ANALYSIS OF THE IMPACT OF RESOURCE DEPENDENCE ON THE DEPTH AND STRUCTURE OF THE FINANCIAL SECTOR

Abstract

Under the conditions of the inflation targeting regime, monetary policy decisions have an impact on the economy through the financial sector. Given the significant dependence of the Russian economy on the export of oil, it is actual to study the specifics of the financial sector of resource economies and identify bottlenecks that reduce the effectiveness of the monetary policy of the Bank of Russia In this study, using the example of 109 countries for the period 1980-2019, we assessed the degree of influence of resource dependence on the depth and structure of the financial sector. It is revealed that for a group of developing countries, the hypothesis of the "resource curse" of the financial sector is not rejected. This means that in conditions of resource dependence, the depth of the banking sector is decreasing, and the financial sector is more focused on stock markets. In the second part of the study, we investigated the degree of influence of financial sector development indicators on the effectiveness of monetary policy of commodity exporting countries which are also inflation targeters. The results of estimates obtained by the system generalized method of moments indicate that for resource economies, stock market development indicators play an important role in reducing inflation, whereas for non-resource economies, the influence of banking sector parameters prevails. In addition, in the period after the global financial crisis, as a result of increased volatility of world commodity prices there is an increasing role of financial stability indicators in ensuring the effectiveness of monetary policy in a group of developing resource countries. In the future, the study can be supplemented by taking into account, within the framework of econometric models, the sanctions episodes that affect the development of the financial sector in the oil-exporting countries.

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