The Impact of a Central Bank’S Verbal Interventions on Stock Exchange Indices in a Resource Based Economy: The Evidence from Russia
The purpose of this article is to determine the influence of the portfolio structure on the stability of insurance companies’ activity. With this objective, we examined how the structure of insurance portfolio affects the risks of companies’ activity. The author has proved that if insurance companies focus on voluntary property insurance it increases the probability of revocation of their licenses. These results were derived from a binary logistic regression using 112 observations. Parameters of insurance portfolio, as well as regional macroeconomic indicators that reflect the operating environment of the insurance business were used as variables for the model. Indicators of the insurance portfolio include voluntary and compulsory insurance. In the course of the research, it was revealed that one of the possible directions of development of insurance market regulation may be the organization of the mechanism of supervision over insurance companies, which allows soft impact on the structure of insurance portfolios in order to increase the stability of insurers. The introduction of this approach in regulation will allow the Bank of Russia to stimulate the development of the insurance market. Based on the results of the presented study, the Bank of Russia may develop guidelines to determine the optimal structure of the insurance portfolio. These recommendations can be one of the means of the surveillance policy over insurance companies. The orientation of the insurance company to certain types of insurance determines the stability of its functioning. In this regard, the Bank of Russia should develop an early warning system for disrupting the smooth functioning of the insurance company due to an incorrect focus on certain types of insurance.
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.