The Financial Depth of Emerging Markets: The Case of Russia

Abstract

The purpose of this article is to assess the financial depth of the Russian economy in the context of its main rivalries within the BRIC group. The Russian financial market is evaluated by a set of key indicators that characterize the level of maturity of the national financial system in respect to international standards. This task is implemented through descriptive analysis of extensive international data generated from a time series covering the period 1995–2010. The article demonstrates that, in comparison to other emerging markets, and its closest competitors Brazil, India and China, the financial depth of the Russian economy may be characterized as inadequate. In the Russian financial market potential for growth is combined with exceptionally high risks. Insufficient depth of the financial system undermines its long-term competitiveness and exacerbates its exposure to shocks in the international market.

The 2014–15 Financial Crisis in Russia and the Foundations of Weak Monetary Power Autonomy in the International Political Economy

“…The financialisation of banking, alongside the deep economic downturn, the hyperinflationinduced loss of household savings, the dollarisation of the financial system, and large-scale deindustrialisation, resulted in the Russian economy's low financial depth. This is defined as the financial sector's ability to provide funds to the government and the private sector (Mirkin et al 2013). This phenomenon persisted throughout the 1990s, 2000s and 2010s, reflecting a broken monetary transmission mechanism, a systemic inability to transform banking liquidity into credits with low interest rates.…”

Money Market Instruments and Financial Deepening in the Nigeria Emerging Economy

“…Klein and Olive (2008) noted that the greater the financial deepening, the more significant is the ability of the financial sector to reallocate financial resources in support of economic development. Mirkin, Kuznetsova &Kuznetsov (2013) aver that financial deepening reflects the compatibility between the volume of production and the size and structure of the financial sector in terms of savings, investments and redistributive mechanisms particularly via financial instruments. Hence, this study seeks to empirically examine the influence of money market instruments on financial deepening, measured as the ratio of money supply to gross domestic product.…”

The Financial Systems in Russia and Turkey: Recent Developments and Challenges

“…46 Though market turnover has been generally rapid, it reached at times alarmingly high levels on the heels of sustained investor speculative activity (Troika Dialog, 2010). Domestic markets in Russia are indeed dominated by short-term investments by non-residents (or residents acting as foreign investors; see also below), which undertake most transactions in these markets to avoid long-term exposures (Mirkin et al, 2013).…”