Th e Russian banking system has been in its worst crisis since 1998, a fact made particularly evident by the collapse in the share prices for every fi nancial service company, together with the fall of Russian stock markets. However, unlike 1998, the banking system has been in a better position thanks to the previous macroeconomics boom, which lasted for almost 10 years. Th e highly fragmented structure of the banking sector still relies heavily on the state banks, but the contribution by foreign banks as well as local private banks has increased steadily in the last years. We have discussed the major improvements and weaknesses that currently characterize the Russian banking system, together with the systemic risk that still plays a major role in such a market.