IMF Staff Country Reports

This paper presents the Financial Sector Stability Assessment Update on the Russian Federation. Indicators of bank soundness and performance are broadly favorable but credit risk poses a challenge over the medium term, and capitalization should rise to support continued banking sector development. The system has weathered the global credit crunch that began in mid-2007, yet the funding model is coming under strain as the turmoil in global markets continues. Capital markets have grown dramatically in recent years but remain highly concentrated.