Structural Transformations in the Russian Banking Sector amid Geopolitical Changes

Abstract

The study is focused on the peculiarities of the Russian banking sector and its transformation in 2014–2023. It is shown that today about 60% of the assets of the Russian banking sector are held by five banks, the controlling stake in which is owned by the structures of the Ministry of Finance of the Russian Federation – the National Welfare Fund and the Rosimushchestvo agency. Until 2022, several small countries (Austria, Ireland, Cyprus, Luxembourg, the Netherlands and Switzerland) hosted almost half of all foreign assets and liabilities of Russian banks. On this basis, it was concluded that a significant part of Russian money moved in the circle “Russian banks → their subsidiaries abroad → Russian banks”. It was found that after the start of the military special operation in Ukraine and the US and EU ban on the export of cash dollars and euros to Russia, households have already withdrawn about half of their foreign currency deposits abroad. However, Chinese yuan and other “friendly” currencies will not be able to replace the withdrawn dollars and euros in household deposits in domestic banks.