The Relationship between Interbank Competition in Premium Banking Deposit Market and Banking Sector Stability: Russian Practice in the Context of International Experience

Nowadays financial institutions around the world actively focus on the expansion of private banking services. This contributes both to an increase in the level of concentration of global high net worth individual wealth, and to the new entry models available for financial institutions specializing in this type of premium services. The aim of this study is to assess the impact of competition in the premium banking deposit market on the financial stability of Russian banks. The study found that Russian private banking market is characterized by a high level of interbank competition, which has a positive effect on the financial stability of Russian banks providing premium banking services. At the same time, an increase in the level of income diversification of Russian banks operating in premium banking market also has a positive effect on their financial stability. The conclusive results obtained in this study will allow banks to make decisions regarding the implementation and further development of the premium banking services as one of the ways to increase the share of non-interest income.