The state capture of Russian non-bank financial institutions and markets after the 2008 crisis

This article explores the expansion of the Russian state into financial markets after the 2008 global financial crisis. The main argument is that the Russian state has been unable to pursue its own developmental agenda in the sector despite increased regulation and state takeovers. While independent private market participants were pushed aside by state-controlled financial intermediaries, the state failed to follow its own policy strategy towards establishing an international financial centre in Moscow. Instead, the Russian financial market institutions were rendered into a vehicle for inter-bank lending under control of the Central Bank of Russia. Data from Russian stock market and corporate bond market trading highlights the trend. The study discusses the role played by informal power networks in redistribution of state-controlled resources and financial flows, and how this factor influenced the state regulation of financial markets in Russia.