Currency Shifts as a Market Discipline Device: The Case of the Russian Market for Personal Deposits. Issue 10 (9th August 2019)

• Record Type: Journal Article
• Authors: Semenova, Maria; Shapkin, Andrey
• Is Part Of: Emerging markets finance & trade. Volume 55:Issue 10(2019)
• Page Start: 2149
• Page End: 2163
• Publication Date: 2019-08-09
• Subjects: banks -- currency shifts -- market discipline -- personal deposits -- Russia; G21 -- G01 -- P2; Balkan Peninsula -- Commerce -- Periodicals; Balkan Peninsula -- Foreign economic relations -- Periodicals; Europe, Central -- Commerce -- Periodicals; Europe, Central -- Foreign economic relations -- Periodicals; Europe, Eastern -- Commerce -- Periodicals; Europe, Eastern -- Foreign economic relations -- Periodicals; Turkey -- Commerce -- Periodicals; Turkey -- Foreign economic relations -- Periodicals; Asia -- Commerce -- Periodicals; Asia -- Foreign economic relations -- Periodicals; Eurasia -- Commerce -- Periodicals; Eurasia -- Foreign economic relations -- Periodicals; 382.05
• DOI: 10.1080/1540496X.2018.1562890
• Languages: English
• ISSNs: 1540-496X

Abstract

ABSTRACT: In developing economies, which rely considerably on the dollar and euro, changes in the currency structure of bank deposits may be strategic and may work as an additional market discipline mechanism. This study sheds light on this currency shifts mechanism in the Russian market for personal deposits. Using data on 900 banks for 2005–2015, we show that less risky banks demonstrate higher growth in the share of deposits denominated in foreign currency (FX), even when the exchange rate volatility component is extracted. The shifts are supported by the quantity-based mechanism as more reliable banks enjoy higher FX deposit growth.