Subject This article analyzes the use of repo transactions by banks and the Bank of Russia as an important mechanism of regulation and increase of liquidity of the banking sector. It considers the risks of using repo transactions by banks to optimize the reporting, that take place in international practice. Objectives The article aims to study and describe repo transactions and institutional inequalities in access to financing through the use of repo mechanism by systemically important financial institutions and other banks. Methods For the study, we used the methods of logical analysis. Results The article notes the existence of institutional differences in banks' access to finance through the use of the repo mechanism. It considers a case of a small regional bank involved in active repo transactions in comparison with a systemically important financial institution. Conclusions The Russian banking sector undergoes significant transformation and consolidation. Small credit organizations are under considerable pressure, which often force them to resort to higher levels of risk. However, this measure does not help them avoid falling into a peculiar "institutional trap" of access to financing (including using the repo mechanism) in comparison with systemically important financial institutions.
Keywords: REPO, institutional conditions, difference, institutional rent, systemically important banks
Blokhin A.A., Sternik S.G., Bliznyak A.B. et al. Effekty institutsional'nykh razlichii i institutsional'noi renty v rossiiskoi ekonomike [Scientific report: The effects of institutional inequalities and institutional rent in the Russian economy]. Moscow, Mezhdunarodnye otnosheniya Publ., 2018, 74 p.
Gnauer V., Ruvish A. [Net Stable Funding Ratio: An overview of the EU regulatory requirements]. Bankovskoe obozrenie, 2018, no. 1. (In Russ.)
Munyan B. Regulatory Arbitrage in Repo Markets. Office of Financial Research Working Paper, October 29, 2015, no. 15-22. URL: Link
Wiggins R., Metrick A. The Lehman Brothers Bankruptcy C: Managing the Balance Sheet Through the Use of Repo 105 (October 1, 2014). Yale Program on Financial Stability Case Study 2014-3C-V1. URL: Link
Presley T.J., Jones B. Lehman Brothers: The Case Against Self-Regulation. Journal of Leadership, Accountability and Ethics, 2014, vol. 11, iss. 2, pp. 11–28. URL: Link
Pounder B. One Problem, Three Fixes. Strategic Finance Journal, 2011, no. 1, pp. 18–22. URL: Link
Burkova A.Yu. [Repo transactions regulation]. Pravo i ekonomika, 2011, no. 1, pp. 36–39. (In Russ.)
Zaporoshchenko V.A. [Legal regulation of repo transactions]. Biznes, menedzhment i pravo = Business, Management and Law, 2006, no. 2, pp. 92–94. (In Russ.)
Krasnov S.V. [Russian Central Bank repo operations: the economic substance and genesis of formation in Russia]. Ekonomika i sotsiologiya = Economics and Sociology, 2014, no. 2, pp. 42–47. (In Russ.)
Smagin A.A., Glotova I.I., Tomilina E.P., Kuz'menko I.P. [Development of repo transactions with the Central Counterparty in the Russian Federation]. KANT, 2017, no. 4, pp. 254–257. URL: Link (In Russ.)
Kharchenko L.P. [Clearing certificates of participation as a new financial instrument of the Moscow stock-exchange (Russia, St. Petersburg)]. Problemy sovremennoi ekonomiki = Problems of Modern Economics, 2016, no. 2, pp. 124–127. URL: Link (In Russ.)
Belomyttseva O.S. [General collateral certificates: special aspects of issuance, use in transactions with repurchase agreements, and tax treatment]. Problemy ucheta i finansov = Problems of Accounting and Finance, 2016, no. 3, pp. 45–48. URL: Link (In Russ.)
Koika K.A. [Establishing statutory ratios as an instrument of the Bank of Russia in regulating consolidation processes in the banking sector of Russia]. Nauka i biznes: puti razvitiya = Science and Business: Ways of Development, 2017, no. 8, pp. 51–54. (In Russ.)
Ustinov D.A. [Consolidation and the effect of sanation in the banking sector of the Russian Federation]. Ekonomika. Biznes. Banki = Economy. Business. Banks, 2017, no. S7, pp. 98–103. (In Russ.)