Survival of Russian banks: how efficient are the control measures?

Purpose In this paper, the authors study the failure of Russian banks between 2012 and 2019. Design/methodology/approach The authors analyze the entire population of Russian banks and combine a logit model with the survival analysis. Findings In addition to the usual determinants, the authors find t...

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Bibliographic Details
Published inEuropean journal of management and business economics Vol. 32; no. 3; pp. 320 - 341
Main Authors Barajas, Angel, Krakovich, Victor, López-Iturriaga, Félix J.
Format Journal Article
LanguageEnglish
Published Madrid Emerald Group Publishing Limited 11.07.2023
Emerald Publishing
Subjects
Artificial intelligence
Bank failure prediction
Bank failures
Banking industry
Bankruptcy
Capital adequacy
Central banks
Discriminant analysis
Loans
Neural networks
Regression analysis
Regulation of financial institutions
Retail banking
Russia
Solvency
Stockholders
Survival analysis
Technology adoption
Thresholds
Writers
Russia
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Summary:Purpose In this paper, the authors study the failure of Russian banks between 2012 and 2019. Design/methodology/approach The authors analyze the entire population of Russian banks and combine a logit model with the survival analysis. Findings In addition to the usual determinants, the authors find that not-failed banks have higher levels of fulfillment of the Central Bank requirements of solvency, liquidity, provide fewer loans to their shareholders and own more shares of other banks. The results of this study suggest an asymmetric effect of the strategic orientation of banks: whereas the proportion of deposits from firms is negatively related to the probability of failure, the loans to firms are positively related to bankruptcies. According to this research, the fact of being controlled by a foreign bank has a significant negative relationship with the likelihood of failure and moderates the effect of bank size, performance and growth on the bankruptcy likelihood. Practical implications On the whole, the results of this study support the new Central Bank rules, but show that the thresholds imposed by the Russian regulator actually do not make a difference between failed and not failed banks in the short and medium term. Originality/value The authors specially focus on the effectiveness of new rules issued by the Central Bank of Russia in 2013.
ISSN:2444-8451
2444-8494
DOI:10.1108/EJMBE-12-2021-0329