Banking and its regulation
Recent developments in the global economyshow an increasing dependence of states on the functioning of the financial and credit sphere. Annually, the volumes of financing the interests of business, government and consumers grow significantly, to serve these needs and there is a banking system.
What is a bank
Banks are an integral part of anyeconomy, whether world, state or regional. Individuals, business, government and other financial participants are connected by the banking sector.
The Bank is a financial and credit institution,which performs operations with money, securities, metals and contractual obligations, the subject of which are cash or other financial instruments, for example, the assignment agreement.
There are, in the broadest sense, 2 types of banks:
- The central bank is a state institution,which is separated from other authorities in charge of financial and monetary policies, produces the supervision of financial institutions, provides the emission of money and government securities, loans to commercial banks. The banking sector is under the supervision of the Central Bank.
- A commercial bank is a private or public institution created for the purpose of generating profit through the implementation of banking operations.
Requirements for banks
The legal basis for the establishment of the bank is the Law on Banking Activities, which provides for the necessary requirements for obtaining a license:
- the amount of equity is 18,000,000;
- list of documents;
- "clean" business and tax history of the founders;
- availability of a risk and capital management system and internal audit system.
It should be noted that non-fulfillment of requirementslaw entails a motivated refusal of the Central Bank to issue a license. Also, if a legal entity carries out banking operations without the availability of a relevant license, it may be deprived of all profits received as a result of such activities and is forced to pay a double penalty from its size in favor of the Federal Budget.
The banking sector is also under surveillanceauthoritative rating agencies such as Fitch Rating, S & P, Moody's, etc. Their evaluation determines the reliability and stability of the credit institution for several years ahead, high ratings increase the attractiveness of the bank to other financial institutions among investors.
The totality of banking operations is very extensive, most banks make a priority on only a part of them, so the classification according to the type of activity is valid:
- Universal banks. They deal with almost all types of banking activities, for example, Sberbank, VTB24.
- Investment banks. Engaged in investment and speculation in financial markets, for example, BCS, FINNAM.
- Branch Banks. They are mainly engaged in lending and business services, for example, Rosselkhozbank, Promstroibank.
- Specialized banks. They fulfill a narrow list of bank obligations or have a non-standard service system, for example, Gazprombank, Tinkoff.
The banking sector includes the following types of banking operations:
- Depository storage.
- Transaction support.
- Brokerage services.
- Currency exchange.
- Placement of precious metals.
- Leasing operations.
- Trust management of financial assets.
Legislative regulation of banking: opportunities and limitations
The financial and banking sector is underlegislative and financial regulation. From the legal point of view, banks are subject to a set of legislative acts regulating banking activities. In Russia, the main one is the Federal Law "On Banking", and, for example, the relationship between a borrower and a bank is governed by the provisions of the Civil Code.
With regard to financial regulation, itis the supervision of commercial banks by the Central Bank. He issues and revokes licenses, checks the financial position of the bank, in particular, monitors the adequacy of the liquidity level, the transparency of transactions, the level of reserve funds on the balance sheet, establishes accounting standards, etc.
Russian legislation provides forinsurance deposits of individuals in case the bank revokes the license, the amount - up to 1 400 000 rubles, while under insurance also falls on the percentage of the deposit accumulated at the time of the revocation of the license. For legal entities, this provision of the law is invalid.