Further Estimations of the Bank Lending Channel in the Russian Federation (draft)

Abstract: We use a panel of annual balance sheet data on 980 Russian banks and test for the whether lending responses to a change in monetary policy differs, depending on the balance sheet strength of a bank. We find only weak signs of that for Russian banks. This result implies that the bank lending channel has some, albeit limited, degree of effectiveness in Russia, which may increase in time, with the continued development of the Russian banking system. 1Directorate General for Economic and Financial Affairs, European Commission, Belgium. I thank the careful comments of Lev Freinkman, Balazs Horvath and Christian Merkl, plus the comments of the participants of seminars held in May of 2007 at the Training Centre of the Central Bank of Russia in Tula and in February 2006 at the Central Bank of Belarus in Minsk and of two anonymous referees. The views expressed here are those of the author alone and do not necessarily represent those of the European Commission or any other organization to which the author is or was linked to. All usual disclaimers apply. 1