Playing catch up

With extreme volatility and liquidity concerns hitting Russia in the second half of 2008, large cracks were exposed in the country's bank risk management practices. Alexey Simanovsky, director of banking regulation and supervision at the Bank of Russia, describes the challenges of developing a robust risk management culture. By Alastair Marsh

Russian banks have experienced a dramatic reversal of fortune in recent months. With oil prices hitting record highs in July last year, the Russian banking sector appeared to have escaped relatively unscathed from the worst effects of the global financial crisis. But when the bottom fell out of the commodity market in the second half of 2008, the picture changed drastically.

From its high of $146