Clustering of the Federal Subjects of the Russian Federation by Deposit Risk Level

Natalya Lunyakova (), Oleg Lavrushin and Oleg Lunyakov ()
Additional contact information
Natalya Lunyakova: FSFEI of HE «Financial University Under the Government of the Russian Federation»
Oleg Lavrushin: FSFEI of HE «Financial University Under the Government of the Russian Federation»
Oleg Lunyakov: FSFEI of HE «Financial University Under the Government of the Russian Federation»

Economy of region, 2018, vol. 1, issue 3, 1046 - 1060

Abstract: The research is focused on the evaluation of regional differences by the level of deposit risk. Deposit risk is connected with resources sustainability of regions and can constrain the transformation of attracted deposits into credit and investment resources. The literature review shows that previous works were primarily focused on deposit risks at the micro level, that is, at the level of a bank. The Bank of Russia uses the same inductive approach to assess the financial sustainability and development prospects of credit institutions at the regional and national levels. However, the execution of prudential regulations by banks, in particular, liquidity ratios, does not allow to make a precise estimation of the differences among regions in terms of deposit risk. The presence of imbalances in the territorial concentration of credit institutions can affect the volatility and cost of deposit resources. The purpose of this paper is to improve the scientific and methodological approaches for assessing deposit risk. For this purpose, we propose to use cluster methods for classifying the regions based on the revealed internal links between deposit risk indicators. In contrast to previous scientific works, we offer to use semi-dispersion for calculating the volatility of deposits. The volatility of deposits can be interpreted as a measure of adverse downside risk. Furthermore, we propose the nominal scale to distinguish the different level of deposit risk. The research results confirm that there is a nonlinear linkage between the territorial concentration of credit organizations, level of provision of regions with banking services as well as volatility of deposits at the level of regions. We have revealed that the concentration of banking business in all regions is more closely connected with the sustainability of bank resources. The scientific approach to deposit risk evaluation presented in the paper expands the system of indicators for the development of the economy of regions. This approach can be used for both the monitoring of the financial and economic development of the regions of the Russian Federation and the macroeconomic forecasting.

Keywords: bank; territorial concentration; interbank competition; demand deposits; term deposits; bank resources; deposit risk; volatility; cluster analysis; economy of region (search for similar items in EconPapers)
JEL-codes: C38 G31 O18 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://economyofregion.ru/Data/Issues/ER2018/Septe ... er2018_1046_1060.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ura:ecregj:v:1:y:2018:i:3:p:1046-1060

Access Statistics for this article

More articles in Economy of region from Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences
Bibliographic data for series maintained by Alexey Naydenov ().