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Journal of Financial Services Research

Erschienen in:

01.04.2008

Depositors’ Assessment of Bank Riskiness in the Russian Federation

verfasst von: Ece Ungan, Selçuk Caner, Süheyla Özyıldırım

Erschienen in: Journal of Financial Services Research | Ausgabe 2/2008

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Abstract

In the period after the crises in the late 1990s, the banking industries in most emerging markets have undergone significant restructuring consistent with the Basel II Accord. The Central Bank of Russia’s efforts since 2000 have contributed to the consolidation and improvement of the banking industry. To measure the extent of market discipline in the Russian banking industry, we study the reaction of Russian depositors to excessive risk taking by large banks between 2000:1 and 2005:1. We find that during our analysis period, well-capitalized, more liquid banks significantly increase their deposits.

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These authors provide evidence for market discipline by using all operating credit institutions’ data. Thus, the significance of their results varies by the subperiods chosen and types of depositors.

Similar to previous studies on market discipline (e.g., Martinez-Peria and Schmukler 2001 for Argentina, Chile, and Mexico; and Mondschean and Opiela (1999) for Poland) we use the average interest rate on deposits to test the reaction of the Russian depositors to banks’ risk-taking. Theoretically, marginal rates indicate the sensitivity of deposit rates to change in bank riskiness, but because marginal deposit rates are not available, we use implicit interest rates. However, since the majority of deposits are short-term in the Russian Federation, we argue that the difference would not be significant enough to alter results. Nevertheless, we note that to understand how deposit rates are determined in the Russian Federation, Peresetsky et al. (2006) use marginal interest rates for selected banks, and find results similar to those in our study.

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Titel: Depositors’ Assessment of Bank Riskiness in the Russian Federation
verfasst von: Ece Ungan
Selçuk Caner
Süheyla Özyıldırım
Publikationsdatum: 01.04.2008
Verlag: Springer US
Erschienen in: Journal of Financial Services Research / Ausgabe 2/2008
Print ISSN: 0920-8550
Elektronische ISSN: 1573-0735
DOI: https://doi.org/10.1007/s10693-007-0025-0