Currency Shifts as a Market Discipline Device: The Case of the Russian Market for Personal Deposits

Maria Semenova and Andrey Shapkin ()
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Andrey Shapkin: Sberbank

HSE Working papers from National Research University Higher School of Economics

Abstract: Market discipline in the personal deposit market is of great importance for regulators. In developing economies, which rely much and are dependent on the dollar and euro, changes in the currency structure of the deposits may be strategic and work as an additional disciplining mechanism. Our study sheds light on this mechanism of currency shifts in the Russian market for personal deposits. Using data on more than 900 Russian banks for 2005¬–2015, we provide evidence that less risky banks—at least in terms of capital adequacy and liquidity—demonstrate higher growth of both the volume and the share of deposits denominated in foreign currency, even when the exchange rate volatility component is extracted. This mechanism continued working during the financial crisis of 2008–2009

Keywords: Market discipline; Personal deposits; Currency shifts; Russia (search for similar items in EconPapers)
JEL-codes: G01 G21 P2 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2016
New Economics Papers: this item is included in nep-cis, nep-mon and nep-tra
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Published in WP BRP Series: Financial Economics / FE, September 2016, pages - 26

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Journal Article: Currency Shifts as a Market Discipline Device: The Case of the Russian Market for Personal Deposits (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:57/fe/2016

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