Government Banking in Russia: Magnitude and New Features

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We show that direct state ownership is gradually substituted by indirect ownership and control. It tends to be organized in corporate pyramids that dilute public property, take control away from government bodies, and underpin managerial opportunism. Statecontrolled banks blur the borderline between commercial banking and development banking. Dominance of public banks has a bearing on empirical studies whose results might suggest state-owned banks' greater (or lesser) efficiency or competitiveness compared to other forms of ownership. We tend to interpret such results as influenced by the choice of indicator, period of observations, sample selection, etc., in the absence of an equal playing field for all groups of players. We suggest that the government's planned retreat from the banking sector will involve non-core assets mainly, whereas control over core institutions will just become more subtle. Terms of use: Documents inKeywords: Russia, banks, government, state-owned banks, public sector JEL Classification: G21, G28, P31, P52

The Impact of State-Controlled Banks on the Russian Banking Sector

“…One can find growing similarities between the models of banking in Russia and in China, although Speranskaya (2009) has argued that divergence is actually more prominent than convergence. In the recent past, this author has more than once questioned the direction of structural change in the banking industry (e.g., see Vernikov, 2009Vernikov, , 2011 of Russia. This paper continues to assess the viability of state ownership of banks in Russia, by presenting an alternative estimate of the public sector's share in the country's banking industry, as well as discussing some distinctively Russian characteristics, such as the paradoxically high profitability of state-controlled banks (which contradicts predictions based on theory) and the replacement of direct government ownership by less transparent forms of indirect ownership and control.…”