Microeconomic and Macroeconomic Effects of the Banking Sector Development Policy in Russia

Отраслевые и макроэкономические эффекты политики оздоровления российского банковского сектора

Ivan Darovskii (idarovskii@hse.ru)

Ekonomicheskaya Politika / Economic Policy, 2020, vol. 4, 30-61

Abstract: This article studies the impact of banking supervision on the Russian banking sector structure. The article also discusses the main challenges facing the banking system and the macroeconomic role of the Bank of Russia’s supervisory policy. Taking into account some features of the national banking sector, the author justifies the current strict banking supervision despite all possible short- and longterm negative effects of this policy. For example, static and dynamic estimates of the competition level in the Russian banking sector, which were obtained using structural and non-structural methods, show a low competition level. A non-competitive banking industry increases costs in the economy and exacerbates existing imbalances. For this reason, the paper considers key measures that contribute to the development of banking competition. The article emphasizes the great importance of the goals of building a full three-tier banking system and privatization of public sector banks. However, strict banking supervision and consolidation of the banking industry have reduced the impact of negative factors on the supply of loans and increased the Russian banking sector’s sustainability. These positive changes and macroeconomic reform provide the basis for stable economic growth. The main results obtained can be used by national authorities to develop the Russian banking system.

Keywords: banking supervision; consolidation of the banking industry; concentration level; Herfindahl—Hirschman index; competition; Panzar—Rosse model; lending; macroeconomic stability. (search for similar items in EconPapers)
JEL-codes: E32 E58 G21 G28 L16 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:rnp:ecopol:ep2023

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