Introduction

To underline its importance and influence, the banking system is often called the circular system of the economy. In view of this its “health” is crucial for the stable economic growth, and, consequently, the modernization of banking sector is essential for the sustainable development of national economy. Therefore, it should be emphasized that strengthening of the Russian economy (which appears to be the main objective of the national economic policy nowadays) is impossible without the stable functioning of banking sector which in turn can be achieved by getting rid of its weak points.

It is generally acknowledged that a status quo of Russian banking system is far from perfect – there are a lot of problems with liquidity, recapitalization, technological innovations, the Central Bank regulation etc. However, the large majority of experts (e.g. HSE professors Alexander Karminsky[1] and Vasily Solodkov[2]) consider that the resource problem is the most burning issue for the Russian banking system and, as a result, for the Russian economy.

Bank resources consist of equity of the bank and borrowed funds and used for active bank operations (in the first place, loans) which in turn provide economic growth by satisfying business need for funds.

Speaking in general, what the bank resource base may be potentially formed of? The sources are the equity of the banks and borrowed funds which include private, business, state, pension funds and funds of insurance companies. By the way, in the most developed banking systems most types of these sources are viable.

Nevertheless, in Russia due to the peculiarities of our economic system private funds (i.e. the long-term deposits) are the primary source for funding. Even so, in connection with global macroeconomic instability and relatively recent past economic troubles in our country the largest part of the population prefer short-term deposits which are also revocable according to the law. So banks are functioning in the situation of lack of so-called “long-term money” which is not appropriate not only for the banking system but also for the economy in whole.

As analytical surveys show there is no single answer to the question of how soon the resource problem will be solved in our country. It appears to primarily depend on the quickness of measures which must be taken jointly by commercial banks themselves and the regulator.

Thus, the object of this study is commercial banks in Russia. The subject is their funding (i.e. formation of their resource base). The primary aim is to analyze the problem which exists in this area and the purpose of the study is to find what sources of funding may be viable in Russia.

The logic of this paper is the following: firstly, the ways of bank funding in other countries are reviewed, secondly, the reasons for non-working of most of these sources and, consequently, the occurrence of the resource problem in the Russian banks are investigated, at the third step the historical dynamics of the sources of bank funding is described, then the banking regulation and the Central Bank policy in this field are examined, and finally several methods of solving the resource problem are analyzed (based on the foreign experience in this area).

Concerning the sources of information it is crucial to mention that the most useful ones are analytical surveys and articles prepared by experts or different organizations (the Russian Central bank, Association of Russian banks etc.). As for statistics on Russian banking sector, it has been extracted primarily from the official website of the Central Bank of Russia.