The 2014–15 Financial Crisis in Russia and its Weak Monetary Power Autonomy

  • Date: –17:00
  • Location: Institute for Russian and Eurasian Studies (IRES) Gamla torget 3, 3rd floor, IRES Library
  • Website
  • Organiser: Institute for Russian and Eurasian Studies (IRES)
  • Contact person: Jevgenija Gehsbarga
  • Phone: 018 471 1630
  • Föreläsning

with Dr. Ilja Viktorov (Stockholm University)

The presentation discusses the 2014–15 Russian financial crisis as a case study to explore why an accumulation of large international reserves does not provide protection against currency crises and macroeconomic adjustments in emerging market and developing countries (EMDs). Two structural factors condition Russia’s low monetary power autonomy (MPA). First, the country’s subordinated integration in global financial markets increases its financial vulnerability. The composition of external assets and liabilities, combined with cross-border capital flows, restrict the use of international reserves to delay currency crises. Second, the choice of a particular macroeconomic policy regime embraced the financialisation of the – mainly state-owned – Russian banking sector, thus making it difficult to transform liquidity inflows into credits for enterprises. The type of economy created due to the post-Communist transition means that provided ‘excessive’ liquidity remains in the financial system and is channelled into currency arbitrage. This factor increases exchange rate vulnerability and undermines Russia’s MPA. The paper co-written with professor of finance Alexander Abramov from RANEPA in Moscow has been recently published in ‘New Political Economy’ and can be downloaded from a link below. 


Ilja Viktorov holds a PhD in Economic History from Stockholm University. He is currently a research fellow at the Department of Economic History and International Relations, Stockholm University, and researcher affiliated with Centre for Baltic and East European Studies, Södertörn University. His research focuses on political economy of Russian financial markets and central bank policy.