What Determines a Bank Failure?

Survival in the Russian Banking Sector

Abstract

In Russia, an increasing number of banks fail every year for various reasons. Some banks get closed voluntarily, some merge with other banks, whereas others have their licenses revoked by the Central Bank for noncompliance with Central Bank rules. But is a bank’s poor performance the only reason for a failure? With a use of new datasets on bank failures, this paper shows that bank survival is determined by far more than its performance.