The Effect of Homogeneity on Systemic Risk in the Russian Banking Sector

According to last researches, one of the reasons of fragility in the national economy can be homogeneity. Homogeneity is characterized by a lack of diversity among banks. As a result, organizations gradually become similar. Such homogeneity contributes to the accumulation of systemic risk and can cause a crisis of the banking system. The main purpose of this paper is to study the effect of homogeneity on systemic risk and to understand whether the homogeneity between banks in Russia is beneficial. The issue of this research is that today there is a limited amount of works studying the relationship between homogeneity and systemic risk. In addition, this research has never conducted for Russia. Here homogeneity means that banks in the system become similar to each other through the use of resembling strategies. Such similarity was analyzed through the loan portfolio. The results showed that the use of a similar strategy of diversifying the loan portfolio by banks contributes to minimizing systemic risk.