BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 24/2009:
Russian banking: The state makes a comeback?
Andrei Vernikov ()
Abstract: The purpose of this paper is to carefully assess the size
of public sector within the Russian banking industry. We identify and
classify at least 78 state-influenced banks. For the state-owned banks, we
distinguish between those that are majority-owned by federal executive
authorities or Central Bank of Russia, by sub-federal (regional and
municipal) authorities, by state-owned enterprises and banks, and by ‘state
corporations’. We estimate their combined market share to have reached 56%
of total assets by July 1, 2009. Banks indirectly owned by public capital
are the fastest-growing group. Concentration is increasing within the
public sector of the industry, with the top five state-controlled banking
groups in possession of over 49% of assets. We observe a crowding out and
erosion of domestic private capital, whose market share is shrinking from
year to year. Several of the largest state-owned banks now constitute a de
facto intermediate tier at the core of the banking system. We argue that
the direction of ownership change in Russian banking is different from that
in CEE countries.
Keywords: Russian banks; transition; banking; state; government; public sector; state-owned banks; state-controlled banks; state-influenced banks; (follow links to similar papers)
JEL-Codes: G21; G28; P31; P43; (follow links to similar papers)
28 pages, December 21, 2009
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