Bank Supervision Russian Style: Rules Versus Enforcement and Tacit Objectives

63 Pages Posted: 6 Aug 2005

See all articles by Sophie Claeys

Sophie Claeys

Sveriges Riksbank - Research Division; Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE); Ghent University - Department of Financial Economics

Gleb Lanine

Ghent University - Department of Financial Economics; Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE)

Koen J. L. Schoors

Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE); Ghent University - Department of General Economics

Date Written: September 5, 2005

Abstract

We focus on the conflict between two central bank objectives - individual bank stability and systemic stability - and the regulatory forbearance that follows from it. We study the licensing policy of the Central Bank of Russia (CBR) during 1999-2002. Banks in highly concentrated bank markets, large banks, and banks that are active on the interbank market enjoy protection from license withdrawal, which suggests a tacit concern for systemic stability. The CBR is also found reluctant to withdraw licenses from large deposit banks as this conflicts with the tacit CBR objective to secure depositor confidence and systemic stability.

Keywords: Bank supervision, systemic stability, Russia

JEL Classification: G2, N2, E5

Suggested Citation

Claeys, Sophie and Lanine, Gleb and Schoors, Koen J. L., Bank Supervision Russian Style: Rules Versus Enforcement and Tacit Objectives (September 5, 2005). BOFIT Discussion Paper No. 10/2005, William Davidson Institute Working Paper No. 778, Available at SSRN: https://ssrn.com/abstract=770386 or http://dx.doi.org/10.2139/ssrn.770386

Sophie Claeys

Sveriges Riksbank - Research Division ( email )

S-103 37 Stockholm
Sweden

Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE) ( email )

Gent, 9000
Belgium

Ghent University - Department of Financial Economics ( email )

Ghent, 9000
Belgium
+32 9 264 34 91 (Phone)
+32 9 264 89 95 (Fax)

Gleb Lanine

Ghent University - Department of Financial Economics ( email )

Ghent, 9000
Belgium

Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE)

Gent, 9000
Belgium

Koen J. L. Schoors (Contact Author)

Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE) ( email )

Tweekerkenstraat 2
Ghent, 9000
Belgium
+32 9 264 34 78 (Phone)
+32 9 265 35 99 (Fax)

Ghent University - Department of General Economics ( email )

Tweekerkenstraat 2
Ghent, 9000
Belgium
+32 9 264 34 78 (Phone)
+32 9 264 35 99 (Fax)

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