Restructuring / Turnaround Strategies Case Study

Russian Banks: A Crisis of Confidence?

Abstract:
Russia, with its abundant natural resources, was expected to emerge as an economic power after the liberalisation of its economy in the early 1990s. But within a decade, the country experienced a debilitating financial crisis, hyperinflation, currency devaluation and the near collapse of its banking system. Russia has recovered from its past problems to post strong growth figures. Once again expectations from the Russian economy have increased, but its banking sector remains a weak link. Banking sector reforms are considered crucial if the Russian economy is to achieve its potential.

Pedagogical Objectives:

• To discuss the low level of confidence private depositors have in Russian banks and among the banks themselves
• To discuss the various steps that the Central Bank of Russia could take to build confidence in the banking sector.

Keywords : Russian banking industry, Russian financial crisis of 1998, The Russian economy, Privatisation programme, Deficit financing, Currency devaluation, Investment & Banking Case Study, Russian banks, Banking reforms, Liquidity crisis, Sberbank, Sodbiznesbank, Money laundering, Corporate scandals, Russian oligarchs, Yukos