However, if a factory's management set up a bank, the bank could borrow centralized credits without having any business plans and then pass them on to the factory. Others were created because people wanted to get into the banking business on the assumption that it was always a lucrative undertaking, without realizing the extent to which they needed banking expertise and training to be successful. However, there are at least three dozen very strong financial institutions that in the long term will be a part of Russian banking history. Over the past four years they have done an extraordinary job of developing staff, infrastructure, clientele, and real knowledge of financial markets. Although 30 to 40 out of 2,800 institutions might not seem enough, it is actually amazing that so many strong ones have been created in such a short period of time.
Russian banking is indeed a house of cards with the potential for many bankruptcies.
I don't think that a large bankruptcy will be allowed, but many banks with former ties to state enterprises are grappling with the inter-enterprise loan issue , and some are on the brink. There is not much support among the strong banks for a bailout fund. In the last year there seem to have been more bankruptcies than in prior years, largely involving the smaller banks. The central bank has almost a Darwinian attitude toward smaller banks, not wanting to save them. However, I doubt the authorities would let a large bank fail because of the likely domino effect on the whole financial system.