Mortgage borrowers who have unconfirmed income turn
out to be unable to repay the loan less often than public officials, whose income
consists of their official salary only. The probability of loan default is also
considerably influenced by the cost of the loan. These were the findings of a
study conducted by Alexander Karminsky, HSE Professor, and Agata Lozinskaya, Junior
Research Fellow at the HSE campus in Perm.
The ability to foresee stock market trends and the potential performance of specific financial instruments is key to a stock trader’s success. Yet studies show that both traders and financial analysts often make mistakes. Lyudmila Egorova, Junior Research Fellow of the HSE International Laboratory of Decision Choice and Analysis, applied mathematical methods to calculate which strategies can help brokers make a profit and avoid bankruptcy.
While helping build consumer trust in credit institutions, deposit
insurance can prompt bankers to engage in risky and opportunistic behaviour;
larger banks tend to be more cautious and do a better job managing troubled
assets, according to Natalia Gorelaya, Associate Professor at the HSE Faculty
of Economic Sciences’ Department of Finance.
The average Russian family lives on their salaries and pensions and only takes loans in exceptional cases. The vast majority of Russians are in fact millionaires, since almost every family owns their residence, while a third of all households also own other property, usually a 'dacha', i.e. a summer house. Thus, the combined value of assets owned by a typical Russian family exceeds that of many Europeans, according to the Russian Survey of Consumer Finance
Almost two-thirds of Russians use financial services. With this, however, the public’s level of financial literacy is low overall, and there is no convincing evidence that people are interested in improving this. This is largely due to the fact that the information presently available on financial services is complex and difficult to understand, according to experts tasked by the Russian Finance Ministry to conduct the first base survey on the financial literacy level and competence of the Russian public
When people have a choice, they can either rely on their own information or on that received from those around them. The more emotional an individual's relationship with their own data, the higher the likelihood that, when making a decision, they will be led by that rather than by other people's opinions. This also applies to investors' activity on the financial markets – as research by HSE Psychology Faculty Dean Vasily Klyucharev, and researchers from the University of Basel Rafael Huber and Jörg Rieskamp
The performance of Russia's non-state pension funds has been lower than in OECD countries, primarily due to a legal ban on investing these funds in high-yield, high-risk assets, according to a study by Alexander Nepp, Polina Kryuchkova, and Alexander Semin
Despite its thriving banking sector, Russia's industrial production remains stagnant, as financial institutions are failing to support development in the real sector. Vassilisa Makarova, Associate Professor at the HSE's Department of Financial Markets and Financial Management (Faculty of Economics, St. Petersburg), and Andrei Krylov, postgraduate student at St. Petersburg State University of Economics, examined the controversial relationship between Russian banks and industry
Most Russian banks do not skimp on risk management costs. The only exception are aggressive retail lenders too fixated on cost-cutting, said Mikhail Mamonov at the HSE's XV April Conference
It may appear at first glance that most Russians don’t have too great a loan debt burden. However, outstanding individual debt in Russia is dominated by short-term consumer loans with high interest rates, and a significant percentage of borrowers spend at least half of their earnings paying off debt. HSE experts have examined the use of bank loans and outstanding debt rates as part of Monitoring the Public’s Financial Behaviour
Some 45% of residents in Russia’s small towns live with loans, and 23% have problems with repayments. A lack of financial literacy is the main cause of the problem. Formal credit has replaced informal borrowing and lending between community members and local retailers, Grigory Yudin and Ivan Pavlyutkin found in their study 'Debt and the Community: Two Debt-driven Economies of Small Towns'
The Russian Government is discussing a proposal on the administrative limitation of maximum interest rates on consumer loans. The reason is the state’s concern regarding citizens who fall into debt to banks and micro finance organizations. One of Russia’s partners in BRICS – South Africa – already has experience of such a solution. The HSE Center of Development published an analysis of this case in its ‘Banks: Statistics and Economics’ newsletter