Financial Sanctions

Abstract

The article considers the impact of international sanctions on Russia's banking sector and economic policy. The author concludes that the effect of the sanctions on credit and deposit markets has been asymmetric. In particular, the increase of deposit interest rates has been more moderate, due to substantial weakening in the retail funding base since 2013 and the growing reliance of banks on the support of the Central Bank of Russia. The banking sector is beginning to show signs of a growing dependence on government banks, which may compromise the quality of economic growth.

Keywords::

• sanctions
• banking sector
• economic policy
• Central Bank of Russia

Keywords::

• G20
• E52

Notes

English translation © 2016 Taylor & Francis Group, LLC, from the Russian text © 2014 “Voprosy ekonomiki.” “Finansovye sanktsii protiv Rossii: vliianie na ekonomiku i ekonomicheskuiu politiku,” Voprosy ekonomiki, 2014, no. 12, pp. 56–66. Nataliya V. Orlova is a professor, chief economist, and head of the Alfa Bank Center for Macroeconomic Analysis (Moscow). Translated by Peter Golub.