
Contents
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Markets Are Dominated by State-Controlled Entities and Oil Price Markets Are Dominated by State-Controlled Entities and Oil Price
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Problematic Foundations from the 1990s Problematic Foundations from the 1990s
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Fast Growth in the 2000s Fast Growth in the 2000s
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The Dual Financial System The Dual Financial System
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Finance and Growth Finance and Growth
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Conclusions Conclusions
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References References
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24 Financial and Credit Markets
Get accessPekka Sutela is the Distinguished Visiting Professor at Sciences Po, Paris, and an Adjunct Professor at the School of Economics in the Aalto University of Helsinlki, Finland, formerly the Head the Bank of Finland Institute for Economies in Transition (BOFIT). His research interests include Russian and other post-Soviet economic development and policies, economies of the Baltic countries of Estonia, Latvia and Lithuania, and the history of economic thought.
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Published:01 October 2013
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Abstract
This chapter examines Russia’s nonbanking financial markets. After a turbulent beginning in the 1990s the economy monetized fast in the 2000s, and the Russian equity markets have become one of the world’s best performers. Legislation and supervision improved, but fundamental problems remained. Markets lack generalized trust, there is a low confidence in the rule of law, and many Russian financial transactions are executed off shore. State-controlled entities dominate markets, and oil price leads market dynamics. Since 2008 the authorities have declared an ambitious goal of making Moscow an international financial center, and if the efforts are successful, it will help developing markets, institutions, and regulation. The 2008 crisis laid bare underlying weaknesses, including lack of long-term funding and drastic shifts in sentiment.
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