We focus on the conflict between two central bank objectives - individual bank stability and systemic stability - and the regulatory forbearance that follows from it. We study the licensing policy of the Central Bank of Russia (CBR) during 1999-2002. Banks in highly concentrated bank markets,...

Supervisors sometimes have to manage both the micro- and macro-prudential dimensions of bank stability. These may either conflict or complement each other. We analyze prudential supervision by the Central Bank of Russia (CBR). We find evidence of micro-prudential concerns, measured as the...

Supervisors sometimes have to manage both the micro- and macro-prudential dimensions of bank stability. These may either conflict or complement each other. We analyze prudential supervision by the Central Bank of Russia (CBR). We find evidence of micro-prudential concerns, measured as the...

Supervisors sometimes have to manage both the micro- and macro- prudential dimensions of bank stability. These may either conflict or complement each other. We analyze prudential supervision by the Central Bank of Russia (CBR). We find evidence of micro-prudential concerns, measured as the...

We model how the reduction of required reserves and the introduction of capital rules affect bank risk-taking behaviour in a financially repressed environment. In the absence of capital rules, the reduction of required reserves unambiguously encourages gambling behaviour. The introduction of...

Creditors are often passive because they are reluctant to show bad debts on their own balance sheets. We propose a simple general equilibrium model to study the externality effect of creditor passivity. The model yields rich insights in the phenomenon of creditor passivity, both in transition...

We suggest an additional transmission channel of contagion on the interbank market - the liquidity channel. Examining the Russian banking sector, we and that the liquidity channel contributes significantly to understanding and predicting interbank market crises. Interbank market stability...