suggests that, in non-market economies, centralized finance and credit allocation is the dominant institutional form, while private banking activity is complementary.

Keywords: banks, institutional matrix, institutions, Russia, state

JEL Classification: B40, G21, P50

Suggested Citation

Kirdina, Svetlana and Vernikov, Andrei, Evolution of the Banking System in the Russian Context: An Institutional View (January 2013). Journal of Economic Issues, 2013, Vol.47, No 2, pp.475-484. Available at SSRN: https://ssrn.com/abstract=2465987

Svetlana Kirdina

Russian Academy of Sciences (RAS) - Institute of Economics ( email )

32, Nakhimovsky Prospekt
Moscow, 117218
Russia
+7(499)7241541 (Phone)
+7(499)7241409 (Fax)

HOME PAGE: http://www.inecon.org/

Andrei V. Vernikov (Contact Author)

Russian Academy of Sciences (RAS) - Institute of Economics ( email )

32, Nakhimovsky Prospekt
Moscow, 117218
Russia

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