ABSTRACT
More than 20 years after the breakdown of the command economy, Russia remains a cash-based society. This chapter focuses on the de facto two shadow banking systems in Russia today. On the one hand, there is an intricate world of grey credit and payment networks that has evolved in parallel with the economic transition of the 1990s, and works as a core pillar of the underground economic turnover. On the other, as a consequence of the financial liberalisation of the 1990s, and in particular with the deepening of financial relations since the mid 2000s, the financialisation of the Russian economy has brought expansion of bank and non-bank financial intermediation. Thus, while one dimension of shadow financial intermediation in Russia is quite specific to the economic and governance problems of an emerging market, the second facet of the shadow financial system is a result of the country's integration into the global financial system.
