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A structure of real estate asset portfolios on the books of banks as a factor of the banking system stability

Vol. 25, Iss. 2, FEBRUARY 2019

Received: 7 November 2018

Received in revised form: 5 December 2018

Accepted: 19 December 2018

Available online: 28 February 2019

Subject Heading: Banking

JEL Classification: G01, G21, G32

Pages: 293–311

Sternik S.G. Financial University under Government of Russian Federation, Moscow, Russian Federation

Teleshev G.V. Institute of Economic Forecasting, RAS, Moscow, Russian Federation

Subject The article explores the relationship between real estate markets and the banking system stability, namely the one between the real estate asset structure of banks and potential losses in case of asset sharp impairment.
Objectives The article aims to examine the relationship between the structure of real estate assets on the Russian banks' books and banking system stability.
Methods For the study, we used the methods of logical and time-series analyses.
Results The article reveals a significant concentration of real estate assets on the balances of the largest banks. It notes that the share of real estate assets in the total assets of the Russian banking system is insignificant and incapable to cause a full-scale banking crisis even in case of sharp impairment of real estate portfolios of banks.
Conclusions However, given the potential growth of real estate portfolios on the banks' balances and their share in the assets of the banking system, there is a need to create a uniform comprehensive system of indicators of value management of banks' real estate portfolios, adapted to the non-profile nature of property management for the banking sector and features of the Russian real estate market.

Keywords: real estate, risk, property value, systemically important banks


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