The impact of state-controlled banks on the Russian banking sector

Vernikov, Andrei (2017): The impact of state-controlled banks on the Russian banking sector. Published in: Eurasian Geography and Economics , Vol. 53, No. 2 (30 June 2012): pp. 250-266.

Abstract

This paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country’s banking system in early 2011. The author offers a credible estimate of the size of the country’s state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author’s interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country’s banking sector.

• Item Type: MPRA Paper
• Language: English
• Keywords: Russia, Russian banks, government control, state-owned banks, public sector, bank assets, bank deposits, bank loans, Chinese banks, private banks
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation; H - Public Economics > H8 - Miscellaneous Issues > H82 - Governmental Property; L - Industrial Organization > L8 - Industry Studies: Services > L80 - General; P - Economic Systems > P5 - Comparative Economic Systems > P52 - Comparative Studies of Particular Economies

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