Russian financial market in 2019: key outcomes
In the course of 2019, the Russian financial system remained overall on a steady growth trajectory, driven by positive trends in external and domestic markets. The drastic change in early 2020 weighed on financial market segments. However, thanks to the buffers financial institutions have built up and current counter-crisis measures, the financial system is on track to retain its lending capacity. These are the findings of the Review of the Russian Financial Sector and Financial Instruments 2019, prepared by the Bank of Russia’s Research and Forecasting Department.
The review is focused on the operations of Russian financial institutions including banks, insurance companies, non-governmental pension funds, professional securities market participants and microfinance organisations. Under study are also key trends in core segments of the securities market.
The past year was marked by growing interest of individuals in financial investment. This was behind expanded investment in the non-bank and professional securities market segment. Early 2020 saw ongoing interest in the stock market. Even in March — which showed increased volatility in stock markets — the number of individual customers sustained its growth on the back of the accretion of the most risk-oriented bullish customers buying cheapening assets in the hope a turnaround.
It is front and center for market players to manage financial risks and make investment decisions in the current context of financial stress and heightened market volatility, highlights the review. The emergence of the coronavirus epidemic in early 2020, coupled with slower growth paces of the global economy, sent investors’ risk appetite markedly lower. This could not have left the Russian financial market unaffected. However, an optimum mix of monetary and fiscal policies together with well-timed decision-making in support of financial stability is set to cushion the fallout from external conditions.
Conclusions and recommendations contained in the review may be different from the Bank of Russia’s official position.