Russian Federation cross-border investments and bank expansion

Abstract

The paper looks into the specifics of cross-border investments related to changes in the direction of capital flow. The growth factors regarding the export of capital have been identified from the point of view of the Neo-Keynesian theory of investment, which describes a situation when the economy of a country demonstrates a stable excess of the gross saving rate (gross saving to GDP ratio) over the gross accumulation rate (gross accumulation to GDP ratio), which can be the result of forcing exports and/or rapidly growing prices for the main export commodities. The paper presents the results of the evaluated international investment activity of the Russian Federation in 2018-2019, formed with standard components. The main indicators, characterizing financial stability and positions of the Russian banking system given the sectoral limitations, have been reported. The key trade and investment positions of the Russian Federation and the EU countries have been analyzed. Calculations have been made to demonstrate the volume of direct Russian investments in the EU countries within 2010-2017. Some peculiarities have been identified and the presence of asymmetry in the investment cooperation between the EU and the RF has been confirmed. Specific features of the Russian export of capital have been revealed. A range of factors, preconditioning a growth of flow of Russian bank capital to the countries of the EU, has been formed. The main parameters of the international investment activity of Russian banking institutions have been presented and some data have been given on the geographical distribution of foreign assets and liabilities of the Russian bank sector by groups of countries and individual (most attractive for Russian investment) countries of the world. It has been concluded that supporting European expansion of the national banking institutions could be one of the prioritized directions of the state policy of the Russian Federation in the banking sector.