Economic Survey of Russia 2009: Making the banking sector more efficient and resilient
Russia’s banking system grew much larger and stronger between the 1998 financial crisis and the onset of the current global crisis, but continued to play a limited role in intermediating savings and investment, especially for small and medium sized enterprises. Moreover, some weaknesses in prudential supervision remained, and there were still too many very small banks doing little if any banking business. This chapter discusses the policy imperatives in the short term, in the face of the crisis, and reforms that could be implemented over the longer term to improve the efficiency and resilience of the financial system and raise Russia’s potential growth rate. While the current crisis is painful for both the banking sector and the broader economy, it may facilitate a restructuring of the system that will be positive in the long run, as well as new approaches to regulation that will make banking less crisis-prone.
Long abstract
