Russian banking: A comeback of the state
The purpose of this paper is to assess the size of public sector within the Russian banking industry. We identify and classify at least 78 state-influenced banks. We distinguish between banks that are majority-owned by federal executive authorities or Central Bank of Russia, by sub-federal (regional and municipal) authorities, by state-owned enterprises and banks, and by "state corporations". We estimate their combined market share to have reached 56% of total assets by July 1, 2009. Banks indirectly owned by public capital are the fastest-growing group. Concentration is increasing within the public sector of the industry, with the top five state-controlled banking groups in possession of over 49% of assets. We observe a crowding out and erosion of domestic private capital, whose market share is shrinking from year to year. Several of the largest state-owned banks now constitute a de facto intermediate tier at the core of the banking system. We argue that the direction of ownership change in Russian banking is different from that in CEE countries.
Bank stabilization measures adopted by the Russian authorities since 2008 have benefited core state-owned financial institutions to a greater extent than other market participants. Public sector keeps swelling at the expense of domestic private sector. According to the author’s methodology, by January 2010 state-controlled banks possessed over 50 percent of all bank assets, thus putting Russia in the same league with China and India. Development banking and policy lending expand. A feature distinguishing Russia is gradual substitution of direct state control by indirect state ownership in the shape of corporate pyramids headed by state-owned enterprises and state-owned banks. We construct a dataset of bank-level statistical data for the period between 2001 and 2010 and find that quasi-private banks (indirectly state-owned banks) were the fastest growing subgroup. Nationalization and rehabilitation of failed banks was carried out by state-controlled banks and entities rather than by federal executive authorities directly. We suggest that the response of the Russian authorities to bank instability was consistent with long-term trends in the banking system evolution. Anti-crisis measures of 2008-9 re-aligned the sector with the traditional model of banking that rests upon dominant state-owned banks, directed lending, protectionism, administrative interference and elements of price controls. Increased government ownership of banks and control over lending activity are unlikely to be fully dismantled after the crisis is over. This scenario can nevertheless accommodate a tactical retreat of the state from non-core assets in the financial sector, leaving control over 3 largest institutions intact.
This paper uses the banking industry case to show that the boundaries of public property in Russia are blurred. A messy state withdrawal in 1990s left publicly funded assets beyond direct reach of official state bodies. While we identify no less than 50 state-owned banks in a broad sense, the federal government and regional authorities directly control just 4 and 12 institutions, respectively. 31 banks are indirectly state-owned, and their combined share of state-owned banks’ total assets grew from 11% to over a quarter between 2001 and 2010. The state continues to bear financial responsibility for indirectly owned banks, while it does not benefit properly from their activity through dividends nor capitalization nor policy lending. Such banks tend to act as quasi private institutions with weak corporate governance. Influential insiders (top-managers, current and former civil servants) and cronies extract their rent from control over financial flows and occasional appropriation of parts of bank equity.
The Working Paper examines the peculiarities of the Russian model of corporate governance and control in the banking sector. The study relies upon theoretical as well as applied research of corporate governance in Russian commercial banks featuring different forms of ownership. We focus on real interests of all stakeholders, namely bank and stock market regulators, bank owners, investors, top managers and other insiders. The Anglo-American concept of corporate governance, based on agency theory and implying outside investors’ control over banks through stock market, is found to bear limited relevance. We suggest some ways of overcoming the gap between formal institutions of governance and the real life.
This book is about twenty-year's experience of privatization in different countries including Russia. The book also includes sestematozation of academic views at the problems of state failures and effectiveness of the state owership.
This study guide on Business English is for the students of non-linguistic departments who study Business English. Structurally this study guide consists of several sections including a text on a given topic, a series of pre- and after-reading tasks, and also a range of vocabulary and grammar exercises. This book helps students work on the topic more profoundly either in class or all by themselves. Besides, It can be also useful to those studying Business English
Researchers of civil control are interested in public interest as legal category. Civil control is an observation, verification and appreciation in accordance with public interests by government. Civil control is exercised for the purpose defense and protection of the public interests.
In this paper the public-private wage gap is estimated by means both of the OLS and the quantile regression, which will provide a more complex picture of the distribution of the public-private sector wage gap. The author finds the existence of significant public-private wage gap (about 30%) considering both observable and unobservable characteristics of workers and jobs. Using the decomposition based on quantile regression helps to answer the question about the nature of the wage differences. The author comes to the conclusion that the main reason for the gap is the institutional mechanisms of public sector wages in Russia. The analysis is based on the data from Russian Longitudinal Monitoring Survey (RLMS-HSE) 2000-2010.
In the article the international experience of management of employment in the public sector is shown, corresponding numerical calculations are given, the thought on possibility of its use in Russia is stated. The author believes that transfer of some functions into outsourcing in frameworks of the policy of the new public management (NPM) can be one of directions of perfection of the management of employment efficiency and payment in the public sector. Simultaneously he expresses his conviction that reduction of the number of the occupied should not be mechanical, but the thought over and gradual process assuming simultaneous increase of efficiency of activity in the sphere of the public management.
The paper proposes a political and legal approach to conceptualizing modern democratic state as law-governed, social and secular. It defines legal, institutional, and socio-political characteristics of law-governed, social, and secular state.