Quo Vadis? Evidence on New Firm-Bank Matching and Firm Performance Following 'Sin' Bank Closures

67 Pages Posted: 29 Mar 2022

See all articles by Roman Goncharenko

Roman Goncharenko

KU Leuven

Mikhail Mamonov

TBS Business School

Steven Ongena

University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)

Svetlana Popova

The Central Bank of Russian Federation

Natalia Turdyeva

Bank of Russia

Date Written: February 2022

Abstract

In 2013, the Central Bank of Russia started revoking licenses from fraudulent banks. By 2020, two-thirds of all operating banks had been shuttered. We analyze this unique period in history with credit register data. Following "sin" bank closure, poorly-performing "bad" firms rush to other (not yet detected) "sin" banks, while "good" firms transfer to "saint" banks. The "bad-sin" coupling more frequently occurs when "sin" is commonly owned or when the local banking market is unconcentrated. Before bank closure, firms remain unaffected; after bank closure, "bad" firms worsen in resiliency and profitability while "good" firms strengthen.

Keywords: Bank clean-ups, Firm-bank matching, Regulatory forbearance

JEL Classification: G21, G28

Suggested Citation

Goncharenko, Roman and Mamonov, Mikhail and Ongena, Steven R. G. and Popova, Svetlana and Turdyeva, Natalia, Quo Vadis? Evidence on New Firm-Bank Matching and Firm Performance Following 'Sin' Bank Closures (February 2022). CEPR Discussion Paper No. DP17015, Available at SSRN: https://ssrn.com/abstract=4069801

Roman Goncharenko (Contact Author)

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Mikhail Mamonov

TBS Business School ( email )

Toulouse
France

Steven R. G. Ongena

University of Zurich - Department Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

NTNU Business School ( email )

Norway

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Svetlana Popova

The Central Bank of Russian Federation ( email )

Natalia Turdyeva

Bank of Russia ( email )

12 Neglinnaya Street
Moscow, 107016
Russia

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