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Survival of Russian banks: how efficient are the control measures?

Author

Listed:
  • Angel Barajas
  • Victor Krakovich
  • Félix J. López-Iturriaga
Abstract
Purpose - In this paper, the authors study the failure of Russian banks between 2012 and 2019. Design/methodology/approach - The authors analyze the entire population of Russian banks and combine a logit model with the survival analysis. Findings - In addition to the usual determinants, the authors find that not-failed banks have higher levels of fulfillment of the Central Bank requirements of solvency, liquidity, provide fewer loans to their shareholders and own more shares of other banks. The results of this study suggest an asymmetric effect of the strategic orientation of banks: whereas the proportion of deposits from firms is negatively related to the probability of failure, the loans to firms are positively related to bankruptcies. According to this research, the fact of being controlled by a foreign bank has a significant negative relationship with the likelihood of failure and moderates the effect of bank size, performance and growth on the bankruptcy likelihood. Practical implications - On the whole, the results of this study support the new Central Bank rules, but show that the thresholds imposed by the Russian regulator actually do not make a difference between failed and not failed banks in the short and medium term. Originality/value - The authors specially focus on the effectiveness of new rules issued by the Central Bank of Russia in 2013.

Suggested Citation

  • Angel Barajas & Victor Krakovich & Félix J. López-Iturriaga, 2022. "Survival of Russian banks: how efficient are the control measures?," European Journal of Management and Business Economics, Emerald Group Publishing Limited, vol. 32(3), pages 320-341, September.
    • Handle: RePEc:eme:ejmbep:ejmbe-12-2021-0329
    DOI: 10.1108/EJMBE-12-2021-0329
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    More about this item

    Keywords

    Bankruptcy; Bank failure prediction; Capital adequacy; Russia; E58; G21; G33;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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