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December 2023 (published: 07.12.2023)
Number 4(55)
Home > Issue > About the mechanism for preventing the bankruptcy
of problem banks in Russia
Krolivetskaya V.E. , Maslovskaya E.O.
The objective of the article is to, on the basis of the current legislation «On Insolvency (Bankruptcy)» analyze and characterize the measures taken by banks, both independently and forcibly by authorized bodies, in relation to problem credit institutions experiencing serious financial difficulties, in order to prevent them bankruptcy. For this purpose, the following are considered: sanctions restrictions affecting the Russian economy, macroprudential policy instruments and regulatory easing in order to maintain financial stability and sustainability, international practice of applying financial recovery measures; the grounds for the application of specific measures, the measures (instruments) themselves, as well as sources of funds for the rehabilitation of banks and the financing mechanism through their measures to prevent bankruptcy and rehabilitate problem banks. Particular attention is paid to the mechanism for rehabilitating problem banks by the Bank of Russia itself through the Banking Sector Consolidation Fund. The purpose of the article is to identify the advantages and disadvantages of these measures, rehabilitation and financing mechanisms for credit institutions experiencing financial difficulties, by authorized bodies (Bank of Russia, Deposit Insurance Agency, Banking Sector Consolidation Fund), and also to propose an alternative mechanism. In connection with the introduction of sanctions aimed at various sectors of the Russian economy, including the banking sector, there is an increase in credit institutions experiencing a deterioration in their financial situation, and forced to subsequently face reorganization, and in the worst case, undergo liquidation and revocation of their license, which lies the relevance of the article.
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Keywords: financial recovery, macroprudential instruments, financial stability and financial sustainability, international practice, bank solvency, stability of the banking system, measures to prevent bank bankruptcy, mechanisms for reorganizing problem banks.
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
UDC 336.71:330.3
About the mechanism for preventing the bankruptcy
of problem banks in Russia
The objective of the article is to, on the basis of the current legislation «On Insolvency (Bankruptcy)» analyze and characterize the measures taken by banks, both independently and forcibly by authorized bodies, in relation to problem credit institutions experiencing serious financial difficulties, in order to prevent them bankruptcy. For this purpose, the following are considered: sanctions restrictions affecting the Russian economy, macroprudential policy instruments and regulatory easing in order to maintain financial stability and sustainability, international practice of applying financial recovery measures; the grounds for the application of specific measures, the measures (instruments) themselves, as well as sources of funds for the rehabilitation of banks and the financing mechanism through their measures to prevent bankruptcy and rehabilitate problem banks. Particular attention is paid to the mechanism for rehabilitating problem banks by the Bank of Russia itself through the Banking Sector Consolidation Fund. The purpose of the article is to identify the advantages and disadvantages of these measures, rehabilitation and financing mechanisms for credit institutions experiencing financial difficulties, by authorized bodies (Bank of Russia, Deposit Insurance Agency, Banking Sector Consolidation Fund), and also to propose an alternative mechanism. In connection with the introduction of sanctions aimed at various sectors of the Russian economy, including the banking sector, there is an increase in credit institutions experiencing a deterioration in their financial situation, and forced to subsequently face reorganization, and in the worst case, undergo liquidation and revocation of their license, which lies the relevance of the article.
Read the full article
Keywords: financial recovery, macroprudential instruments, financial stability and financial sustainability, international practice, bank solvency, stability of the banking system, measures to prevent bank bankruptcy, mechanisms for reorganizing problem banks.
DOI 10.17586/2310-1172-2023-16-4-141-152