Financial backwardness in contemporary perspective: Prospects for the development of financial intermediation in Russia

Europe - Asia Studies

Volumn 52, Issue 4, 2000, Pages 605-625

  Tompson, William ^b  

^a UNIVERSITY OF LONDON   (United Kingdom)

^b NONE

Author keywords

[No Author keywords available]

Indexed keywords

BANKING; ECONOMIC GROWTH; FINANCIAL SYSTEM;

RUSSIAN FEDERATION;

EID: 0033940245     PISSN: 09668136     EISSN: None     Source Type: Journal    
DOI: 10.1080/713663076     Document Type: Article

References (173)

1. See, for examples, William Tompson, 'Old Habits Die Hard: Fiscal Imperatives, State Regulation and the Role of Russia's Banks', Europe-Asia Studies, 49, 7, November 1997, especially pp. 1176-1178; Joachim Bald & Jim Nielsen, 'Developing Efficient Financial Institutions in Russia', Communist Economies & Economic Transformation, 10, 1, March 1998, pp. 87-88; Pekka Sutela, 'The Role of Banks in Financing Russian Economic Growth', Post-Soviet Geography and Economics, 39, 2, 1998, pp. 111-119; and Anders Åslund, 'Russian Banking: Crisis or Rent-Seeking?', Post-Soviet Geography and Economics, 37, 8, October 1996, pp. 495-502. For a Russian view, see Nezavisimaya gazeta, 18 July 1996, p. 4. In this respect, it should be noted, Russian banks are not all that different from banks in a number of other transition economies.
2. See, for examples, William Tompson, 'Old Habits Die Hard: Fiscal Imperatives, State Regulation and the Role of Russia's Banks', Europe-Asia Studies, 49, 7, November 1997, especially pp. 1176-1178; Joachim Bald & Jim Nielsen, 'Developing Efficient Financial Institutions in Russia', Communist Economies & Economic Transformation, 10, 1, March 1998, pp. 87-88; Pekka Sutela, 'The Role of Banks in Financing Russian Economic Growth', Post-Soviet Geography and Economics, 39, 2, 1998, pp. 111-119; and Anders Åslund, 'Russian Banking: Crisis or Rent-Seeking?', Post-Soviet Geography and Economics, 37, 8, October 1996, pp. 495-502. For a Russian view, see Nezavisimaya gazeta, 18 July 1996, p. 4. In this respect, it should be noted, Russian banks are not all that different from banks in a number of other transition economies.
3. See, for examples, William Tompson, 'Old Habits Die Hard: Fiscal Imperatives, State Regulation and the Role of Russia's Banks', Europe-Asia Studies, 49, 7, November 1997, especially pp. 1176-1178; Joachim Bald & Jim Nielsen, 'Developing Efficient Financial Institutions in Russia', Communist Economies & Economic Transformation, 10, 1, March 1998, pp. 87-88; Pekka Sutela, 'The Role of Banks in Financing Russian Economic Growth', Post-Soviet Geography and Economics, 39, 2, 1998, pp. 111-119; and Anders Åslund, 'Russian Banking: Crisis or Rent-Seeking?', Post-Soviet Geography and Economics, 37, 8, October 1996, pp. 495-502. For a Russian view, see Nezavisimaya gazeta, 18 July 1996, p. 4. In this respect, it should be noted, Russian banks are not all that different from banks in a number of other transition economies.
4. See, for examples, William Tompson, 'Old Habits Die Hard: Fiscal Imperatives, State Regulation and the Role of Russia's Banks', Europe-Asia Studies, 49, 7, November 1997, especially pp. 1176-1178; Joachim Bald & Jim Nielsen, 'Developing Efficient Financial Institutions in Russia', Communist Economies & Economic Transformation, 10, 1, March 1998, pp. 87-88; Pekka Sutela, 'The Role of Banks in Financing Russian Economic Growth', Post-Soviet Geography and Economics, 39, 2, 1998, pp. 111-119; and Anders Åslund, 'Russian Banking: Crisis or Rent-Seeking?', Post-Soviet Geography and Economics, 37, 8, October 1996, pp. 495-502. For a Russian view, see Nezavisimaya gazeta, 18 July 1996, p. 4. In this respect, it should be noted, Russian banks are not all that different from banks in a number of other transition economies.
5. See, for examples, William Tompson, 'Old Habits Die Hard: Fiscal Imperatives, State Regulation and the Role of Russia's Banks', Europe-Asia Studies, 49, 7, November 1997, especially pp. 1176-1178; Joachim Bald & Jim Nielsen, 'Developing Efficient Financial Institutions in Russia', Communist Economies & Economic Transformation, 10, 1, March 1998, pp. 87-88; Pekka Sutela, 'The Role of Banks in Financing Russian Economic Growth', Post-Soviet Geography and Economics, 39, 2, 1998, pp. 111-119; and Anders Åslund, 'Russian Banking: Crisis or Rent-Seeking?', Post-Soviet Geography and Economics, 37, 8, October 1996, pp. 495-502. For a Russian view, see Nezavisimaya gazeta, 18 July 1996, p. 4. In this respect, it should be noted, Russian banks are not all that different from banks in a number of other transition economies.
6. Shelagh Heffernan, Modern Banking in Theory and Practice (London, John Wiley and Sons, 1996), chapter 1. It should, however, be noted that, in the Russian case, gaps in legislation meant that until 1995-96 any financial firm had to register as a bank; Kommersant"-Daily, 16 July 1996, p. 5.
7. Shelagh Heffernan, Modern Banking in Theory and Practice (London, John Wiley and Sons, 1996), chapter 1. It should, however, be noted that, in the Russian case, gaps in legislation meant that until 1995-96 any financial firm had to register as a bank; Kommersant"-Daily, 16 July 1996, p. 5.
8. The question of just how much Russian households save remains controversial. For a look at the various estimates of household savings in Russia and the problems they present, see Sutela, 'The Role ...', pp. 105-108; William Tompson, 'Russia's "Ministry of Cash": Sberbank in Transition', Communist Economies & Economic Transformation, 10, 2, June 1998, pp. 146-147.
9. The question of just how much Russian households save remains controversial. For a look at the various estimates of household savings in Russia and the problems they present, see Sutela, 'The Role ...', pp. 105-108; William Tompson, 'Russia's "Ministry of Cash": Sberbank in Transition', Communist Economies & Economic Transformation, 10, 2, June 1998, pp. 146-147.
10. The foreign share in the sector's total capital is still limited by law to 12%, a ceiling foreign participants in the sector have never come close to breaching.
11. For various views on the type of financial system former centrally planned economies (CPEs) should adopt, see Daniel Gros & Alfred Steinherr, Winds of Change: Economic Transition in Central and Eastern Europe (London, Longman, 1995), chapter 9; Jenny Corbett & Colin Mayer, 'Financial Reform in Eastern Europe: Progress with the Wrong Model', Oxford Review of Economic Policy, 7, 4, Winter 1991, pp. 57-75; Ken Mayhew & Paul Seabright, 'Incentives and the Management of Enterprises in Economic Transition: Capital Markets are Not Enough', Oxford Review of Economic Policy, 8, 1, Spring 1992, pp. 105-129; Masahiko Aoki, 'Controlling Insider Control: Issues of Corporate Governance in Transition Economies', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 3-29; John Litwack, 'Corporate Governance, Banks and Fiscal Reform in Russia', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 99-120; and Peter Dittus & Stephen Prowse, 'Corporate Control in Central Europe and Russia: Should Banks Own Shares?', in Roman Frydman, Cheryl Gray & Andrzej Rapaczynski (eds), Corporate Governance in Central Europe and Russia, vol. 1 (Budapest, CEU Press, 1996), pp. 20-67.
12. For various views on the type of financial system former centrally planned economies (CPEs) should adopt, see Daniel Gros & Alfred Steinherr, Winds of Change: Economic Transition in Central and Eastern Europe (London, Longman, 1995), chapter 9; Jenny Corbett & Colin Mayer, 'Financial Reform in Eastern Europe: Progress with the Wrong Model', Oxford Review of Economic Policy, 7, 4, Winter 1991, pp. 57-75; Ken Mayhew & Paul Seabright, 'Incentives and the Management of Enterprises in Economic Transition: Capital Markets are Not Enough', Oxford Review of Economic Policy, 8, 1, Spring 1992, pp. 105-129; Masahiko Aoki, 'Controlling Insider Control: Issues of Corporate Governance in Transition Economies', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 3-29; John Litwack, 'Corporate Governance, Banks and Fiscal Reform in Russia', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 99-120; and Peter Dittus & Stephen Prowse, 'Corporate Control in Central Europe and Russia: Should Banks Own Shares?', in Roman Frydman, Cheryl Gray & Andrzej Rapaczynski (eds), Corporate Governance in Central Europe and Russia, vol. 1 (Budapest, CEU Press, 1996), pp. 20-67.
13. For various views on the type of financial system former centrally planned economies (CPEs) should adopt, see Daniel Gros & Alfred Steinherr, Winds of Change: Economic Transition in Central and Eastern Europe (London, Longman, 1995), chapter 9; Jenny Corbett & Colin Mayer, 'Financial Reform in Eastern Europe: Progress with the Wrong Model', Oxford Review of Economic Policy, 7, 4, Winter 1991, pp. 57-75; Ken Mayhew & Paul Seabright, 'Incentives and the Management of Enterprises in Economic Transition: Capital Markets are Not Enough', Oxford Review of Economic Policy, 8, 1, Spring 1992, pp. 105-129; Masahiko Aoki, 'Controlling Insider Control: Issues of Corporate Governance in Transition Economies', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 3-29; John Litwack, 'Corporate Governance, Banks and Fiscal Reform in Russia', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 99-120; and Peter Dittus & Stephen Prowse, 'Corporate Control in Central Europe and Russia: Should Banks Own Shares?', in Roman Frydman, Cheryl Gray & Andrzej Rapaczynski (eds), Corporate Governance in Central Europe and Russia, vol. 1 (Budapest, CEU Press, 1996), pp. 20-67.
14. For various views on the type of financial system former centrally planned economies (CPEs) should adopt, see Daniel Gros & Alfred Steinherr, Winds of Change: Economic Transition in Central and Eastern Europe (London, Longman, 1995), chapter 9; Jenny Corbett & Colin Mayer, 'Financial Reform in Eastern Europe: Progress with the Wrong Model', Oxford Review of Economic Policy, 7, 4, Winter 1991, pp. 57-75; Ken Mayhew & Paul Seabright, 'Incentives and the Management of Enterprises in Economic Transition: Capital Markets are Not Enough', Oxford Review of Economic Policy, 8, 1, Spring 1992, pp. 105-129; Masahiko Aoki, 'Controlling Insider Control: Issues of Corporate Governance in Transition Economies', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 3-29; John Litwack, 'Corporate Governance, Banks and Fiscal Reform in Russia', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 99-120; and Peter Dittus & Stephen Prowse, 'Corporate Control in Central Europe and Russia: Should Banks Own Shares?', in Roman Frydman, Cheryl Gray & Andrzej Rapaczynski (eds), Corporate Governance in Central Europe and Russia, vol. 1 (Budapest, CEU Press, 1996), pp. 20-67.
15. For various views on the type of financial system former centrally planned economies (CPEs) should adopt, see Daniel Gros & Alfred Steinherr, Winds of Change: Economic Transition in Central and Eastern Europe (London, Longman, 1995), chapter 9; Jenny Corbett & Colin Mayer, 'Financial Reform in Eastern Europe: Progress with the Wrong Model', Oxford Review of Economic Policy, 7, 4, Winter 1991, pp. 57-75; Ken Mayhew & Paul Seabright, 'Incentives and the Management of Enterprises in Economic Transition: Capital Markets are Not Enough', Oxford Review of Economic Policy, 8, 1, Spring 1992, pp. 105-129; Masahiko Aoki, 'Controlling Insider Control: Issues of Corporate Governance in Transition Economies', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 3-29; John Litwack, 'Corporate Governance, Banks and Fiscal Reform in Russia', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 99-120; and Peter Dittus & Stephen Prowse, 'Corporate Control in Central Europe and Russia: Should Banks Own Shares?', in Roman Frydman, Cheryl Gray & Andrzej Rapaczynski (eds), Corporate Governance in Central Europe and Russia, vol. 1 (Budapest, CEU Press, 1996), pp. 20-67.
16. For various views on the type of financial system former centrally planned economies (CPEs) should adopt, see Daniel Gros & Alfred Steinherr, Winds of Change: Economic Transition in Central and Eastern Europe (London, Longman, 1995), chapter 9; Jenny Corbett & Colin Mayer, 'Financial Reform in Eastern Europe: Progress with the Wrong Model', Oxford Review of Economic Policy, 7, 4, Winter 1991, pp. 57-75; Ken Mayhew & Paul Seabright, 'Incentives and the Management of Enterprises in Economic Transition: Capital Markets are Not Enough', Oxford Review of Economic Policy, 8, 1, Spring 1992, pp. 105-129; Masahiko Aoki, 'Controlling Insider Control: Issues of Corporate Governance in Transition Economies', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 3-29; John Litwack, 'Corporate Governance, Banks and Fiscal Reform in Russia', in M. Aoki & H-K. Kim (eds), Corporate Governance in Transitional Economies (Washington, The World Bank, 1995), pp. 99-120; and Peter Dittus & Stephen Prowse, 'Corporate Control in Central Europe and Russia: Should Banks Own Shares?', in Roman Frydman, Cheryl Gray & Andrzej Rapaczynski (eds), Corporate Governance in Central Europe and Russia, vol. 1 (Budapest, CEU Press, 1996), pp. 20-67.
17. There is, however, much to be said for the argument that banking must precede financial market development, and that the development of the banking system takes priority, at least temporally, over the development of capital markets. See Gros & Steinherr, p. 212.
18. Heffernan, pp. 17-18.
19. Ross Levine, 'Financial Development and Economic Growth: Views and Agenda', Journal of Economic Literature, 35,2, June 1997, p. 690. Financial systems in centrally planned economies were, of course, chronically underdeveloped, because the role of money was passive and transaction costs (as well as most other costs) were largely ignored.
20. Levine, p. 692. Liquidity is the speed with which agents can convert assets into purchasing power at agreed prices; liquidity risk arises as a result of uncertainty about whether and how fast agents can convert their claims on other agents into a medium of exchange.
21. Hefferman, pp. 19-20.
22. D.W. Diamond, 'Financial Intermediation and Delegated Monitoring', Review of Economic Studies, 51, 2, 1984, pp. 393-414.
23. E.F. Fama, 'What's Different about Banks?', Journal of Economics, 15, 1, 1985, pp. 29-39. At national level, the IMF performs a similar function. The conclusion of an IMF deal often unlocks funds from other sources and has a favourable impact on investor sentiment in general.
24. Levine, pp. 691-694.
25. Heffernan, pp. 15, 20.
26. See William Tompson, 'The Future of the Russian Banking System: Liquidation or Mergers?', in Graeme Herd (ed.), Russia in Crisis (Conflict Studies Research Centre E1O1, November 1998); and William Tompson, 'The Bank of Russia and the 1998 Rouble Crisis', in Vladimir Tikhomirov (ed.), Anatomy of the 1998 Russian Crisis (Melbourne, CERC, 1999).
27. See William Tompson, 'The Future of the Russian Banking System: Liquidation or Mergers?', in Graeme Herd (ed.), Russia in Crisis (Conflict Studies Research Centre E1O1, November 1998); and William Tompson, 'The Bank of Russia and the 1998 Rouble Crisis', in Vladimir Tikhomirov (ed.), Anatomy of the 1998 Russian Crisis (Melbourne, CERC, 1999).
28. Levine, pp. 696-697.
29. Levine, p. 699.
30. Levine, pp. 688-689.
31. Joseph Schumpeter, The Theory of Economic Development, translated by Opie Redvers (Cambridge, Harvard University Press, 1934).
32. John Hicks, A Theory of Economic History (Oxford, Clarendon Press, 1969).
33. Levine, p. 688; for examples, see Robert Lucas, 'On the Mechanics of Economic Development', Journal of Monetary Economics, 22, 1, July 1988, pp. 3-42, especially at p. 6; Nicholas Stern, 'The Economics of Development: A Survey', Economic Journal, 99(397), September 1989, pp. 597-685; and Gerald Meier & Dudley Seers, Pioneers in Development (Oxford, Oxford University Press, 1984).
34. Levine, p. 688; for examples, see Robert Lucas, 'On the Mechanics of Economic Development', Journal of Monetary Economics, 22, 1, July 1988, pp. 3-42, especially at p. 6; Nicholas Stern, 'The Economics of Development: A Survey', Economic Journal, 99(397), September 1989, pp. 597-685; and Gerald Meier & Dudley Seers, Pioneers in Development (Oxford, Oxford University Press, 1984).
35. Levine, p. 688; for examples, see Robert Lucas, 'On the Mechanics of Economic Development', Journal of Monetary Economics, 22, 1, July 1988, pp. 3-42, especially at p. 6; Nicholas Stern, 'The Economics of Development: A Survey', Economic Journal, 99(397), September 1989, pp. 597-685; and Gerald Meier & Dudley Seers, Pioneers in Development (Oxford, Oxford University Press, 1984).
36. Joan Robinson, 'The Generalization of the General Theory', in Joan Robinson, The Rate of Interest, and Other Essays (London, Macmillan, 1952), p. 86. Robinson's phrase has a CPE equivalent, familiar to many students of the Soviet economy: the claim that 'finance follows the plan'.
37. Levine, p. 688.
38. For detailed descriptions of the variables in question, see Levine, pp. 704-705. The underlying study on which he draws is Robert G. King & Ross Levine, 'Financial Intermediation and Economic Development', in Colin Mayer & Xavier Vives (eds), Financial Intermediation in the Construction of Europe (London, CEPR, 1993), pp. 156-189. The study covers the years 1960-89 inclusive.
39. Levine, p. 691.
40. Sutela, pp. 97-98; among the handicaps he notes are large resource endowments, high levels of government consumption, weak rule of law, institutions that favour rent seeking over entrepreneurship, a tradition of high inflation and large income differentials.
41. Sutela, 'The Role ...', p. 99.
42. Tuomas Komulainen, The Challenge of Restructuring Russian Banks', Russian Economy: The Month in Review, 1999, 2, p. 4; Tompson, 'Old Habits ...', pp. 1176-1177; Shelagh Heffernan, Modern Banking in Theory and Practice (London, 1996), pp. 44-45.
43. Tuomas Komulainen, The Challenge of Restructuring Russian Banks', Russian Economy: The Month in Review, 1999, 2, p. 4; Tompson, 'Old Habits ...', pp. 1176-1177; Shelagh Heffernan, Modern Banking in Theory and Practice (London, 1996), pp. 44-45.
44. Tuomas Komulainen, The Challenge of Restructuring Russian Banks', Russian Economy: The Month in Review, 1999, 2, p. 4; Tompson, 'Old Habits ...', pp. 1176-1177; Shelagh Heffernan, Modern Banking in Theory and Practice (London, 1996), pp. 44-45.
45. Russian banks typically lend for periods of three to six months, with credits extended for 12 months or more generally accounting for well under 10% of total lending. Tompson, 'Old Habits ...', pp. 1177-1178; Finansovye izvestiya, 26 November 1996.
46. Sutela, 'The Role ...', pp. 100-105.
47. Pekka Sutela, The Road to the Russian Market Economy (Helsinki, Kikkimora, 1998), p. 4.
48. See Clifford Gaddy & Barry W. Ickes, 'An Accounting Model of the Virtual Economy in Russia', Post-Soviet Geography and Economics, 40, 2, March 1999, pp. 95-97; Richard E. Ericson, 'Economics and the Russian Transition', Slavic Review, 57, 3, Fall 1998, p. 622; and Richard E. Ericson, 'The Russian Economy Since Independence', in Gail Lapidus (ed.), The New Russia: Troubled Transformation (Boulder, Westview, 1995), p. 63.
49. See Clifford Gaddy & Barry W. Ickes, 'An Accounting Model of the Virtual Economy in Russia', Post-Soviet Geography and Economics, 40, 2, March 1999, pp. 95-97; Richard E. Ericson, 'Economics and the Russian Transition', Slavic Review, 57, 3, Fall 1998, p. 622; and Richard E. Ericson, 'The Russian Economy Since Independence', in Gail Lapidus (ed.), The New Russia: Troubled Transformation (Boulder, Westview, 1995), p. 63.
50. See Clifford Gaddy & Barry W. Ickes, 'An Accounting Model of the Virtual Economy in Russia', Post-Soviet Geography and Economics, 40, 2, March 1999, pp. 95-97; Richard E. Ericson, 'Economics and the Russian Transition', Slavic Review, 57, 3, Fall 1998, p. 622; and Richard E. Ericson, 'The Russian Economy Since Independence', in Gail Lapidus (ed.), The New Russia: Troubled Transformation (Boulder, Westview, 1995), p. 63.
51. Sutela, 'The Role .. ', pp. 107, 120.
52. Russian Economic Trends, 8, 1, 1999, p. 84.
53. Commercial bank predominance in domestic credit allocation and the private sector share of domestic credit.
54. Levine, p. 705.
55. Reliance on non-monetary exchange appears to have fallen somewhat after August 1998, but the surveys conducted under the auspices of the Russian Economic Barometer continue to show over 40% of industrial sales being settled via barter. Russian Economic Barometer, 8, 2, Spring 1999, p. 76. For the most comprehensive discussion of the causes of non-monetary exchange available, see David Woodruff, Money Unmade: Barter and the Fate of Russian Capitalism (Ithaca, Cornell University Press, 1999). See also William Tompson, 'The Price of Everything and the Value of Nothing? Unravelling the Consequences of Russia's "Virtual Economy" ', Economy & Society, 29, 2, May 1999; and Petr A. Karpov, 'O prichinakh nizkoi sobiraemosti nalogov (neplatezhei fiskal'noi sisteme), obshchikh prichinakh "krizisa neplatezhei" i vozmozhnosti vosstanovleniya platezhesposobnosti rossiiskikh predpriyatii: otchet Mezhvedomstvennoi balansovoi kommissii', Moscow: unpublished report, December 1997.
56. Reliance on non-monetary exchange appears to have fallen somewhat after August 1998, but the surveys conducted under the auspices of the Russian Economic Barometer continue to show over 40% of industrial sales being settled via barter. Russian Economic Barometer, 8, 2, Spring 1999, p. 76. For the most comprehensive discussion of the causes of non-monetary exchange available, see David Woodruff, Money Unmade: Barter and the Fate of Russian Capitalism (Ithaca, Cornell University Press, 1999). See also William Tompson, 'The Price of Everything and the Value of Nothing? Unravelling the Consequences of Russia's "Virtual Economy" ', Economy & Society, 29, 2, May 1999; and Petr A. Karpov, 'O prichinakh nizkoi sobiraemosti nalogov (neplatezhei fiskal'noi sisteme), obshchikh prichinakh "krizisa neplatezhei" i vozmozhnosti vosstanovleniya platezhesposobnosti rossiiskikh predpriyatii: otchet Mezhvedomstvennoi balansovoi kommissii', Moscow: unpublished report, December 1997.
57. Reliance on non-monetary exchange appears to have fallen somewhat after August 1998, but the surveys conducted under the auspices of the Russian Economic Barometer continue to show over 40% of industrial sales being settled via barter. Russian Economic Barometer, 8, 2, Spring 1999, p. 76. For the most comprehensive discussion of the causes of non-monetary exchange available, see David Woodruff, Money Unmade: Barter and the Fate of Russian Capitalism (Ithaca, Cornell University Press, 1999). See also William Tompson, 'The Price of Everything and the Value of Nothing? Unravelling the Consequences of Russia's "Virtual Economy" ', Economy & Society, 29, 2, May 1999; and Petr A. Karpov, 'O prichinakh nizkoi sobiraemosti nalogov (neplatezhei fiskal'noi sisteme), obshchikh prichinakh "krizisa neplatezhei" i vozmozhnosti vosstanovleniya platezhesposobnosti rossiiskikh predpriyatii: otchet Mezhvedomstvennoi balansovoi kommissii', Moscow: unpublished report, December 1997.
58. Reliance on non-monetary exchange appears to have fallen somewhat after August 1998, but the surveys conducted under the auspices of the Russian Economic Barometer continue to show over 40% of industrial sales being settled via barter. Russian Economic Barometer, 8, 2, Spring 1999, p. 76. For the most comprehensive discussion of the causes of non-monetary exchange available, see David Woodruff, Money Unmade: Barter and the Fate of Russian Capitalism (Ithaca, Cornell University Press, 1999). See also William Tompson, 'The Price of Everything and the Value of Nothing? Unravelling the Consequences of Russia's "Virtual Economy" ', Economy & Society, 29, 2, May 1999; and Petr A. Karpov, 'O prichinakh nizkoi sobiraemosti nalogov (neplatezhei fiskal'noi sisteme), obshchikh prichinakh "krizisa neplatezhei" i vozmozhnosti vosstanovleniya platezhesposobnosti rossiiskikh predpriyatii: otchet Mezhvedomstvennoi balansovoi kommissii', Moscow: unpublished report, December 1997.
59. Russian Economic Trends Monthly Update, August 1999, Table 7; and TsBR data (see note 37). Total (commercial and central bank) domestic credit in the financial system at the end of May 1999 amounted to Rb1518.4 billion, not much more than total overdue payables.
60. For a discussion of the politics of credit allocation after the collapse, see William Tompson, 'Nothing Learned, Nothing Forgotten: Restructuring without Reform in Russia's Banking Sector', paper delivered at the conference on 'Shaping the Economic Space in Russia: Decision Making Processes, Institutions and Adjustment to Change', Bundesinstitut für ostwissenschaftliche und internationale Studien, Cologne, 26-28 May 1999.
61. Profil', 22 February 1999.
62. Delovoi Peterburg, 22 February 1999; Kommersant"-Daily, 8 April 1999; RIA-Novosti, 14 April 1999. These figures exclude Sberbank.
63. Delovoi Peterburg, 22 February 1999; Kommersant"-Daily, 8 April 1999; RIA-Novosti, 14 April 1999. These figures exclude Sberbank.
64. Agentstvo Rosbizneskonsalting, 14 April 1999.
65. United Financial Group, Russia Morning Comment, 27 April, 1999, p. 7.
66. Segodnya, 11 January 1999.
67. The full composition of this sum is not wholly clear, but the TsBR balance sheet shows that its claims on the federal government to amount to at least Rb372.8 billion, comprising government securities held by the TsBR (excluding repo operations) and credits to the government for external debt servicing.
68. Author's calculations based on TsBR data taken from the bank's web site: http://www.cbr.ru/dp/ komb_98.htm and/Komb_99.htm, and from http://www.cbr.ru/dp/Denvl_98.htm and/Denvl_99.htm.
69. United Financial Group, Russia Morning Comment, 7 October 1999, p. 8.
70. 'The Rouble and the Banking System', Russian Economic Trends Monthly Update, May 1998, p. 6.
71. I am grateful to Professor Philip Hanson for drawing this point to my attention.
72. It is worth noting in this context that, in Russian political discourse, the term 'real sector' frequently applies not to the whole of the non-financial sector but specifically to the sphere of 'material production' - i.e. industry.
73. Jacek Rostowski, 'Introduction', in Jacek Rostowski (ed.), Banking Reform in Central Europe and the Former Soviet Union (Budapest, CEU Press, 1995), p. 13.
74. John Maynard Keynes, The Economic Consequences of the Peace (London, Macmillan, 1920), p. 220 (emphasis added).
75. On the implications of doubts about stabilisation for firm behaviour, see Barry W. Ickes, Peter Murrell & Randi Ryterman, 'End of the Tunnel? The Effects of Financial Stabilization in Russia', Post-Soviet Affairs, 13, 2, April-June 1997, pp. 105-133.
76. Andrei Yakovlev, 'Mutual Dependence of Barter, Arrears and Tax Evasion in the Russian Economy', mimeo: Higher School of Economics, Moscow, 1999. It is worth noting that enterprises' transaction account balances rose by over 80% in the last five months of 1998, far faster than PPI inflation. This reflected the fact that, with the collapse of the government paper market and the restrictions imposed on the forex market, the firms had nothing else to do with their money.
77. Michael McFaul, 'When Capitalism and Democracy Collide in Transition: Russia's "Weak" State as an Impediment to Democratic Consolidation', Working Paper No. 1, Program in New Approaches to Russian Security, Cambridge, MA, Harvard Russian Research Center, 1997.
78. This theme is developed at length in Ickes, Murrell & Ryterman.
79. The balances in banks' correspondent accounts with the TsBR grew from around Rb9-10 billion in early August 1998 to Rb28-30 billion in the spring of 1999, despite the fact that the real interest rate on such funds was negative. Despite three cuts in mandatory reserve requirements, reserves as a proportion of total assets rose in the first half of 1999 from about 7.6% to 11.0%.
80. RIA-Novosti, 1 April 1999; Delovoi Peterburg, 19 April 1999. The proportion of bad debts in bank portfolios also rose markedly.
81. RIA-Novosti, 1 April 1999; Delovoi Peterburg, 19 April 1999. The proportion of bad debts in bank portfolios also rose markedly.
82. Oliver Prill, Financial Sector Reform in the Soviet Union/Russia since 1987: Options and Consequences, DPhil Thesis, University of Oxford, 1995, pp. 165-166.
83. The efficient functioning of the financial system depends on the availability of good enterprise-specific financial information, but the massive chains of non-payments can render any serious assessment of an enterprise's viability impossible. See Barry W. Ickes & Randi Ryterman, 'The Interenterprise Arrears Crisis in Russia', Post-Soviet Affairs, 8, 4, 1992, pp. 333-336; Barry W. Ickes & Randi Ryterman, 'Roadblock to Economic Reform: Inter-Enterprise Debt and the Transition to Markets', Post-Soviet Affairs, 9, 3, 1993, p. 233.
84. The efficient functioning of the financial system depends on the availability of good enterprise-specific financial information, but the massive chains of non-payments can render any serious assessment of an enterprise's viability impossible. See Barry W. Ickes & Randi Ryterman, 'The Interenterprise Arrears Crisis in Russia', Post-Soviet Affairs, 8, 4, 1992, pp. 333-336; Barry W. Ickes & Randi Ryterman, 'Roadblock to Economic Reform: Inter-Enterprise Debt and the Transition to Markets', Post-Soviet Affairs, 9, 3, 1993, p. 233.
85. Aleksandr Khandruyev, 'Kreditnaya politika i nalogovye perspektivy', Ekonomika i zhizn', 1996, 49, p. 3. This is as true of Russian banks and the Russian state as of industrial firms. One commentator has suggested that the determination not to pay debts, as one of the few things which unites almost all Russians, could be critical in the resolution of Russians' search for a new 'national idea'. Kommersant"-Daily, 22 April 1999.
86. Aleksandr Khandruyev, 'Kreditnaya politika i nalogovye perspektivy', Ekonomika i zhizn', 1996, 49, p. 3. This is as true of Russian banks and the Russian state as of industrial firms. One commentator has suggested that the determination not to pay debts, as one of the few things which unites almost all Russians, could be critical in the resolution of Russians' search for a new 'national idea'. Kommersant"-Daily, 22 April 1999.
87. Ronald W. Anderson & Chantal Kegels, Transition Banking: Financial Development of Central and Eastern Europe (Oxford, Clarendon Press, 1998), pp. 4-5. Anderson & Kegels also address a sixth requirement, establishing investors' control rights, but this concerns equity investment rather than intermediation.
88. For an excellent study of enterprise survival strategies based on 'relational capital' and the avoidance of market disciplines, see Clifford Gaddy & Barry W. Ickes. 'To Restructure or Not to Restructure: Informal Activities and Enterprise Behavior in Transition', Washington: mimeo, May 1998.
89. TsBR handling of post-crisis bail-outs is discussed at some length in Tompson, 'The Bank of Russia and the 1998 Rouble Crisis' and 'Nothing Learned, Nothing Forgotten'.
90. Anderson & Kegels, p. 4.
91. Tompson, 'Old Habits ...', pp. 1170-1176.
92. This is the view taken by Koshkareva & Narzikulov; Nezavisimaya gazeta, 18 July 1996, p. 4. For a Western view, see Joel Hellman, 'Russia Adjusts to stability', Transition, 17 May 1996, pp. 6-10.
93. This is the view taken by Koshkareva & Narzikulov; Nezavisimaya gazeta, 18 July 1996, p. 4. For a Western view, see Joel Hellman, 'Russia Adjusts to stability', Transition, 17 May 1996, pp. 6-10.
94. Finansovye izvestiya, 26 November 1996, pp. II-III.
95. See Delovoi mir, 9 July 1997 and Ekspert, 6 October 1997.
96. See Delovoi mir, 9 July 1997 and Ekspert, 6 October 1997.
97. See, for examples, Samarskoe obozrenie, 25 March and 4 November 1996; Delovoi Peterburg, 28 March 1997; Delovoi mir, 28 May 1997. On Mayor Luzhkov's extension of control over Moscow's banking system, see Nikita Kirichenko & Aleksandr Ivanter, 'Moskva', Ekspert, 23 March 1998, p. 30; Segodnya, 24 March 1998.
98. See, for examples, Samarskoe obozrenie, 25 March and 4 November 1996; Delovoi Peterburg, 28 March 1997; Delovoi mir, 28 May 1997. On Mayor Luzhkov's extension of control over Moscow's banking system, see Nikita Kirichenko & Aleksandr Ivanter, 'Moskva', Ekspert, 23 March 1998, p. 30; Segodnya, 24 March 1998.
99. See, for examples, Samarskoe obozrenie, 25 March and 4 November 1996; Delovoi Peterburg, 28 March 1997; Delovoi mir, 28 May 1997. On Mayor Luzhkov's extension of control over Moscow's banking system, see Nikita Kirichenko & Aleksandr Ivanter, 'Moskva', Ekspert, 23 March 1998, p. 30; Segodnya, 24 March 1998.
100. See, for examples, Samarskoe obozrenie, 25 March and 4 November 1996; Delovoi Peterburg, 28 March 1997; Delovoi mir, 28 May 1997. On Mayor Luzhkov's extension of control over Moscow's banking system, see Nikita Kirichenko & Aleksandr Ivanter, 'Moskva', Ekspert, 23 March 1998, p. 30; Segodnya, 24 March 1998.
101. See, for examples, Samarskoe obozrenie, 25 March and 4 November 1996; Delovoi Peterburg, 28 March 1997; Delovoi mir, 28 May 1997. On Mayor Luzhkov's extension of control over Moscow's banking system, see Nikita Kirichenko & Aleksandr Ivanter, 'Moskva', Ekspert, 23 March 1998, p. 30; Segodnya, 24 March 1998.
102. The letter is undated but the text indicates that it was written prior to final adoption of the law on the bankruptcy of credit organisations, which occurred on 18 February. It was published by Kommersant"-Daily on 19 March 1999. The letter appears to reflect the TsBR's settled position, as the points made in it have since been repeated by TsBR officials in speeches, press briefings and interviews (for examples, see Segodnya, 2 April 1999; and Kommersant"-Daily, 2 April 1999).
103. The letter is undated but the text indicates that it was written prior to final adoption of the law on the bankruptcy of credit organisations, which occurred on 18 February. It was published by Kommersant"-Daily on 19 March 1999. The letter appears to reflect the TsBR's settled position, as the points made in it have since been repeated by TsBR officials in speeches, press briefings and interviews (for examples, see Segodnya, 2 April 1999; and Kommersant"-Daily, 2 April 1999).
104. The letter is undated but the text indicates that it was written prior to final adoption of the law on the bankruptcy of credit organisations, which occurred on 18 February. It was published by Kommersant"-Daily on 19 March 1999. The letter appears to reflect the TsBR's settled position, as the points made in it have since been repeated by TsBR officials in speeches, press briefings and interviews (for examples, see Segodnya, 2 April 1999; and Kommersant"-Daily, 2 April 1999).
105. Goncharov, p. 4; Izvestiya, 6 November 1998; Petr Rushailo, 'TsB raionnogo masshtaba', Kommersant" VLAST', 3 November 1998, pp. 26-27; and Finansovaya Rossiya, 18 February 1999.
106. Goncharov, p. 4; Izvestiya, 6 November 1998; Petr Rushailo, 'TsB raionnogo masshtaba', Kommersant" VLAST', 3 November 1998, pp. 26-27; and Finansovaya Rossiya, 18 February 1999.
107. Goncharov, p. 4; Izvestiya, 6 November 1998; Petr Rushailo, 'TsB raionnogo masshtaba', Kommersant" VLAST', 3 November 1998, pp. 26-27; and Finansovaya Rossiya, 18 February 1999.
108. Delovoi Peterburg, 22 February 1999.
109. Belorusskaya delovaya gazeta, 13 October 1997. The numbers here refer to credit institutions actually operating; the number registered at any given time is significantly higher.
110. Over 30 were assassinated in 1993, 16 more in 1994 and 46 in the first eight months of 1995; see Oxford Analytica East Europe Daily Brief, 22 December 1993 and 31 August 1995; and Prill, p. 89.
111. Sberbank's position is examined in detail in Tompson, 'Russia's "Ministry of Cash" '. The government's reliance on Sberbank to roll over the GKO debt increased in the run-up to the crisis, and Sberbank has also lent substantially to the government since the financial collapse.
112. This tendency has been particularly pronounced - and controversial - in Moscow and St Petersburg. In the latter case, the banking lobby did successfully check some moves by the administration to grant a privileged status to one of their number; see Delovoi Peterburg, 28 March 1997; Nevskoe vremya, 28 March 1997; and Kommersant"-Daily, 28 and 29 March 1997. On Luzhkov's creation of a municipal 'superbank' in Moscow, see Kommersant"-Daily, 13 August 1997. See also Kommersant"-Daily, 28 February 1997, on the concentration of budgetary funds in Novosibirsk.
113. This tendency has been particularly pronounced - and controversial - in Moscow and St Petersburg. In the latter case, the banking lobby did successfully check some moves by the administration to grant a privileged status to one of their number; see Delovoi Peterburg, 28 March 1997; Nevskoe vremya, 28 March 1997; and Kommersant"-Daily, 28 and 29 March 1997. On Luzhkov's creation of a municipal 'superbank' in Moscow, see Kommersant"-Daily, 13 August 1997. See also Kommersant"-Daily, 28 February 1997, on the concentration of budgetary funds in Novosibirsk.
114. This tendency has been particularly pronounced - and controversial - in Moscow and St Petersburg. In the latter case, the banking lobby did successfully check some moves by the administration to grant a privileged status to one of their number; see Delovoi Peterburg, 28 March 1997; Nevskoe vremya, 28 March 1997; and Kommersant"-Daily, 28 and 29 March 1997. On Luzhkov's creation of a municipal 'superbank' in Moscow, see Kommersant"-Daily, 13 August 1997. See also Kommersant"-Daily, 28 February 1997, on the concentration of budgetary funds in Novosibirsk.
115. This tendency has been particularly pronounced - and controversial - in Moscow and St Petersburg. In the latter case, the banking lobby did successfully check some moves by the administration to grant a privileged status to one of their number; see Delovoi Peterburg, 28 March 1997; Nevskoe vremya, 28 March 1997; and Kommersant"-Daily, 28 and 29 March 1997. On Luzhkov's creation of a municipal 'superbank' in Moscow, see Kommersant"-Daily, 13 August 1997. See also Kommersant"-Daily, 28 February 1997, on the concentration of budgetary funds in Novosibirsk.
116. This tendency has been particularly pronounced - and controversial - in Moscow and St Petersburg. In the latter case, the banking lobby did successfully check some moves by the administration to grant a privileged status to one of their number; see Delovoi Peterburg, 28 March 1997; Nevskoe vremya, 28 March 1997; and Kommersant"-Daily, 28 and 29 March 1997. On Luzhkov's creation of a municipal 'superbank' in Moscow, see Kommersant"-Daily, 13 August 1997. See also Kommersant"-Daily, 28 February 1997, on the concentration of budgetary funds in Novosibirsk.
117. On the revival of pocket banks, see Profil', 22 February 1999. The link between shareholding and the provision of financial services is tightest in Russia's so-called financial-industrial groups; for a pre-collapse overview of these structures, see Juliet Johnson, 'Russia's Emerging Financial-Industrial Groups', Post-Soviet Affairs, 13, 4, October-December 1997.
118. On the revival of pocket banks, see Profil', 22 February 1999. The link between shareholding and the provision of financial services is tightest in Russia's so-called financial-industrial groups; for a pre-collapse overview of these structures, see Juliet Johnson, 'Russia's Emerging Financial-Industrial Groups', Post-Soviet Affairs, 13, 4, October-December 1997.
119. 'Special Report: Finance for Development', Russian Economic Trends Monthly Update, June 1997, p. viii.
120. On the uneven distribution of banks across the country, see L. Lysova, 'Regional'naya statistika bankovskoi sistemy konstatiruet', Ekonomika i zhizn', 1997, 31, p. 4. In 1995, for example, Orel, Tambov, Novgorod, Kursk, Vladimir, Leningrad and Lipetsk oblasti all had fewer than 10 banks, as did the Karelian, Ingush, Tuva and Khakassian republics. In a number of these there were only two commercial banks.
121. See Tompson, 'Nothing Learned ...'. See also Segodnya, 29 December 1998; Vremya MN, 28 December 1998; Segodnya, 26 February 1999; RIA Novosti, 15 March 1999; and Agentstvo Rosbizneskonsalting, 22 March 1999; United Financial Group, Russia Morning Comment, 23 March 1999, p. 6; and Finansovye izvestiya, 24 March 1999.
122. See Tompson, 'Nothing Learned ...'. See also Segodnya, 29 December 1998; Vremya MN, 28 December 1998; Segodnya, 26 February 1999; RIA Novosti, 15 March 1999; and Agentstvo Rosbizneskonsalting, 22 March 1999; United Financial Group, Russia Morning Comment, 23 March 1999, p. 6; and Finansovye izvestiya, 24 March 1999.
123. See Tompson, 'Nothing Learned ...'. See also Segodnya, 29 December 1998; Vremya MN, 28 December 1998; Segodnya, 26 February 1999; RIA Novosti, 15 March 1999; and Agentstvo Rosbizneskonsalting, 22 March 1999; United Financial Group, Russia Morning Comment, 23 March 1999, p. 6; and Finansovye izvestiya, 24 March 1999.
124. See Tompson, 'Nothing Learned ...'. See also Segodnya, 29 December 1998; Vremya MN, 28 December 1998; Segodnya, 26 February 1999; RIA Novosti, 15 March 1999; and Agentstvo Rosbizneskonsalting, 22 March 1999; United Financial Group, Russia Morning Comment, 23 March 1999, p. 6; and Finansovye izvestiya, 24 March 1999.
125. See Tompson, 'Nothing Learned ...'. See also Segodnya, 29 December 1998; Vremya MN, 28 December 1998; Segodnya, 26 February 1999; RIA Novosti, 15 March 1999; and Agentstvo Rosbizneskonsalting, 22 March 1999; United Financial Group, Russia Morning Comment, 23 March 1999, p. 6; and Finansovye izvestiya, 24 March 1999.
126. See Tompson, 'Nothing Learned ...'. See also Segodnya, 29 December 1998; Vremya MN, 28 December 1998; Segodnya, 26 February 1999; RIA Novosti, 15 March 1999; and Agentstvo Rosbizneskonsalting, 22 March 1999; United Financial Group, Russia Morning Comment, 23 March 1999, p. 6; and Finansovye izvestiya, 24 March 1999.
127. See Tompson, 'Nothing Learned ...'. See also Segodnya, 29 December 1998; Vremya MN, 28 December 1998; Segodnya, 26 February 1999; RIA Novosti, 15 March 1999; and Agentstvo Rosbizneskonsalting, 22 March 1999; United Financial Group, Russia Morning Comment, 23 March 1999, p. 6; and Finansovye izvestiya, 24 March 1999.
128. See Tompson, 'Nothing Learned ...'. See also Segodnya, 29 December 1998; Vremya MN, 28 December 1998; Segodnya, 26 February 1999; RIA Novosti, 15 March 1999; and Agentstvo Rosbizneskonsalting, 22 March 1999; United Financial Group, Russia Morning Comment, 23 March 1999, p. 6; and Finansovye izvestiya, 24 March 1999.
129. United Financial Group, Russia Morning Comment, 1 July 1999, pp. 14-15.
130. Jaroslav V. Sokolov & Valerii Kovalev, 'In Defence of Russian Accounting: A Reply to Foreign Critics', The European Accounting Review, 5, 4, December 1996, pp. 743-762.
131. It is not unusual for IAS results to show a bad loans-to-assets ratio double or triple that shown in RAS accounts. Moreover, the TsBR decision to allow banks to carry over losses from the turbulence of late 1997 created problems in interpreting accounts for 1997 and 1998 quite apart from the fall-out from the August collapse. In other words, the banks were in worse shape prior to August than they appeared.
132. United Financial Group, Russia Morning Comment, 17 March 1999, p. 6.
133. Nezavisimaya gazeta, 23 March 1999.
134. United Financial Group, Russia Morning Comment, 1 June 1999, p. 7.
135. For an extended discussion of this issue, see Tompson, 'The Price of Everything... ', pp. 263-266.
136. See Ickes & Ryterman, 'The Interenterprise Arrears Crisis in Russia', pp. 333-336; and 'Roadblock to Economic Reform: Inter-Enterprise Debt and the Transition to Markets', p. 233.
137. See Ickes & Ryterman, 'The Interenterprise Arrears Crisis in Russia', pp. 333-336; and 'Roadblock to Economic Reform: Inter-Enterprise Debt and the Transition to Markets', p. 233.
138. The reasons for this inability to adjust nominal prices are discussed at length in Woodruff, Money Unmade, chapter 5; see also David Woodruff, 'Beyond the Rouble: The Politics of Monetary Consolidation in Russia', paper presented to the Annual Conference of the American Association for the Advancement of Slavic Studies, Boston, November 1996; and Tompson, 'The Price of Everything ...'. Tompson, 'The Price of Everything ...', pp. 261-262, 268; Woodruffs solution is to distinguish between rubles (live money) and 'bartles'; see David M. Woodruff, 'It's Value That's Virtual: Bartles, Roubles and the Place of Gazprom in the Russian Economy', Post-Soviet Affairs, 15, 2, April-June 1999, pp. 130-148.
139. The reasons for this inability to adjust nominal prices are discussed at length in Woodruff, Money Unmade, chapter 5; see also David Woodruff, 'Beyond the Rouble: The Politics of Monetary Consolidation in Russia', paper presented to the Annual Conference of the American Association for the Advancement of Slavic Studies, Boston, November 1996; and Tompson, 'The Price of Everything ...'. Tompson, 'The Price of Everything ...', pp. 261-262, 268; Woodruffs solution is to distinguish between rubles (live money) and 'bartles'; see David M. Woodruff, 'It's Value That's Virtual: Bartles, Roubles and the Place of Gazprom in the Russian Economy', Post-Soviet Affairs, 15, 2, April-June 1999, pp. 130-148.
140. The reasons for this inability to adjust nominal prices are discussed at length in Woodruff, Money Unmade, chapter 5; see also David Woodruff, 'Beyond the Rouble: The Politics of Monetary Consolidation in Russia', paper presented to the Annual Conference of the American Association for the Advancement of Slavic Studies, Boston, November 1996; and Tompson, 'The Price of Everything ...'. Tompson, 'The Price of Everything ...', pp. 261-262, 268; Woodruffs solution is to distinguish between rubles (live money) and 'bartles'; see David M. Woodruff, 'It's Value That's Virtual: Bartles, Roubles and the Place of Gazprom in the Russian Economy', Post-Soviet Affairs, 15, 2, April-June 1999, pp. 130-148.
141. The reasons for this inability to adjust nominal prices are discussed at length in Woodruff, Money Unmade, chapter 5; see also David Woodruff, 'Beyond the Rouble: The Politics of Monetary Consolidation in Russia', paper presented to the Annual Conference of the American Association for the Advancement of Slavic Studies, Boston, November 1996; and Tompson, 'The Price of Everything ...'. Tompson, 'The Price of Everything ...', pp. 261-262, 268; Woodruffs solution is to distinguish between rubles (live money) and 'bartles'; see David M. Woodruff, 'It's Value That's Virtual: Bartles, Roubles and the Place of Gazprom in the Russian Economy', Post-Soviet Affairs, 15, 2, April-June 1999, pp. 130-148.
142. The reasons for this inability to adjust nominal prices are discussed at length in Woodruff, Money Unmade, chapter 5; see also David Woodruff, 'Beyond the Rouble: The Politics of Monetary Consolidation in Russia', paper presented to the Annual Conference of the American Association for the Advancement of Slavic Studies, Boston, November 1996; and Tompson, 'The Price of Everything ...'. Tompson, 'The Price of Everything ...', pp. 261-262, 268; Woodruffs solution is to distinguish between rubles (live money) and 'bartles'; see David M. Woodruff, 'It's Value That's Virtual: Bartles, Roubles and the Place of Gazprom in the Russian Economy', Post-Soviet Affairs, 15, 2, April-June 1999, pp. 130-148.
143. Karpov, p. 9.
144. For analyses of the 1998 bankruptcy law, see William Tompson, 'Russian Bankruptcy Law Considered', London: Mimeo, August 1998; and Russian Economic Trends, 7, 2, 1998, pp. 49-57.
145. For analyses of the 1998 bankruptcy law, see William Tompson, 'Russian Bankruptcy Law Considered', London: Mimeo, August 1998; and Russian Economic Trends, 7, 2, 1998, pp. 49-57.
146. For a detailed look at the law, see Tompson, 'Nothing Learned'; see also A. Strel'tsov, 'Diskussiya vokrug bankrotstva', Ekonomika i zhizn', 1999, 4, p. 44; Rossiiskaya gazeta, 22 January 1999; Irina Andreeva, 'Po pravu sil'nogo', Itogi, 2 February 1999, pp. 26-28; and Finansovaya Rossiya, 8 April 1999. It is also noteworthy that the TsBR itself prepared the normative acts which will determine what the law's provisions mean in practice. Vremya MN, 5 March 1999.
147. For a detailed look at the law, see Tompson, 'Nothing Learned'; see also A. Strel'tsov, 'Diskussiya vokrug bankrotstva', Ekonomika i zhizn', 1999, 4, p. 44; Rossiiskaya gazeta, 22 January 1999; Irina Andreeva, 'Po pravu sil'nogo', Itogi, 2 February 1999, pp. 26-28; and Finansovaya Rossiya, 8 April 1999. It is also noteworthy that the TsBR itself prepared the normative acts which will determine what the law's provisions mean in practice. Vremya MN, 5 March 1999.
148. For a detailed look at the law, see Tompson, 'Nothing Learned'; see also A. Strel'tsov, 'Diskussiya vokrug bankrotstva', Ekonomika i zhizn', 1999, 4, p. 44; Rossiiskaya gazeta, 22 January 1999; Irina Andreeva, 'Po pravu sil'nogo', Itogi, 2 February 1999, pp. 26-28; and Finansovaya Rossiya, 8 April 1999. It is also noteworthy that the TsBR itself prepared the normative acts which will determine what the law's provisions mean in practice. Vremya MN, 5 March 1999.
149. For a detailed look at the law, see Tompson, 'Nothing Learned'; see also A. Strel'tsov, 'Diskussiya vokrug bankrotstva', Ekonomika i zhizn', 1999, 4, p. 44; Rossiiskaya gazeta, 22 January 1999; Irina Andreeva, 'Po pravu sil'nogo', Itogi, 2 February 1999, pp. 26-28; and Finansovaya Rossiya, 8 April 1999. It is also noteworthy that the TsBR itself prepared the normative acts which will determine what the law's provisions mean in practice. Vremya MN, 5 March 1999.
150. For a detailed look at the law, see Tompson, 'Nothing Learned'; see also A. Strel'tsov, 'Diskussiya vokrug bankrotstva', Ekonomika i zhizn', 1999, 4, p. 44; Rossiiskaya gazeta, 22 January 1999; Irina Andreeva, 'Po pravu sil'nogo', Itogi, 2 February 1999, pp. 26-28; and Finansovaya Rossiya, 8 April 1999. It is also noteworthy that the TsBR itself prepared the normative acts which will determine what the law's provisions mean in practice. Vremya MN, 5 March 1999.
151. For a detailed look at the law, see Tompson, 'Nothing Learned'; see also A. Strel'tsov, 'Diskussiya vokrug bankrotstva', Ekonomika i zhizn', 1999, 4, p. 44; Rossiiskaya gazeta, 22 January 1999; Irina Andreeva, 'Po pravu sil'nogo', Itogi, 2 February 1999, pp. 26-28; and Finansovaya Rossiya, 8 April 1999. It is also noteworthy that the TsBR itself prepared the normative acts which will determine what the law's provisions mean in practice. Vremya MN, 5 March 1999.
152. Ya. Kuz'minov et al., Rossiiskaya ekonomika: Usloviya vyzhivaniya, predposylki razvitiya (Moscow, Gosudarstvennyi Universitet, Vysshaya shkola ekonomiki, 1999), p. 19.
153. Two high-profile bankruptcies involving major banks have drawn attention to the potential for abusing the law. See Elena Makovskaya, 'Voina za nasledstvo
154. Two high-profile bankruptcies involving major banks have drawn attention to the potential for abusing the law. See Elena Makovskaya, 'Voina za nasledstvo "Toko" ', Ekspert, 21 December 1998, pp. 22-24; Gleb P'yanykh, 'Nesostoyatel'noe bankrotstvo', Kommersant"-VLAST', 2 March 1999, pp. 22-24; and Gleb P'yanykh, 'Vse, chto vy boyalis' uznat' pro bankrotstvo', Kommersant"-Den'gi, 17 February 1999, pp. 31-34. More recently, charges of political interference and abuse of process have surfaced repeatedly in the battles for control of the oil company Sidanko and certain of its subsidiaries, particularly Chernogorneft.
155. Two high-profile bankruptcies involving major banks have drawn attention to the potential for abusing the law. See Elena Makovskaya, 'Voina za nasledstvo "Toko" ', Ekspert, 21 December 1998, pp. 22-24; Gleb P'yanykh, 'Nesostoyatel'noe bankrotstvo', Kommersant"-VLAST', 2 March 1999, pp. 22-24; and Gleb P'yanykh, 'Vse, chto vy boyalis' uznat' pro bankrotstvo', Kommersant"-Den'gi, 17 February 1999, pp. 31-34. More recently, charges of political interference and abuse of process have surfaced repeatedly in the battles for control of the oil company Sidanko and certain of its subsidiaries, particularly Chernogorneft.
156. These are called arbitrazhyne sudy, or arbitration courts, because of their descent from the Soviet-era Gosarbitrazh (state arbitration). However, the literal translation is misleading, as their role has little in common with arbitration as it is understood in the West.
157. See Kathryn Hendley, Barry W. Ickes, Peter Murrell & Randi Ryterman, 'Observations on the Use of Law by Russian Enterprises', Post-Soviet Affairs, 13, 1, January-March 1997, pp. 19-41; Kathryn Hendley, Peter Murrell & Randi Ryterman, 'Law, Relationships, and Private Enforcement: Transactional Strategies of Russian Enterprises', Europe-Asia Studies, 52, 4, June 2000, pp. 627-656 and Kathryn Hendley, Peter Murrell & Randi Ryterman, 'Law Works in Russia: The Role of Legal Institutions in the Transactions of Russian Enterprises', unpublished paper, March 1999, available at http://papers.ssrn.com/paper.taf?ABSTRACT_ID = 151132).
158. See Kathryn Hendley, Barry W. Ickes, Peter Murrell & Randi Ryterman, 'Observations on the Use of Law by Russian Enterprises', Post-Soviet Affairs, 13, 1, January-March 1997, pp. 19-41; Kathryn Hendley, Peter Murrell & Randi Ryterman, 'Law, Relationships, and Private Enforcement: Transactional Strategies of Russian Enterprises', Europe-Asia Studies, 52, 4, June 2000, pp. 627-656 and Kathryn Hendley, Peter Murrell & Randi Ryterman, 'Law Works in Russia: The Role of Legal Institutions in the Transactions of Russian Enterprises', unpublished paper, March 1999, available at http://papers.ssrn.com/paper.taf?ABSTRACT_ID = 151132).
159. See Kathryn Hendley, Barry W. Ickes, Peter Murrell & Randi Ryterman, 'Observations on the Use of Law by Russian Enterprises', Post-Soviet Affairs, 13, 1, January-March 1997, pp. 19-41; Kathryn Hendley, Peter Murrell & Randi Ryterman, 'Law, Relationships, and Private Enforcement: Transactional Strategies of Russian Enterprises', Europe-Asia Studies, 52, 4, June 2000, pp. 627-656 and Kathryn Hendley, Peter Murrell & Randi Ryterman, 'Law Works in Russia: The Role of Legal Institutions in the Transactions of Russian Enterprises', unpublished paper, March 1999, available at http://papers.ssrn.com/paper.taf?ABSTRACT_ID = 151132).
160. Bald & Nielsen, p. 90.
161. On the importance of tax collection in the restructuring effort, see Tompson, 'Nothing Learned'; A. Goncharov, 'Bankovskaya khirurgiya sposobna na neozhidannye rezul'taty', Ekonomika i zhizn', 1998, 46, p. 4; Segodnya, 9 April 1999; and Vremya MN, 13 April 1999. Even the Agency for Restructuring Credit Organisations (ARKO) has been drawn into the tax collection business; it is to be rewarded with the right to retain a share of any taxes it collects. United Financial Group, Russia Morning Comment, 6 September 1999, p. 8. A draft law on the creation of a government collegium to supervise ARKO, unveiled in September 1999, would ensure that tax ministry representatives dominated the collegium; Kommersant"-Daily, 15 September 1999.
162. On the importance of tax collection in the restructuring effort, see Tompson, 'Nothing Learned'; A. Goncharov, 'Bankovskaya khirurgiya sposobna na neozhidannye rezul'taty', Ekonomika i zhizn', 1998, 46, p. 4; Segodnya, 9 April 1999; and Vremya MN, 13 April 1999. Even the Agency for Restructuring Credit Organisations (ARKO) has been drawn into the tax collection business; it is to be rewarded with the right to retain a share of any taxes it collects. United Financial Group, Russia Morning Comment, 6 September 1999, p. 8. A draft law on the creation of a government collegium to supervise ARKO, unveiled in September 1999, would ensure that tax ministry representatives dominated the collegium; Kommersant"-Daily, 15 September 1999.
163. On the importance of tax collection in the restructuring effort, see Tompson, 'Nothing Learned'; A. Goncharov, 'Bankovskaya khirurgiya sposobna na neozhidannye rezul'taty', Ekonomika i zhizn', 1998, 46, p. 4; Segodnya, 9 April 1999; and Vremya MN, 13 April 1999. Even the Agency for Restructuring Credit Organisations (ARKO) has been drawn into the tax collection business; it is to be rewarded with the right to retain a share of any taxes it collects. United Financial Group, Russia Morning Comment, 6 September 1999, p. 8. A draft law on the creation of a government collegium to supervise ARKO, unveiled in September 1999, would ensure that tax ministry representatives dominated the collegium; Kommersant"-Daily, 15 September 1999.
164. On the importance of tax collection in the restructuring effort, see Tompson, 'Nothing Learned'; A. Goncharov, 'Bankovskaya khirurgiya sposobna na neozhidannye rezul'taty', Ekonomika i zhizn', 1998, 46, p. 4; Segodnya, 9 April 1999; and Vremya MN, 13 April 1999. Even the Agency for Restructuring Credit Organisations (ARKO) has been drawn into the tax collection business; it is to be rewarded with the right to retain a share of any taxes it collects. United Financial Group, Russia Morning Comment, 6 September 1999, p. 8. A draft law on the creation of a government collegium to supervise ARKO, unveiled in September 1999, would ensure that tax ministry representatives dominated the collegium; Kommersant"-Daily, 15 September 1999.
165. On the importance of tax collection in the restructuring effort, see Tompson, 'Nothing Learned'; A. Goncharov, 'Bankovskaya khirurgiya sposobna na neozhidannye rezul'taty', Ekonomika i zhizn', 1998, 46, p. 4; Segodnya, 9 April 1999; and Vremya MN, 13 April 1999. Even the Agency for Restructuring Credit Organisations (ARKO) has been drawn into the tax collection business; it is to be rewarded with the right to retain a share of any taxes it collects. United Financial Group, Russia Morning Comment, 6 September 1999, p. 8. A draft law on the creation of a government collegium to supervise ARKO, unveiled in September 1999, would ensure that tax ministry representatives dominated the collegium; Kommersant"-Daily, 15 September 1999.
166. On the importance of tax collection in the restructuring effort, see Tompson, 'Nothing Learned'; A. Goncharov, 'Bankovskaya khirurgiya sposobna na neozhidannye rezul'taty', Ekonomika i zhizn', 1998, 46, p. 4; Segodnya, 9 April 1999; and Vremya MN, 13 April 1999. Even the Agency for Restructuring Credit Organisations (ARKO) has been drawn into the tax collection business; it is to be rewarded with the right to retain a share of any taxes it collects. United Financial Group, Russia Morning Comment, 6 September 1999, p. 8. A draft law on the creation of a government collegium to supervise ARKO, unveiled in September 1999, would ensure that tax ministry representatives dominated the collegium; Kommersant"-Daily, 15 September 1999.
167. Irina Andreeva & Natalya Kalinichenko, 'Nashi den'gi - v trubu', Itogi, 2 March 1999, pp. 19-21.
168. Interview with Vladimir Gus'ev, head of the Department for Regional Coordination and Information Provision of the Federal Service for Bankruptcy and Financial Rehabilitation, Moscow, 16 February 1999.
169. See especially Aksenenko's comments in Finansovye izvestiya, 19 May 1999.
170. 'Bankrotstv bol'she ne budet', Kommersant-Vlast'', 23 March 1999, p. 14. For a detailed and highly critical analysis of the proposed amendment, see Pavel Zhukov, 'Lenivyi sobstvennik sredi "velikikh kombinatorov" ', Ekonomika i zhizn', 1999, 15, p. 1; and Vasilii Vitryansky, 'Bankrotstvo ... v otstavku?', Ekonomika i zhizn', 1999, 17, p. 1. On the problems raised by the balance sheet definition under the old law, see William Tompson, 'Russian Bankruptcy Law Considered', mimeo, University of London, August 1998.
171. 'Bankrotstv bol'she ne budet', Kommersant-Vlast'', 23 March 1999, p. 14. For a detailed and highly critical analysis of the proposed amendment, see Pavel Zhukov, 'Lenivyi sobstvennik sredi "velikikh kombinatorov" ', Ekonomika i zhizn', 1999, 15, p. 1; and Vasilii Vitryansky, 'Bankrotstvo ... v otstavku?', Ekonomika i zhizn', 1999, 17, p. 1. On the problems raised by the balance sheet definition under the old law, see William Tompson, 'Russian Bankruptcy Law Considered', mimeo, University of London, August 1998.
172. 'Bankrotstv bol'she ne budet', Kommersant-Vlast'', 23 March 1999, p. 14. For a detailed and highly critical analysis of the proposed amendment, see Pavel Zhukov, 'Lenivyi sobstvennik sredi "velikikh kombinatorov" ', Ekonomika i zhizn', 1999, 15, p. 1; and Vasilii Vitryansky, 'Bankrotstvo ... v otstavku?', Ekonomika i zhizn', 1999, 17, p. 1. On the problems raised by the balance sheet definition under the old law, see William Tompson, 'Russian Bankruptcy Law Considered', mimeo, University of London, August 1998.
173. 'Bankrotstv bol'she ne budet', Kommersant-Vlast'', 23 March 1999, p. 14. For a detailed and highly critical analysis of the proposed amendment, see Pavel Zhukov, 'Lenivyi sobstvennik sredi "velikikh kombinatorov" ', Ekonomika i zhizn', 1999, 15, p. 1; and Vasilii Vitryansky, 'Bankrotstvo ... v otstavku?', Ekonomika i zhizn', 1999, 17, p. 1. On the problems raised by the balance sheet definition under the old law, see William Tompson, 'Russian Bankruptcy Law Considered', mimeo, University of London, August 1998.