The Russian banking sector has begun to recover, no thanks
to the government. With the economy continuing to grow strongly
there is more money about and confidence is slowly returning.
President Vladimir Putin may not have completed much in the way of
banking sector reform but he has delivered on stability.
With more money in the economy, and production and sales growing
strongly, the leading commercial banks have been capitalizing on
their head start and are pulling ahead of the field. By the start
of this year the total assets and capital of Russia's banks had
recovered to 80% and 67% of pre-crisis levels respectively, with
the top 300-odd banks doubling their capital over the same period.
Before the 1998 crisis, banking was almost exclusively
speculative; from betting against inflation, the banks moved on to
handling the government's money and then sovereign
T-bills, the GKOs. Following the...
