The paper presents a study of Russian banks' interest rates on household deposits during the formation period of the deposit insurance system. It is shown that market discipline weakened after deposit insurance was effectively in place.

The paper provides detailed empirical assessment of the role of non-residents in the development of Rus-sian financial crisis in 1997-1998. It is established that non-residents behaved differently during the pe-riod of crisis and significantly contributed to the collapse of the state bonds...