I. Е. Shapiro, S. N. Shchemelev. Regional Specificities of the Impact of the M2 Monetary Aggregate on the Development of Retail Lending in Russia (a Case Study of the Study of the Rostov Region)

https://doi.org/10.15507/2413-1407.26342.265-283
EDN: https://elibrary.ru/ajkntvISSN 2413-1407
УДК / UDC 336.74:334.732.2(470+571)(470.61) ISSN 2587-8549

Abstract

Introduction. The impact of the money supply on retail lending can vary significantly across Russian regions due to heterogeneity in banking infrastructure and household incomes. However, empirical assessments of this spatial effect in the literature are limited. The aim of this study is to quantify the identified impact of the M2 monetary aggregate on retail lending dynamics in Russia, taking into account the regional specifics of the monetary transmission mechanism (using the Rostov Region as an example).

Materials and Methods. The empirical data was based on data from the Central Bank of the Russian Federation and the Federal State Statistics Service for 2012–2024. Correlation and regression analysis, financial accelerator determination, and distributed lag models were used. The regional analysis was conducted using the Rostov Region as an example, as one of the economically significant regions of the Southern Federal District, characterized by a developed banking infrastructure and active retail lending.

Results. A correlation between retail lending volumes and money supply dynamics was established: the correlation coefficient between the M2 monetary aggregate and banks' loan portfolios was 0.85. A regression estimate showed that a 1 % increase in M2 leads to an average increase in lending volumes of 0.73 %. The time lag for the credit market response is two to three quarters, reflecting the inertia of monetary transmission. The impact of inflation and interest rates on lending activity is less pronounced. Retail lending dynamics in the Rostov Region (growth of approximately 30 % in 2022) are consistent with national trends, suggesting the reproducibility of monetary transmission mechanisms at the regional level and the effectiveness of the transmission of monetary impulses through the regional banking sector.

Conclusion. The M2 monetary aggregate is the dominant macroeconomic factor in retail lending in Russia. The results may be useful for calibrating monetary policy instruments taking into account time lags, as well as for regional authorities assessing the effectiveness of monetary transmission in their jurisdictions.

Keywords: money supply, credit, regional retail lending, macroeconomic stability, monetary policy, financial frictions, economic modeling

Conflict of interest. The authors declare no conflict of interest.

For citation: Shapiro I.Е., Shchemelev S.N. Regional Specificities of the Impact of the M2 Monetary Aggregate on the Development of Retail Lending in Russia (а Case Study of the Rostov Region). Russian Journal of Regional Studies. 2026;34(2):265–283. https://doi.org/10.15507/2413-1407.26342.265-283

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About the authors:

Irina E. Shapiro, Cand.Sci. (Econ.), Associate Professor, Professor of the Chair of Banking, Rostov State University of Economics (RSUE) (69 Bolshaya Sadovaya St., Rostov-on-Don 344002, Russian Federation), ORCID: https://orcid.org/0000-0002-3501-2728, Scopus ID: 57206737765, SPIN-code: 2637-2707, 19iesha77@gmail.com

Sergei N. Shchemelev, Dr.Sci. (Econ.), Professor of the Chair of Regional, Sectoral Economics and Enterprises, Rostov State University of Economics (RSUE) (69 Bolshaya Sadovaya St., Rostov-on-Don 344002, Russian Federation), ORCID: https://orcid.org/0000-0003-1494-4101, Scopus ID: 57217108771, SPIN-code: 5618-1683, sshchemelev@gmail.com

Contribution of the authors:

I. E. Shapiro – formal analysis; investigation; writing – review and editing.

S. N. Shchemelev – conceptualization; methodology; supervision.

Availability of data and materials. The datasets used and/or analyzed during the current study are available from the authors on reasonable request.

The authors have read and approved the final manuscript.

Submitted 11.03.2025; revised 17.10.2025; accepted 30.10.2025.