The pace of global recovery remains weak. More than twelve months since the G-20 summit in Los Cabos, G-20 members are laboring their way towards “Strong, Sustainable and Balanced Growth” in a clouded world economic outlook, with the eurozone in a state of recession, a combination of policy stalemate and across the board fiscal consolidation constraining growth in the U.S., and emerging markets and developing countries experiencing a clear slowdown compared to their rapid pre-crisis expansion. A durable recovery that creates good jobs, which G-20 leaders agreed to cooperate for in September 2009, proves to be an elusive objective. Fiscal consolidation acts as a drag on economic recovery and the G-20’s capacity to deliver on the growth and jobs agenda is questioned by its citizens. This calls for the G-20 members’ commitment to a balanced and coordinated mix of policies and instruments, reflective of the state of their economies, which would gradually strengthen economic growth and promote macroeconomic stability. Responding to global and domestic priorities, Russia has placed growth and jobs at the core of the G-20 agenda within the fundamental question of what should be the main macroeconomic and financial policy requirements for growth.
The problem of optimal monetary policy is extremely relevant for Russia. Although the monetary authority claims that inflation targeting is the main goal of the monetary policy, empirical finding suggest that the real exchange rate targeting is of major importance (see Vdovichenko / Voronina 2004). Due to the rising flow of petrodollars, the rouble is currently experiencing a significant real appreciation. The fear to harm exports causes the monetary authority to respond by accumulating dollar reserves and increasing the money supply, thus preventing a nominal appreciation. Such policy leads to high inflation which benefits of some groups at the expense of others. That is why the optimal degree of intervention is in the centre of the current political and economic debate.
Combination of the offered volume on the REPO auction with the Bank of Russia and the demand for it produce powerful signaling mechanism for the interbank money market. In order to have a possibility to emit an unintended signal there is a need for a robust estimator of the demand. This paper proposes an approach to produce such an estimator through an ensemble of logistic and linear regression models. This estimator successfully emulates many of the key features of the process.
Using a panel data set of 180 countries spanning from 1971 to 2000, we find evidence that exchange rate policy affects macroeconomic performance for the sample of non-industrialized countries. We consider two measures of economic performance: i) per capita GDP growth and ii) the volatility of per capita GDP growth and investigate the nature of their dependence on de facto/de jure mix of exchange rate policies. Our characterization of exchange rate policy measures whether a country's de facto policy is consistent with its publicly stated de jure exchange rate regime. Employing the Rogoff and Reinhart (2002) de facto classification we find the significant statistical relationship between exchange rate policy and growth which is robust to the inclusion of conventional growth control variables. Our nuanced characterization shows that the non-industrialized countries exhibiting `fear of floating,' have higher GDP growth. With respect to GDP volatility a division of policy into fixed versus floating exchange rates using the de facto/de jure metrics is significant and indicates that `fear of floating' is stabilizing for the non-industrialized but destabilizing for industrialized countries.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.