Interest and Hazard Rates of Russian Saving Banks

The number of (registered) commercial banks in Russia increased at a fast pace after the 1988 banking reform. Many of these banks lacked supervision and operated with dangerously low funding capital. In this paper we investigate the determinants of the hazard rates of banks active on the Moscovian deposits market during the 1994-97 period. We find that market share and duration have had a negative effect on the hazard rate, while the interest rate offered has had a positive effect.