Russian Banking System Research Articles

Changes in household saving and borrowing behavior during the economic crisis

In the article the authors use the well-known model of “permanent income” to explain the behavior of Russian households in a situation of economic crisis. The authors challenge the widespread opinion in the Russian economic community that the Russian banking system’s recovery from the crisis caused by the coronavirus epidemic will be quite short and intensive. The almost thirty-year history of economic crises in Russia does not give rise to such optimism. The article provides evidence that during the past economic crises, Russians have always chosen the “savings” model of behaviour. The essence of this model is that at the first obvious symptom of the crisis, which is a reduction in current income (less often a loss of employment), households sharply reduce their current consumption. It is noteworthy that the savings behaviour pattern extends beyond the acute phase of the crisis. A high savings rate is maintained for a long time as the value of current household income has recovered. It is assumed that the savings model has become a stable behavior pattern as a result of the long (about 20 years) period of stagnation of the Russian economy at the turn of the 20th-21st centuries.

The rise of collateral-based finance under state capitalism in Russia

ABSTRACT The article examines emerging financial capitalism in Russia and its recent developments, the rise of collateralised finance and trading in repo markets. The main conclusion is that a combination of sophisticated speculative practices with a strong state presence in financial markets is a distinctive feature of Russia after 2008. The decoupling of the financial system from the credit supply to the real sector is still continuing after the collapse of Communism. The role of the capital markets is restricted to short-term liquidity management in money markets, which rose after 2011 due to an increased provision of state liquidity. The existence of a large monetary overhang accumulated within the Russian banking system and its interconnectedness with collateralised markets are discussed. The development stages of the repo markets and the main collateral types are considered in relation to the expansion of the state liquidity supply. This study provides an additional perspective within the ongoing debate on contemporary state capitalism in emerging markets.

ПЕРСПЕКТИВЫ РОССИЙСКОЙ БАНКОВСКОЙ СИСТЕМЫ В УСЛОВИЯХ РАЗВИТИЯ ЕВРАЗИЙСКОЙ ИНТЕГРАЦИИ

Purpose: is to study the impact of the EAEU integration on the Russian banking system and identify the benefits for its development due to integration processes. Results: the financial indicators of banking sectors of the EAEU countries are examined and their comparative analysis is performed. This showed the possibilities for the development of the Russian banking system in the domestic market and in the territory of the Union States. The regulatory documents of the EAEU have been studied. The expected positive effect for the Russian banking sector from the implementation of the EAEU common financial market project was noted. Various issues of introducing a single currency as a means of payment for the calculation of the EAEU countries are investigated. The current structure of payments of the Union States in national and world reserve currencies is considered. This allowed us to identify Russia's interests in creating a currency union and identify the constraints of this process. The presence of Russian banks outside the country and their position in the international arena are considered. A list of the main obstacles to their expansion abroad is formulated. The article reveals the relationship between the development of integration processes in the EAEU and the opportunities to increase the competitiveness of the Russian banking system in the global financial market. Conclusions: the Banking system of Russia today has a great potential for development on a national scale, in the market of banking services of the Eurasian Union and at the global level. The integration policy of the EAEU in the banking sector contributes to increasing the competitive advantages of the Russian banking system. The implementation of the agreed strategic plan to create a common financial market for the EAEU will accelerate the process of qualitative development of the Russian banking system.

Digital transformation of Russia's banking system as improving the competitiveness of banks

Subject. The article discusses the need for digital transformation of banking services in the context of ensuring the appropriate level of competitiveness of banking institutions in the Russian financial market. Objectives. The article aims to identify prospects and trends of the digital transformation of the Russian Federation's banking system in the context of improving the banks' competitive advantages and competitiveness at the current stage of development. Methods. For the study, I used the theoretical and methodological, and systems approaches. Results. The article identifies leaders in the digital transformation of banking processes and services, enabling them to provide a certain level of competitive advantages through improving the quality, accessibility and rate of services providing, as well as minimizing costs. Conclusions. The rapid development of the digital transformation of banking activities in the global financial market system necessitates the use of this experience by commercial banks of the Russian Federation.

Obecność kapitału zagranicznego w systemie bankowym Rosji

Celem artykułu jest zaprezentowanie ewolucji obecności kapitału zagranicznego w systemie bankowym Rosji od początku okresu transformacji do początku lat 20. XXI w. Z przeprowadzonej analizy wynika, że w okresie 30 lat tych przemian w Rosji można wyróżnić kilka odmiennych kierunków przepływów kapitału właścicielskiego do systemu bankowego i czynników wpływu na te przepływy. W początkowym okresie transformacji występowała silna presja napływu kapitału zagranicznego do rosyjskiej bankowości, która była ograniczana przez formalne i nieformalne działania ze strony rządu i banku centralnego. Należy tu wspomnieć o ustalanych przez rząd limitach obecności kapitału zagranicznego w kapitale systemu bankowego w celu ochrony rodzimej bankowości przed zagraniczną konkurencją. Surowe procedury weryfikacji potencjalnych inwestorów zagranicznych przez bank centralny miały na celu ochronę rosyjskiej bankowości przed napływem kapitału spekulacyjnego oraz nadmiernym i niekontrolowanym dopuszczeniem do rynku usług bankowych wiarygodnych instytucji finansowych. Tendencja wzrostu udziału kapitału zagranicznego w rosyjskiej bankowości zatrzymała się w okresie kryzysu bankowego w 1998 r., kiedy kapitał zagraniczny w obawie przed stratami wycofywał się z Rosji. W latach 1999-2008 można zauważyć wzrost obecności kapitału zagranicznego, który został zatrzymany w okresie światowego kryzysu finansowego w efekcie wycofywania się kapitału z rynków wschodzących. W okresie 2009-2014 kapitał zagraniczny w kapitale własnym rosyjskiego sektora bankowego wyraźnie się umacniał, ale ten trend został przerwany przez sankcje gospodarcze zastosowane wobec Rosji przez Zachód w konsekwencji agresywnej polityki Rosji wobec Ukrainy i wojny rosyjsko-ukraińskiej. Od 2014 r. obserwuje się załamanie ekspansji nowych instytucji finansowych w rosyjskiej bankowości, a jednocześnie silne umocnienie pozycji banków z udziałem kapitału zagranicznego, szczególnie tych działających od dłuższego czasu na rynku rosyjskim i mocno już osadzonych w rosyjskim systemie bankowym. Banki te cieszą się wysoką wiarygodnością i są darzone zaufaniem klientów.

Credit risk management: the Crimean banking sector in the modern realities of the Russian banking system

Credit risk management: the Crimean banking sector in the modern realities of the Russian banking system

АНАЛИЗ СТРАТЕГИЙ РАЗВИТИЯ РОССИЙСКОЙ БАНКОВСКОЙ СИСТЕМЫ НА СОВРЕМЕННОМ ЭТАПЕ (Analysis of the Development Strategies of the Russian Banking System at the Present Stage)

Russian Abstract: Объектом исследования являлась банковская система Российской Федерации. Основной целью исследования являлся анализ возможных стратегий развития российской банковскойсистемы для обеспечения экономического роста English Abstract: The object of the research was the banking system of the Russian Federation. The main purpose of the study was to analyze possible strategies for the development of the Russian banking system to ensure economic growth.

СОВЕРШЕНСТВОВАНИЕ ПРЕМИАЛЬНОГО БАНКОВСКОГО ОБСЛУЖИВАНИЯ: НЕОБХОДИМОСТЬ И ВОЗМОЖНОСТИ

The need for a transition to an intensive and innovative development path is overdue in the banking system of Russia. The quality parameters of the premium banking service program for top-5 banks were analyzed. Factors of interest to the banks and their clients were identified. Suggestions on possible ways to improve premium banking programs were formulated. For the analysis, the authors selected banks with the most interesting bonus programs. The contextual analysis of the qualitative parameters of the premium banking programs allowed identifying these programs’ important components and possible problems. These are: the digitalization of banking services, which actively penetrates the segment of the wealthy client; lower business margins; search for the real value of a premium service for the customer. In the authors’ opinion, the most urgent problem is the combination of trends in the digitalization of the banking services and the needs of individualization of the approach to servicing a premium client. The main directions for improving premium banking programs were formulated. They are associated with improving the skills of the program staff; searching for new additional offers and organizing operational feedback for this; expanding the line of financial products offered to premium customers, for example, investment and insurance products, legal services. Premium banking provides a premium client with a special status in terms of service individualization, involves working with target segments, and offers bonus programs of banking products and services aimed at specific target audiences. Therefore, premium banking encourages the bank to identify and differentiate different target groups (audiences) by income level, investment goals, etc.; to conduct events (training seminars, conferences, presentations) to attract individuals to the financial market. Premium banking provides a balance between the economic interests of the company, the financial market and the banking system, commercial banks and individuals. Therefore, the task of developing this segment of the banking services market becomes relevant, meeting the modern needs of the economy. Primarily, the introduction and improvement of premium banking are beneficial to commercial banks themselves, as it increases their level of competitiveness, contributes to the formation of customer loyalty, thus allowing for a more complete satisfaction of customer needs in special services. Currently, improvements in premium banking could also contribute to raising the financial awareness of private clients concerning investment opportunities in the financial markets that would provide effective and balanced development of the financial market of Russia.

Устойчивость российского банковского сектора: тенденции и риски

In the modern conditions of functioning of the banking system, the issues that arise with the assess¬ment of the stability of a commercial bank individually and the banking sector as a whole in connection with the aggravation of the negative impact of many risk-forming factors associated with the manifestation of the pandemic are updated. In this regard, a comprehensive systematization of the existing Russian and international practice of implementing a qualitative assessment of the stability of banking organizations becomes important. The purpose of the study is to identify trends in the development of the Russian banking sector and the manifestations of banking risks that have a negative impact on its stability, as well as to identify practical opportunities to reduce the impact of these risks. The following general scientific and special methods were chosen as scientific tools for conducting this study: the method of system analysis, the method of retrospective analysis, as well as the methods of statistical survey. The information base of the study was the statistical data of the Bank of Russia. The theoretical and meth¬odological basis of the study was the works of such researchers as Fetisov G. G., Lavrushin O. I., Tarkhanov E. A., Muraviev A. K. Ovchinnikov O. P., Betz A. Yu., Peresetsky A. A. Kromonov V. S., etc. The study is based on the basic definitions of the stability of banking organizations and the regulatory framework for assessing the stability of the Russian commercial bank, as well as methods, mechanisms and procedural components for assessing the stability of the Russian banking sector. The results of the study are aimed at identifying trends and risks that affect the stability of both the Russian banking system as a whole and individual commercial banks. As practical recom¬mendations, the directions for further sustainable development of the Russian banking sector in the context of the negative impact of the pandemic on the national economy are presented.

РОССИЙСКИЙ РЫНОК БАНКОВСКИХ ПРОДУКТОВ В УСЛОВИЯХ РАЗВИТИЯ ЦИФРОВОЙ ЭКОНОМИКИ

At the present stage of economic development, the economy has entered the total digitalization of the economic activities of the entities. The banking sector began to move into a completely new plane of relations with customers, the state, the banking community and was at the center of global changes. The advent of the transition to digital formats and digitisation of production processes requires banks to quickly respond to modern changes in order to keep pace with improving trends both in the world and in Russia. Global changes in the banking sector are already approaching, which will radically change the banking world through the introduction of digital technologies and virtual financial institutions. Already, the banking sector is undergoing a digital revolution, many banks have introduced online solutions and artificial intelligence, mobility, remote service, these innovations are willingly perceived by the population, thereby increasing customer flow. Classical financial institutions are no longer in demand, and if they are in demand, then only among a small part of the population. Now, if the bank does not respond to innovative innovations, then it will remain behind actively developing competitors. Thus, innovation comes first among the conditions for promoting the bank in the financial market, and, therefore, increasing the bank’s profitability by increasing customer flow. The ongoing digital breakthrough is mainly caused by fierce competition among banks. Competition gave a good boost to credit institutions, and they were engaged in «refreshing» their products, services and technologies. The article considers the current state and trends that stimulate the introduction of digital technologies into the banking business, as well as the problems of the banking system of Russia during the pandemic caused by the new coronavirus SARS-CoV-2 (COVID-19).

ВЛИЯНИЕ ПАНДЕМИИ КОРОНАВИРУСА НА БАНКОВСКУЮ СИСТЕМУ РОССИИ

The article deals with the current topic of the development of the Russian banking system in the context of the coronavirus pandemic. The current state of the banking sector and the activities of individual credit institutions are analyzed. The threat of a pandemic impact on the state’s banking sector is being studied. Taking into account the current situation, problems arise in the activity of banks, including the lack of full communication between credit institutions and customers– one of the most important factors in the development of banking business. It is quite difficult to operate remotely — most businesses are based on personal communication between employees and customers. The main problem and difference between the current situation and past crises is not the economic nature of the current crisis. Therefore, it is quite difficult to assess its progress and the consequences of the pandemic. The situation will depend on how widespread the COVID-19 pandemic is and how the authorities will respond to it. The consequences of a pandemic are unpredictable in their duration and impact. It is obvious that the country is waiting for a drop in production and this is a serious blow. How fast the economic recovery will be depends on the duration of the pandemic. The measures taken by the government to support the population (issuance of zero loans and registration of credit holidays, etc.), today will cause damage to the banking sector by about 400 billion rubles. If we take into account last year’s net profit of the country’s banks, which amounted to 1.7 trillion rubles, the banking system will withstand this blow. The main risk for banks will be non-repayment of loans by businesses, deterioration of the loan portfolio. This may lead to a crisis in some sectors of the economy, whose enterprises are borrowers. According to the most negative estimates of experts, the losses of the banking sector may amount to about 900 billion rubles. The crisis triggered by the coronavirus pandemic will be felt by the country’s banks in the next six months. Banking organizations will need financial support from the state. Some financial institutions will not survive without state aid. In the current situation associated with the COVID-19 epidemic, banking organizations are still only underperforming. After the pandemic, the country’s banks, as well as their clients, will find themselves in a new reality. The economic situation in the country will be different. Entire sectors of the economy may be transformed. Some banking organizations will close, and the remaining financial institutions will develop remote services, which they switched to during the coronavirus period. It is quite difficult to predict what will happen to the rates of loans and deposits and the ruble exchange rate. This depends on many factors. One thing is clear-the world will not be the same.

Monitoring of Russian banking system in terms of digital transformation

The main characteristics of modern financial and credit institutions are flexibility, ability to adapt to changes in conditions of risk and uncertainty. The process of adaptation may have low efficiency without intensive monitoring of financial and credit institutions’ operation in direction of improving their technological basis. The article is devoted to some aspects of monitoring directions of financial and credit institutions’ transformational development. The social environment acts as a final consumer of banking services and determines the features of the transformation process in the Russian Federation. The research results can be used in generalized form in managerial and financial environment to improve effectiveness of the infrastructure development based on informational and technology platforms. The main contribution of the research is to identify changes in the mechanism of relationship of managed and managerial systems, identification of modern communication tools, reasoning of emergence and development of social and economic directions of financial and credit institutions’ transformational development.

The Russian banking sector: new development trends

The article examines the key trends in the banking system of the Russian Federation in 2017-2019. The efficiency of the use of domestic financial resources and the intensity of accumulation processes largely determine the level of socio-economic development of the state, which confirms the key role of banks and the banking sector in the development of the national economy. Although the Russian banking sector is experiencing rapid growth, it still does not reach a sufficient level of development of the competitive environment and market discipline, which negatively affects the quality of banking services. The aim of the study is a comprehensive analysis of current trends in the development of the banking sector of the Russian Federation over the past three years. During the study, comparison methods and economic and statistical methods were used. The tasks of the work are to identify existing problems in the Russian banking sector and its prospects. The result of this work was a study of key indicators of the banking system of the Russian Federation in 2017-2019. This study analyzed the dynamics of the number of credit institutions, financial results of the banking sector, as well as the volume of credits and deposits of legal entities and individuals. The main conclusion of the work was that despite the active development of the Russian banking system in recent years, there are still problems that need to be solved. Global processes and challenges, such as the coronavirus pandemic in 2020 and related restrictions, have a negative impact on the financial sector both in Russia and globally. This also includes foreign sanctions. In these circumstances, the subsequent development of the domestic banking sector will largely depend on the development of the situation with coronavirus and Russia’s diplomatic relations.

Structure of the Russian banking system

Structure of the Russian banking system

БАНКОВСКАЯ СИСТЕМА РОССИИ: РЕГИОНАЛЬНЫЙ АСПЕКТ

The article provides an assessment of the state of the Russian banking system in the regional context. The study is carried out on the basis of an analysis of a number of socio-economic indicators proposed in one of the methods for assessing the regional banking system. The paper presents and calculates data for federal districts, including indicators of institutional development and characteristics of banks’ activities, such as the value of assets, the share of assets in GRP, loans to the economy. Based on the analysis of the obtained indicators, the features inherent in the banking system at the present stage are highlighted.

Financial Features of Systemically Important Banks Operation in Modern Conditions

The modern banking system is one of the key elements of any national economic system that influences the formation of economic processes. In this regard, it is important to identify the main elements of the banking system that have the greatest impact on the modern economy. The article reveals the financial and distinctive features of modern systemically important credit organizations of the Russian Federation. The authors of the article, based on the structural and dynamic analysis of the credit organizations indicators system, identified the main trends in the banking system development, highlighting the role of systemically important banks in this process. In the course of the analysis, based on the reporting data on the development of the Russian banking system for 2016-2019, the connection between the dynamics of the systemically important credit institutions development and the banking system as a whole was determined. The main conclusions presented in the article can be used in scientific and practical activities in order to strengthen and develop banking regulation and supervision of the largest Russian banks.

Management of risks of the Russian banking system in the context of economic crisis

Subject. The article addresses the Russian approach to mitigating major banking risks that result from the current global economic recession. Objectives. I focus on the study of the existing system for banking risk regulation in Russia and its potential under the prevailing circumstances. Methods. The study draws on general scientific methods (analysis, synthesis, comparison, comparison, generalization, abstraction) and elements of comparative, economic and statistical, structural-functional analysis. The paper rests on the provisions of Federal laws of the Russian Federation, regulations of the Bank of Russia, and the IMF data. Results. The paper analyzes causes and effects of the aggravation of the main banking risks, defines stages of actions taken by Russian banks to minimize the negative impact of risks, investigates modern methods of quantitative and qualitative assessment of existing risks and possible risk-related financial losses, unveils the pros and cons of certain methods. It presents a detailed description of possible actions on the part of banks' management to respond to emerging risks and mitigate them to acceptable level. Conclusions. To be sustainable, the Russian banking sector should have a strong risk management system, enabling to evaluate and predict changes in the degree of risks and financial losses caused by them.

Strategy of development for a banking system of Russia in the conditions of recession of economy

Recession of economy of many countries of the world demands development of the new strategy of development for all her spheres, including bank. The banking system of Russia can promote strengthening of small and medium business, joint financing together with the state of national projects, to the solution of problems of social protection of the population of Russia.

Specifics of using credit banking instruments in conditions of the Russian banking system development

Subject. Uncertainty and risks of the banking system development have increased against the background of identified inefficient credit and payment instruments. The conceptual framework for the said system development includes not only the State support to backbone banks, but also establishing the cause-effect relationship between the offered banking product and the service, and the conditions and legal grounds stipulated for banks, having basic and universal licenses. Objectives. The purpose is to identify the specifics of banking operations related to credit products, considering the changes in distribution of payment instruments of banks in the credit card market. Methods. The study employs empirical and theoretical methods, like formalization, observation, comparison, test of cause and effect relationships. The systems approach forms a basis of the study. Results. I consider conditions for obtaining the government support for targeted loans, including the participation in major innovative projects and programs and the need to balance financing for the acquisition of intangible assets through subsidized interest rates on loans. It is recommended to introduce the concept of ‘credit banking instruments’ for scientific and economy-related purposes. Conclusions. Improving the efficiency of the use of credit banking instruments should be implemented on the basis of a comprehensive system of preventing financial losses, diversification of loan portfolio and optimization of payments with bank card holders, taking into account the lending policy, formed in the context of activities of a particular federal district and the subject of the Russian Federation.

Criteria for classifying banks as systemically important in the Russian banking system

Subject. We address the criteria to classify banks as systemically important, their activities and the assessment of their impact on macroeconomic indicators. Objectives. The aim is to determine areas of regulation, based on criteria for classification of a bank as systemically important in the Russian banking sector, and taking into account its impact on the national economy. Methods. The study draws on methods of logical, statistical, and comparative analysis, as well as the correlation analysis to determine the correlation between financial indicators of systemically important banks and the country's GDP. Results. We offer the following criteria to determine systemically important banks, in addition to indicators used in the Russian banking practice: ‘interchangeability’ of a bank (based on the volume of payments in payment systems), ‘complexity’ (based on bank's activity in the securities market). Our correlation and regression analysis shows a significant positive impact of activities of too-big-to-fail banks on the Russian economy. The greatest impact on GDP is noted for indicators, like the volume of total capital, deposits of the population, loans to individuals. Therefore, the regulation can be aimed not only at preventing crisis situations and instability of the financial system, but can also be a tool for increasing the rates of economic growth. Conclusions. If the Bank of Russia uses the proposed additional criteria, it will enable to include in the list of such banks the internationally active credit institutions serving significant volumes of settlements in payment systems, and carrying out transactions with complex high-risk derivatives.