BANKS AND SOCIETY: WHO SERVES WHOM?

This paper adds a new dimension to the financialization research. The research question is how the contribution of banks to national economic performance compares with the share of national wealth appropriated by banks. In order to quantify it, I put forward a novel set of metrics. It embraces aspects such as: banks’ propensity to lend to non-financial enterprises, bank lending contribution to investment in fixed assets by non-financial companies, a cross-sector comparison of profitability and average wages, the share of banks in total taxes paid by corporations nationwide, etc. Each metric is composed by one or more indicators derived from publicly accessible statistical sources, thus ensuring transparency and replicability. I apply the metrics to Russian banking industry in the period of 1991–2020, and arrive at a number of counter-intuitive findings, such as banks flourishing and displaying record profitability while the rest of the economy melts down in the 1990s, or the trend reversing along with a creeping nationalization of the banks after 1998. Overall, one might argue that it is the economy (and society) at large that serves the banking industry, rather than the other way around, as it should be.