Despite their common past, the banking markets of the largest CIS countries differ significantly in many aspects: from their level of competition, structure, and transparency to the features of the regulatory environment, and the anticrisis measures of their regulators.
The Bank of Russia is taking over the administration of the RUONIA rate, a benchmark interest rate for Russia's monetary policy and public debt. This is a part of the global benchmark interest rate reform consequential to the global financial crisis.
Adherence to high standards of corporate governance in the banking sector can reinforce the resilience of the banking system. However, existing corporate governance practices do not help curb the risks banks take.
Bad debts can be both a consequence of the borrower’s reduced financial circumstances and an instrument of unfair banking. Each of these problems has its regulatory solution but the key principle should be market responsibility of the owners and managers.
A sound banking system, a moderate bad debt level, prompt recognition of the problem which bad debts pose and dealing with them effectively, are essential preconditions of not only financial stability and depositor protection but also of economic growth.