Experts and Researchers Discussed Trends, Risks, and Opportunities in Bank Lending
Opening the seminar, Alexander Morozov, Ph.D. in Economics, Director of the Research Department at the Bank of Russia, emphasized the international scope of the event and highlighted the central themes of discussion: “We will examine how the current situation in the banking sector is viewed by both regulators and regulated entities, explore possible consensus pathways, and identify directions for future development. We will focus on two core issues: mortgage lending and concentration risks in the banking sector.”
Maxim Nikitin, Ph.D., Deputy Director for Research at ICEF, HSE University, delivered the welcoming address on behalf of ICEF:
“This joint seminar on macroeconomic research is being hosted at HSE University for the first time, and I am very pleased about this. The event represents a valuable intersection between academic inquiry and the day-to-day operations of commercial banks, serving as a practical initiative within our strategic partnership with the Bank of Russia. I would like to thank the seminar’s program committee — Vladimir Sokolov, Ph.D., Head of the Laboratory for Financial Economics at ICEF, and Maria Semenova, Doctor of Economics, Head of the Laboratory for Banking Research at HSE — for developing the scientific program.”
Roundtable with Experts
The seminar began with a roundtable discussion on “Bank Lending: Trends, Risks, and New Opportunities.” Alexander Danilov, Director of the Banking Regulation and Analytics Department at the Bank of Russia, detailed the heightened risks associated with credit concentration, which have worsened since 2022. He outlined the Bank of Russia’s proposed strategies for gradually achieving target concentration limits through various risk management and redistribution mechanisms.
Alexander Danilov, Director of the Banking Regulation and Analytics Department at the Bank of Russia
“At several banks, the concentration of credit risk per borrower has reached critically high levels. In the event of default, this poses a serious threat to their financial stability. Several factors have led to this: sanctions that forced banks to refinance the foreign debts of sanctioned companies; limited access to capital markets; and increased risk tolerance among some banks. To reduce concentration levels smoothly and reach target regulatory thresholds, we propose a set of measures: introducing a 'yellow zone' for concentration norms, using the Bank Sector Support Fund to issue guarantees, incorporating credit default swaps (CDS), and other risk-sharing mechanisms. These measures are designed to maintain credit availability while bolstering financial system resilience.”
Mikhail Matovnikov, Ph.D. in Economics, Senior Managing Director and Chief Analyst at Sberbank
Mikhail Matovnikov focused his presentation on the state of the mortgage market in Russia:
“Russia is the only country in the world actively working against mortgage lending,” he remarked. “Elsewhere, mortgage markets are supported. Let us set aside the aim of defeating inflation at any cost. Currently, there are two potential bubbles: one in residential construction, and another in the mortgage market. While related, they are not identical. In China, we see entire buildings being demolished because no one is buying the units. At the same time, we face borrowers who are unable to repay their loans.”
Evgeny Rumyantsev, Deputy Director of the Financial Stability Department at the Bank of Russia
Evgeny Rumyantsev presented regional data on real estate price gaps and discussed delinquency rates across market and subsidized mortgage segments:
“The Russian mortgage system continues to demonstrate high quality by key indicators, but requires constant monitoring to ensure stability. In 2024, we observed some deterioration in loan portfolio quality — as expected, within the market segment, but also in the subsidized segment, which ended on July 1, 2024. In some cases, banks approved loans for borrowers who rushed to close deals before the program’s conclusion and later struggled with repayments. Our policy measures aim not to restrict mortgages but to balance associated risks and enhance system resilience.”
Academic Seminar
The academic portion of the seminar featured four research papers: two from Russian research institutions (Bank of Russia and HSE University), presented by Svetlana Popova and Sedki Zayani, and two international contributions from Tilburg University and the University of South Carolina, presented by Ertunc Aydogdu and Hugh Kim.
One of the discussants was Professor Ji Wu of SWUFE, ICEF’s official partner university. Additional discussants included Alexey Ponomarenko, Ph.D., Doctor of Economics, Head of the Research Division at the Bank of Russia’s DIP; Madina Karamysheva, Ph.D., HSE University; and Vladimir Sokolov, Ph.D., ICEF.
The sessions were moderated by Professor Philipp Kartavyy, Doctor of Economics, Lomonosov Moscow State University, and Timur Sobolev, Ph.D., NES.
Key Findings of the 14th Research Seminar
The academic research presented covered critical dimensions of banking regulation, lending, and financial stability, with specific focus on environmental factors, managerial competencies, dollarization of the financial system, and the impact of bank managers’ sentiment on lending dynamics.
The findings can be summarized into several key areas:
Lack of environmental incentives in banking:
Russian banks currently do not incorporate environmental factors into interest rate setting, pointing to insufficient regulatory pressure in the area of green finance.
Managerial competencies in lending:
The impact of effective management on bank stability is nuanced: under normal conditions, it helps mitigate risks, but in the presence of high levels of non-performing loans, it may drive more aggressive lending strategies.
Financial dollarization as a destabilizing factor:
Heavy reliance on foreign currency borrowing increases crisis vulnerability. However, regulatory tools — such as taxation on foreign currency loans — can help mitigate these risks.
Managerial sentiment and the credit cycle:
The subjective outlooks of bank executives significantly influence both credit loss provisioning and loan issuance volumes, especially during times of crisis.
Together, these studies underscore the complexity and multifaceted nature of the forces shaping the banking system. Regulators should not only consider traditional macroeconomic indicators, but also behavioral and institutional dimensions such as management quality, executive sentiment, financial dollarization, and the need for green finance incentives.
Closing Remarks
In his closing remarks, Vladimir Sokolov, Ph.D., thanked all presenters, discussants, and participants of the academic seminar. He noted that all papers were of a high academic caliber and sparked substantial discussion from both the discussants and the broader audience. He also announced that the next seminar will take place on July 1, 2025, in St. Petersburg. The organizing team will continue developing joint academic initiatives and invites submissions from researchers in the fields of finance and monetary policy for upcoming seminars co-hosted by the Bank of Russia, NES, and HSE University.
