The current situation in the banking sector of the Russian Federation reveals a high degree of instability of lending institutions. In this regard, the Bank of Russia acts as a mega-regulator: its policy is to stabilize the banking market by using various financial and administrative instruments. Most commercial banks are not able to cope with the new requirements and regulations imposed by the state. As a result, they leave the market and recognize their insolvency. The present article introduces some statistics that characterizes the state of the banking sector over the past six years and confirms the situation described above. The existing banking legislation proved unable to determine the concept of insolvency of a commercial bank. The authors proposed a more specific definition of this concept, which fully reflects the essence of this economic phenomenon. In order to avoid bankruptcy, a credit institution may resort to a financial recovery procedure. A prompt and complete procedure gives an opportunity to avoid negative consequences and resume banking activities. The authors introduced a new interpretation of the financial recovery procedure in order to highlight the essence and specific features of the mechanism in the current economic conditions. The article presents a classification and a detailed roadmap of financial recovery measures. The roadmap provides a gradual financial recovery of the lending institution, which can be interpreted as the development of an economy.
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