Effectiveness of forbearance measures for Russian commercial banks in the current crisis

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Due to the COVID-19 pandemic, real GDP of Russia is expected to fall by 4-6%. The banking industry provides liquidity to Russian business in times of hardship. On the one hand, the Bank of Russia facilitates lending opportunities for the business and subsidizes the mortgage interest rate for banks and the public in order to prevent business bankruptcies. And on the other hand, it provides liquidity to banks via REPO (repurchase agreement) auctions. Currently, there is not enough demand for REPO transactions from banks, but it might increase after other measures of support begin to be canceled. The article studies the effectiveness of current forbearance measures for Russian banks and provides an insight into the future development of the banking industry after the COVID-19 pandemic.

JEL classification: G21, G28, G29.
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