Fixing Russia's Banks documents how Russia's financial system is built on what Michael S. Bernstam and Alvin Rabushka call ersatz banks. These inferior imitation banks have served largely as tools of the government to redistribute public funds to favored firms. The highly vaunted achievements of privatization, removal of price controls, and foreign trade liberalization have failed to produce growth because of a lack of private financing. National income has declined nearly 40 percent since 1992, with no recovery in sight.

After the breakup of the USSR, it briefly appeared as though Russia's emerging commercial banks might act as engines of growth for a new capitalist economy. However, despite more than a decade of "reforms," Russia's financial system collapsed in 1998. Why had ambitious efforts to decentralize and liberalize the banking industry failed? In A Fistful of Rubles, Juliet Johnson offers the first comprehensive look at how Russia's banks, once expected to revitalize the nation's economy, instead became one of the largest obstacles to its recovery.Drawing on interviews with Russian bankers, policymakers, and entrepreneurs, Johnson traces the evolution of the banking system from 1987 through the aftermath of the 1998 crash. She describes how dysfunctional institutional procedures left over from the Soviet period hindered the subsequent development of sound financial practices. Johnson argues that these legacies, along with misguided, Western-inspired liberalization policies, led to the creation of parasitic banks for which success depended on political connections rather than on investment strategies. Johnson demonstrates that banking reform efforts ultimately did more harm than good, because Russian officials and their international advisers failed to build the corresponding economic, legal, and political institutions upon which modern market behavior depends.

'...required reading for all who are seriously interested in the modern Russian economy.' - Pekka Sutela, Slavic Review Russian Banking considers the rise of commercial market-oriented banks in Russia, their links with government and non-financial companies and their role as intermediaries in the provision of finance for investment. The contributors explore the legacy of the Soviet past and current functions of the Russian banking system, contrasting these with those in other post-communist societies and describing peculiarities such as informal networks and corruption. The book also discusses the economic and global aspects of Russia's reform, focusing on financial crises, foreign depositors to Russian banks and the implications for Russian foreign debt. This up-to-date and comprehensive account of commercial banking in modern Russia will appeal to those concerned with the economics of transition or comparative banking. Political scientists and sociologists with an interest in forms of capitalism and the roles of banks will also find the book to be a fascinating read.

Recommends a strategy for reform of the Russian banking sector as part of an overall strategy to improve resource allocation in the economy. This study offers a three-to five-year strategy for making the banking sector in Russia more efficient in mobilizing financial savings, allocating resources, and processing payments. The strategy has three policy components: * Phasing out the Central Bank's direct credit programs þ currently the main instrument of monetary policy þ and replacing them with a discount window and limited budgetary subsidies for certain enterprises in key areas * Improving the commercial banking system through the International Standards Bank program, which will gradually phase in higher standards and regulations and encourage banks to adopt them voluntarily * Restructuring the large specialized banks (Rosselkhozbank, Sberbank, and Promstroibank), that now provide credit and other banking services to agriculture, households and small enterprises, and large state-owned enterprises. The study also recommends several high-priority improvements to Russia's financial infrastructure, including improvement of the legal framework, adoption of accounting and auditing standards, and overhaul of the payments system.

Excerpt from Russian Banks and Communist Funds: Report of an Enquiry Into Certain Transactions of the Bank for Russian Trade, Ltd., And the Moscow Narodny Bank, Ltd; Memorandum by the Directors of the Moscow Narodny Bank, Ltd Although the bulk of the entries were made by the Cashier it appeared that occasionally, when the Cashier was busy, the entries were made by Mr. Sell. The Out -going Post Register was produced. It contained the Post Office receipt for two registered packages despatched to the' Garantie Bank, Berlin, on the 9th November, 1927. A letter, dated the 1lth November, from the Garantie Bank, acknowledging the receipt of was produced; The information furnished to us was therefore that the two-bank of England notes in question formed part of a consignment of notes despatched by the Bank for Russian Trade In this country to a Soviet institution in Berlin. Subsequent movements of the notes have not yet been traced. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.