Which banks do Russian households (dis-)trust more?
The objective of this paper is to find out which banks the Russian households trust more and whether they really prefer to keep their savings in the institutions that they verbally prefer. Russian households traditionally trust state-controlled banks and particularly the national champion (Sberbank) at the expense of privately-owned deposit-taking institutions. The gap in the level of trust between state-controlled banks and all others remains deep and unlikely to disappear. There is little hope in self-sustaining business of private banks that would rest on the inflow of private savings at reasonable rates. The policy implication of this finding is that the authorities will face the dilemma of ever increasing the level of private savings protection under the deposit insurance scheme (as well as the resulting public costs) in order to keep the smaller market participants afloat, or give up on the idealistic drive to artifically enhance competition in the household savings market.