The Russian Banking System during the Covid-19 Crisis and the Central Bank's Stabilisation Measures 1

ABSTRACT

The COVID-19 pandemic has significantly affected the financial situation of the individuals and companies in the Russian Federation, as a result of the mobility restrictions and lockdowns. In this context, banking system has played an important role in financing the economy. To avoid a credit crunch and to facilitate economic recovery, the Bank of Russia has adopted a wide range of stabilization measures, as cutting the key rate, easing banking capital and liquidity regulations, providing extensive liquidity, new lending facilities to banks etc. The purpose of this article is to analyse the Central Bank's response to the pandemic and to assess the financial stability of the banking system in the Russian Federation during the COVID-19 crisis. To achieve this goal, a chronology of the main measures adopted during the pandemic by the Bank of Russia is presented. In addition, the main indicators of the banking stability are analysed, namely, the level of capitalization and liquidity, the return on capital and assets, but also the quality of bank loans.