Bank supervision Russian style: Rules versus enforcement and tacit objectives

Sophie Angelique Claeys, Gleb Lanine and Koen Schoors
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Gleb Lanine: CERISE, Postal: Department of Economics and Centre for Russian International Socio-political and Economic studies, Ghent University, Hoveniersberg 24, B-9000 Ghent

No 10/2005, BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition

Abstract: We focus on the conflict between two central bank objectives – individual bank stability and systemic stability. We study the licensing policy of the Central Bank of Russia (CBR) during 1999-2002. Banks in poorly banked regions, banks that are too big to be disciplined adequately, and banks that are active on the interbank market enjoy protection from license withdrawal, which suggests a tacit concern for systemic stability. The CBR is also found reluctant to with-draw licenses from banks that violate the individual's deposits-to-capital ratio as this conflicts with the tacit CBR objective to secure depositor confidence and systemic stability.

Keywords: bank supervision; bank crisis; Russia (search for similar items in EconPapers)
JEL-codes: E50 G20 N20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cba, nep-fin, nep-fmk, nep-mac, nep-mon, nep-reg and nep-tra
Date: 2005-09-05
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Working Paper: Bank Supervision Russian style: Rules versus Enforcement and Tacit Objectives (2005)
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