Banking

   Under Mikhail Gorbachev, the banking system, previously dominated by Gosbank (State Bank), was diversified to create new lending agencies. Despite the reforms, the Russian Federation inherited a system that consisted of a small number of large, stateowned banks, including Sberbank, Vnesheconombank, and Bank VTB (formerly known as Vneshtorgbank). The Central Bank of the Russian Federation, established in 1990, is charged with setting monetary policy and maintaining the stability of the ruble, the country’s national currency. It replaced Gosbank in 1991. From 1991 to 1995, Russia saw the establishment of nearly 3,000 commercial banks (that number has shrunk to 1,000 since the late 1990s).

   A large number of corporate banks, beholden to the interests of large firms such as Lukoil, were also founded, as well as institutions that were used by the oligarchs to protect and expand their personal fortunes, often at the expense of account holders. The mafia’s use of and influence over Russia’s system of banking and finance during this period is well documented. The proliferation of “new” banks was also important to the federal and regional governments, which sought loans from these institutions during the 1990s. During the 1998 ruble crisis, a number of banks’ assets were frozen, and account holders were directed to transfer their holdings to Sberbank at a fixed rate.

   The use of personal checks remained tepid in the postindependence period due to a slow clearance process, resulting in a predominantly cash-based economy. Credit and bank cards, rare in Russia during the 1990s, have exploded, with approximately 120 million in circulation by 2009.