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TRENDS AND SCENARIOS OF THE RUSSIAN BANKING SECTOR REGULATION DEVELOPMENT
Abstract
The paper addresses the widely discussed problems of development of banking systems, as well as the problem of achieving a balance between ensuring financial stability and stimulating business activity in the country. The lessons of the global financial and economic crisis 2007-2009 prompted regulators and, in particular, the Basel Committee on banking supervision, to transform the regulatory system to more rigid models. The need for restrictions on the freedom of the market through increased powers of regulatory bodies is argued in this paper. Restrictions on the adoption of risk banks have had an impact on curbing business activity monetary institutions in connection with the need for additional buffers of capital formation, lower dividend payouts, needs forming sufficient reserves for possible losses, maintain liquidity at a safe level, etc. Simultaneously the consequence was the growth restrictions imposed regulatory costs in the banking sector, easing interaction banking and real sectors of the economy mainly in emerging markets, reducing the number of existing credit organizations in connection with revocation of licenses and increased cost of restoration. These measures led to an increased presence of the State in the capital of credit institutions, reduce fair competition, increase administration and control. In these circumstances, regulators are searching for directions to overcome contradictions between financial stability and economic development. In this regard, the author examines different regulatory scenarios. The study uses comparative methods, benchmarking to market practices and recommendations for analysis and identification of the main risks affecting financial market. The author analyses the banks commitment to the international standards of regulation with regard to the expected stimulation of business activity in the short and long run, concluding that banks regulation can become a new source for a new financial crisis.
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References12
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