METHODOLOGY

Bank Regulation, supervision and control in Russia



Bank Regulation, supervision and control in Russia

Introduction

The International Monetary Fund (IMF) undertook a Financial Sector Assessment Program (FSAP) in 2002-2003 of Russia's observance of the Basel Core Principles (BCPs) for Effective Banking Supervision, and described its outcome in its 2003 Financial System Stability Assessment. At the time of the IMF's 2003 evaluation, it was documented that "the living regulatory scheme of the Russian banking part conforms, to a substantial span, to the [BCPs]" (p. 104), as described in a 2005 study on banking supervision in Russia by Michael Olsen, released by the European Central Bank. Nevertheless, prudential supervision and enforcement stayed feeble in the banking sector.

Research philosophy

According to the 2003 Financial System Stability Assessment (FSSA), legislative alterations and other efforts by the Russian administration had conveyed about advanced compliance in the banking sector. For demonstration, the lawful structure for banking supervision in Russia "had been enhanced and was amply appropriate" (p. 36). The report, although, documented that the lawful structure required farther improvements and, more significantly, there was insufficient implementation of these legislative changes.

Research approach

We use a lesser study method to find out the Bank Regulation, supervision and command scheme in Russia.

Findings

In 2006, the IMF's 2006 Article IV Consultation met improvements in the banking supervisory structure, but recognised residual flaws in the locality of attached lending, business governance, loan-loss provisioning, and the adoption of worldwide accounting standards. In 2007, the IMF undertook an revise of the 2003 evaluation, and described its outcome in the 2008 Article IV Consultation.

The 2007 Update was anticipated to be released in 2008, although, as of the time of this report in December 2008, the IMF had yet to release its 2007 FSAP Update. According to the 2008 Article IV Consultation report, the 2007 FSAP revise concludes that "Russia's ...