The need to reduce the oligopoly of banks with state participation in Russian Federation

To date, banks with state participation have concentrated more than 65% of the assets of the Russian banking sector. State banks house most of all deposits of Russian citizens, they issued most of all loans (both to individuals and legal entities), these banks generate the bulk of the sector's profits. In the rating of Russian banks, almost all positions in the top ten are occupied by state-owned banks, the half of the systemically important banks consists of these banks. Such a situation can negatively affect competition, deprive consumers of choice and worsen the quality of services provided, but at the same time it reduces risks and simplifies market control. Against the background of the Bank of Russia's policy to improve the banking sector, private banking is being compressed on the one hand, and the role of the state is being strengthened on the other. In the banking sector of Russia, an oligopoly of banks with state participation has formed. With this alignment of forces, a logical question arises: in what form competition is possible, if at all possible.

In this article, we will analyze in detail banks with state participation, their share and role in the banking sector, consider their impact on competition, and give recommendations to reduce the oligopoly of state banks. The object of the study is the banking sector of the Russian Federation, the subject of the study is Russian banks with state participation.