Influence of economic sanctions on the modern situation in the banking system of Russia

Abstract

The paper reviews the financial sanctions’ impact on the situation in the Russian banking sector. Based on the Russian banks ’funding base structure change data and changes in the asset formation policy under the new conditions, it is demonstrated that the national banking system remains generally robust. An active process is underway to form the banks ’passive base, primarily on the basis of domestic savings. The sanctions have had a limited effect, they cause damage only inasmuch as they resonate with the negative impact of the imbalances accumulated in the economy. The negative features and problems which have accumulated in the banking system and are jeopardizing its ability to perform the functions of a financial intermediary at a level sufficient for the national economy, are domestic in nature. Active measures are required on the part of the Central Bank not only to stabilize the banking system but also to encourage banks to work with new tools, which shall become a new policy of the Bank - a policy to target the growth of the national economy.