Financial Sanctions: Consequencesfor Russia's Economy and Economic Policy

In: Voprosy ėkonomiki: ežemesjačnyj žurnal, Heft 12, S. 54-66

Abstract

The article considers the impact of international sanctions on the landscape of the Russian banking sector as well as on the economic policy framework. The author concludes that the effect of sanctions on bank lending and funding markets has been asymmetric: in particular, the increase of deposit interest rates has been considerably more moderate, resulting from substantial weakening in the retail funding base since 2013 as well as from the support provided by the Bank of Russia. The key consequence is the strengthening of state banks, which could generate risks for the quality of economic growth.