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Banking and Financial Stability in Russia and the Euro Area amid International Financial Market Turbulences

Author

Listed:
  • Stephan Barisitz

    (Oesterreichische Nationalbank, Foreign Research Division)

  • Gernot Ebner

    (Oesterreichische Nationalbank, Financial Markets Analysis and Surveillance Division)

  • Mathias Lahnsteiner

    (Oesterreichische Nationalbank, Foreign Research Division)

  • Johannes Pann

    (Oesterreichische Nationalbank)

Abstract

This study was drafted during the preparation of the Fifth Joint High-Level Eurosystem – Bank of Russia Seminar hosted by the OeNB in Vienna on March 11–12, 2009. The first part of the study illustrates developments in the euro area, where the financial sector suffered to some extent from spillover effects from the first waves of the subprime crisis and later more substantially from the demise of Lehman Brothers. While rescue actions taken by national authorities and the ECB mitigated crisis effects, current challenges arise from a cyclical deterioration of credit quality and further adverse developments in global financial markets. The study highlights the considerable exposure of euro area banks to emerging Europe in general and their more modest exposure to Russia in particular. It then discusses developments in Russia: Embarking from a quite favorable macroeconomic environment, Russia was caught up in the global financial turbulences only in recent months, but the impact was heavy and exacerbated by structural weaknesses of the Russian economy. The Russian authorities’ crisis response measures have been substantial and contributed to staving off a systemic banking crisis, but the sector remains fragile. The paper concludes with comments on lessons learnt: Confidence – which is the foundation of the financial system – needs to be restored. Structural and institutional problems have to be addressed adequately. Interbank markets should be made more resilient to shocks.

Suggested Citation

  • Stephan Barisitz & Gernot Ebner & Mathias Lahnsteiner & Johannes Pann, 2009. "Banking and Financial Stability in Russia and the Euro Area amid International Financial Market Turbulences," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 17, pages 123-142.
  • Handle: RePEc:onb:oenbfs:y:2009:i:17:b:5
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    File URL: https://www.oenb.at/dam/jcr:1d019e36-a1c7-4988-963b-458b07c93b80/fsr_17_special_topics05_tcm16-140535.pdf
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    References listed on IDEAS

    as
    1. Zeljko, Bogetic & Karlis, Smits & Sergey, Ulatov & Olga, Emelyanova & Marco, Hernandez, 2008. "Russian economic report No. 17 (November 2008), The World Bank," MPRA Paper 12434, University Library of Munich, Germany.
    2. repec:onb:oenbwp:y:2008:i:16:b:1 is not listed on IDEAS
    3. Zoltan Walko, 2008. "The Refinancing Structure of Banks in Selected CESEE Countries," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 16, pages 76-95.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Stephan Barisitz & Mathias Lahnsteiner, 2010. "Russian Banks on the Route of Fragile Recovery," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 20, pages 77-85.

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    More about this item

    Keywords

    Banking system; contagion; crisis response measures; euro area; financial crisis; financial rescue package; financial stability; Russia;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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