IDEAS home Printed from https://ideas.repec.org/p/zbw/bofitp/bdp2007_005.html
   My bibliography  Save this paper

Russia' banking sector transition: Where to?

Author

Listed:
  • Vernikov, Andrei V.

Abstract

This paper applies an analytical paradigm of institutional economics to the transition of the Russian banking sector, focusing on the interplay between ownership change and institutional change. We find that the state's withdrawal from commercial banking has been inconsistent and limited in scope.To this day, core banks have yet to be privatized and the state has made a comeback as owner of the dominant market participants.We also look at the new institutions imported into Russia to regulate banking and finance, including rule of law, competition, deposit insurance, bankruptcy, and corporate governance.The unfortunate combination of this new institutional overlay and traditional local norms of behavior have brought Russia to an impasse - the banking sector's ownership structure hinders further advancement of market institutions. Indeed, we may now be witnessing is a retreat from the original market-based goals of transition.

Suggested Citation

  • Vernikov, Andrei V., 2007. "Russia' banking sector transition: Where to?," BOFIT Discussion Papers 5/2007, Bank of Finland Institute for Emerging Economies (BOFIT).
    • Handle: RePEc:zbw:bofitp:bdp2007_005
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/212596/1/bofit-dp2007-005.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David A Grigorian & Vlad Manole, 2006. "Determinants of Commercial Bank Performance in Transition: An Application of Data Envelopment Analysis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(3), pages 497-522, September.
    2. Laurent Weill, 2003. "Banking efficiency in transition economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(3), pages 569-592, September.
    3. Drakos, Kostas, 2003. "Assessing the success of reform in transition banking 10 years later: an interest margins analysis," Journal of Policy Modeling, Elsevier, vol. 25(3), pages 309-317, April.
    4. Tuuli Koivu, 2002. "Do efficient banking sectors accelerate economic growth in transition countries?," Macroeconomics 0212013, University Library of Munich, Germany.
    5. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-950, October.
    6. Bonin, John P. & Hasan, Iftekhar & Wachtel, Paul, 2005. "Bank performance, efficiency and ownership in transition countries," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 31-53, January.
    7. repec:zbw:bofitp:2002_014 is not listed on IDEAS
    8. Eggertsson,Thrainn, 1990. "Economic Behavior and Institutions," Cambridge Books, Cambridge University Press, number 9780521348911, January.
    9. Hasan, Iftekhar & Marton, Katherin, 2003. "Development and efficiency of the banking sector in a transitional economy: Hungarian experience," Journal of Banking & Finance, Elsevier, vol. 27(12), pages 2249-2271, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Weill, Laurent, 2011. "How corruption affects bank lending in Russia," Economic Systems, Elsevier, vol. 35(2), pages 230-243, June.
    2. repec:zbw:bofitp:2010_009 is not listed on IDEAS
    3. Alexei Karas & William Pyle & Koen Schoors, 2009. "The Effect of Deposit Insurance on Market Discipline:Evidence from a Natural Experiment on Deposit Flows," Middlebury College Working Paper Series 0905, Middlebury College, Department of Economics.
    4. Berger, Allen N. & Hasan, Iftekhar & Korhonen, Iikka & Zhou, Mingming, 2010. "Does diversification increase or decrease bank risk and performance? : Evidence on diversification and the risk-return tradeoff in banking," BOFIT Discussion Papers 9/2010, Bank of Finland, Institute for Economies in Transition.
    5. Sprenger, C., 2010. "State Ownership in the Russian Economy. Part 1. Its Magnitude And Sectoral Distribution," Journal of the New Economic Association, New Economic Association, issue 6, pages 120-140.
    6. Fungáčová Z. & Solanko L., 2009. "Risk-taking by Russian banks: do location, ownership and size matter?," Higher School of Economics Economic Journal Экономический журнал Высшей школы экономики, CyberLeninka;Федеральное государственное автономное образовательное учреждение высшего образования «Национальный исследовательский университет «Высшая школа экономики», vol. 13(1), pages 101-129.
    7. Glushkova, Ekaterina & Vernikov, Andrei, 2009. "How big is the visible hand of the state in the Russian banking industry?," MPRA Paper 15563, University Library of Munich, Germany.
    8. Vernikov, Andrei, 2009. "Russian banking: The state makes a comeback?," BOFIT Discussion Papers 24/2009, Bank of Finland Institute for Emerging Economies (BOFIT).
    9. Berger, Allen N. & Hasan, Iftekhar & Korhonen, Iikka & Zhou, Mingming, 2010. "Does diversification increase or decrease bank risk and performance? Evidence on diversification and the risk-return tradeoff in banking," BOFIT Discussion Papers 9/2010, Bank of Finland Institute for Emerging Economies (BOFIT).
    10. Vernikov, Andrei, 2010. "Direct and indirect state ownership on banks in Russia," MPRA Paper 21373, University Library of Munich, Germany.
    11. Fungáčová Z. & Solanko L., 2009. "Risk-taking by Russian banks: do location, ownership and size matter?," Higher School of Economics Economic Journal Экономический журнал Высшей школы экономики, CyberLeninka;Федеральное государственное автономное образовательное учреждение высшего образования «Национальный исследовательский университет «Высшая школа экономики», vol. 13(1), pages 101-129.
    12. repec:zbw:bofitp:2008_021 is not listed on IDEAS
    13. Pyle, William & Schoors, Koen & Semenova, Maria & Yudaeva, Ksenya, 2013. "Bank Depositor behavior in Russia in the Aftermath of Financial Crisis," MPRA Paper 68932, University Library of Munich, Germany.
    14. Zuzana Fungácová & Laura Solanko & Laurent Weill, 2010. "Market power in the russian banking industry," International Economics, CEPII research center, issue 124, pages 127-146.
    15. Fungáčová, Zuzana & Poghosyan, Tigran, 2011. "Determinants of bank interest margins in Russia: Does bank ownership matter?," Economic Systems, Elsevier, vol. 35(4), pages 481-495.
    16. repec:zbw:bofitp:2009_024 is not listed on IDEAS
    17. Kirdina, Svetlana & Vernikov, Andrei, 2010. "Эволюция Банков В Х- И Y-Экономиках [Evolution of banks in economies of X-type and Y-type]," MPRA Paper 23009, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:zbw:bofitp:2007_005 is not listed on IDEAS
    2. Vernikov, Andrei V., 2007. "Russia' banking sector transition: Where to?," BOFIT Discussion Papers 5/2007, Bank of Finland Institute for Emerging Economies (BOFIT).
    3. Le, Phuong Thanh & Harvie, Charles & Arjomandi, Amir & Borthwick, James, 2019. "Financial liberalisation, bank ownership type and performance in a transition economy: The case of Vietnam," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).
    4. Claessens, Stijn & van Horen, Neeltje, 2012. "Being a foreigner among domestic banks: Asset or liability?," Journal of Banking & Finance, Elsevier, vol. 36(5), pages 1276-1290.
    5. repec:zbw:bofrdp:2011_005 is not listed on IDEAS
    6. Gabriel Asaftei & Subal Kumbhakar, 2008. "Regulation and efficiency in transition: the case of Romanian banks," Journal of Regulatory Economics, Springer, vol. 33(3), pages 253-282, June.
    7. repec:zbw:bofitp:2018_005 is not listed on IDEAS
    8. Belousova, Veronika & Karminsky, Alexander & Kozyr, Ilya, 2018. "Bank ownership and profit efficiency of Russian banks," BOFIT Discussion Papers 5/2018, Bank of Finland Institute for Emerging Economies (BOFIT).
    9. Kyj, Larissa & Isik, Ihsan, 2008. "Bank x-efficiency in Ukraine: An analysis of service characteristics and ownership," Journal of Economics and Business, Elsevier, vol. 60(4), pages 369-393.
    10. Lensink, Robert & Meesters, Aljar & Naaborg, Ilko, 2008. "Bank efficiency and foreign ownership: Do good institutions matter?," Journal of Banking & Finance, Elsevier, vol. 32(5), pages 834-844, May.
    11. Mamatzakis, Emmanuel & Staikouras, Christos & Koutsomanoli-Filippaki, Anastasia, 2008. "Bank efficiency in the new European Union member states: Is there convergence?," International Review of Financial Analysis, Elsevier, vol. 17(5), pages 1156-1172, December.
    12. Belousova, Veronika & Karminsky, Alexander & Kozyr, Ilya, 2018. "The macroeconomic and institutional determinants of the profit efficiency frontier for Russian banks," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 49, pages 91-114.
    13. Adnan Kasman & Kamila Mekenbayeva, 2016. "Technical Efficiency and Total Factor Productivity in the Kazakh Banking Industry," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 66(4), pages 685-709, December.
    14. G. Lanine & R. Vander Vennet, 2006. "Microeconomic determinants of acquisitions of Eastern European banks by Western European banks," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 06/414, Ghent University, Faculty of Economics and Business Administration.
    15. Elisabeth Paulet & Francesc Relano, 2018. "Chinese banking reforms in perspective: towards global alignment or national specificity?," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(3), pages 294-311, May.
    16. Alexei Karas & Koen Schoors & Laurent Weill, 2010. "Are private banks more efficient than public banks?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 209-244, January.
    17. Fang, Yiwei & Hasan, Iftekhar & Marton, Katherin, 2011. "Bank efficiency in transition economies : recent evidence from South-Eastern Europe," Research Discussion Papers 5/2011, Bank of Finland.
    18. Kiril Tochkov & Nikolay Nenovsky, 2009. "Efficiency of commercial banks in Bulgaria in the wake of EU accession," ICER Working Papers 21-2009, ICER - International Centre for Economic Research.
    19. Sufian, Fadzlan, 2011. "Banks total factor productivity change in a developing economy: Does ownership and origins matter?," Journal of Asian Economics, Elsevier, vol. 22(1), pages 84-98, February.
    20. Delis, Manthos D & Papanikolaou, Nikolaos I, 2009. "Determinants of bank efficiency: Evidence from a semi-parametric methodology," MPRA Paper 13893, University Library of Munich, Germany.
    21. Dana PANCUROVA & Stefan LYOCSA, 2013. "Determinants of Commercial Banks’ Efficiency: Evidence from 11 CEE Countries," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(2), pages 152-179, May.
    22. Alin Marius Andries & Bogdan Capraru, 2013. "Impact of Financial Liberalization on Banking Sectors Performance from Central and Eastern European Countries," PLOS ONE, Public Library of Science, vol. 8(3), pages 1-9, March.
    23. Li, Qiang & Zeng, Yong & Liu, Bin, 2014. "Asymmetric information, foreign entry and multi-period credit competition in banking industry," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(2), pages 216-229.

    More about this item

    Keywords

    banking sector reform; privatization; Russia; economic transition; institutional economics;
    All these keywords.

    JEL classification:

    • 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
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:bofitp:bdp2007_005. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/bofitfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.