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Nonetheless, the major risk lies in a potential bank run, catalyzed by public concern over banking stability. Such a scenario might unfold with minimal signaling from the government, leading consumers to withdraw funds simultaneously, thus triggering a cycle of economic panic. While there are mechanisms the Kremlin can employ to stem such crises, including deposit insurance and withdrawal caps, each of these solutions carries its own economic distortions.
Recall the lessons learned during the Great Recession: a single bank’s failure does not necessarily lead to systemic collapse, but widespread panic and lack of trust can spiral out of control, further endangering the banking sector.