This study examines the role of levels and changes in bank balance sheet variables in explaining bank closure. Using a unique set of monthly bank-level panel data from Russia, we estimate determinants of bank license withdrawals during 2013M7-2017M7. We make two key findings. First, changes in CAMEL indicators are always significantly correlated with probability of bank closure, and the magnitude of parameter estimates decreases with the lag length. Second, while the one-month lagged levels of capital, earnings, and liquidity are significantly associated with the probability of bank closure in the subsequent month, the level of liquidity is the only significant indicator for longer lags. Our key contribution that changes in CAMEL variables matter more than levels is robust to various robustness checks.
The paper is part of the project "Infrastructure and Welfare Services in Russia: Enterprises as Beneficiaries and Service Providers" financed by the Academy of Finland (project number 200936), the World Bank, and Yrjö Jahnsson Foundation. The project has also received support from the Bank of Finland Institute for Economies in Transition.
This article uses annual data for 1992-2005 to examine income dispersion and convergence across 76 Russian regions. Wide disparities in income levels have emerged during the transition period. Dispersion has increased most among the initially better-off regions, whereas for the initially poorer regions no clear trend of divergence or convergence could be established. Further, evidence was found of both unconditional and conditional convergence, especially among the initially richer regions. Finally, it is observed that there is much less evidence of convergence after the economic crisis of 1998.
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