The Impact of Proportional Regulation on Stability of Russian Banks

After the financial crisis of 2007-2009, the stability of the banking sector has become a central issue for international supervisory authorities and national Central Banks. Proportional regulation, which presupposes establishing the degree of regulatory burden in accordance with the amount of accepted risks and the size of a credit institution, is one of the issues discussed in the context of banking stability. The main goal of the research is to establish the relationship between the new regulatory approach and the stability of Russian banks. This study reviews international and Russian regulatory documents on proportional regulation and allows establishing boundaries of its introduction in Russia. After conducting an empirical research using data from reporting forms of the Central Bank of the Russian Federation, it was found that the introduction of proportional regulation affected the stability of Russian banks in different ways: for systemically important banks and banks with a basic license stability has not changed, but for banks with a universal license it has decreased.