ИСТИНА

The issue of financial market development lays beyond the Gershenkron’s paradigm. However, studies of this issue in a regional perspective could help to review the Gerschenkron’s question about a low availability of credits in a backward country. This research deals with integration processes in the commercial banking market in the Russian Empire in 1874-1897. The integration is studied through interest (lending) rate analysis. According to the statistical analysis, including regression, interest rates clearly decreased and became more homogeneous from 1874 to 1897; there were many regions with lending rates below the national average. In comparison with interest rates of the Bank of Japan in 1897 (10-12%), the Russian lending rates were significantly lower (about 7.3%). As regards the USA, the gross rates of return on earning assets were a little bit higher in Russia (Russia — 7.9%, the US reserve-city national banks — 7.5%; the US non-reserve-city national banks — 7.2%). The regional interest rates’ distribution can be explained by supply-demand effects (the more resources there were in the region the lower rates were there), scale effects (larger banks offered lower rates), as well as effects related to market imperfections, when access to bank loans was mainly for groups of privileged customers, close to the bank’s owners and its top-level managers (credit rationing).