The main difference between commercial banks and the central bank. How does a commercial bank differ from a state bank? Methodological Requirements for Determining the Essence of a Central Bank
The main institutions providing credit are banks. Banks- financial institutions that accumulate and store funds, provide loans, carry out money transfers, as well as other operations in the financial markets. The set of interconnected banking institutions operating in the country make up the banking system. The banking system is an organic and integral element of the economy. This means that the functioning of banks should be considered in close connection with all processes taking place in the economic life of society.
Most market economies have a two-tier banking system. The first level is the central bank and its institutions. Historically, central banks have emerged as a result of centralizing money issue (issuing banknotes) in reliable banks. Such banks are called emission banks. At the end of the XIX - beginning of the XX century. in most countries, the issue of paper money was concentrated in one bank, which was called the central issuing bank, and then simply the central bank. It is usually held by a government agency. As the banker of the government, the central bank acts as its cashier and creditor, and accounts for the government and government departments are opened in it. The central bank, as a rule, carries out the cash execution of the state budget. Government revenues from taxes and loans are credited to an interest-free treasury (ministry of finance) account with the central bank, from which government spending is covered. The functions of the central bank are as follows:
Issuing money. This is one of the most important functions. Although in modern conditions cash is less important than non-cash, the issue of banknotes from the central bank retains its importance, since cash is still required for a large part of payments;
Keeping the gold and foreign exchange reserve of the country;
Providing loans and performing settlement transactions for government agencies;
Accumulation and storage of cash reserves of commercial banks. Each bank is obliged to keep an amount in a reserve account with the central bank in a certain proportion to the amount of deposits;
Lending to commercial banks. Here you can draw such analogies. If firms, organizations and individuals are credited by commercial banks, then for the central bank the clients are commercial banks;
Regulation and supervision of the activities of commercial banks and other credit institutions. The Central Bank has the right to issue and revoke licenses of commercial banks;
Monetary regulation (jointly with government).
The capital of the Central Bank of the Russian Federation is fully owned by the state. The tasks and functions of the Central Bank of the Russian Federation are formulated and enshrined in the Constitution of the Russian Federation and the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”.
The second level of the banking system is made up of commercial banks. Commercial Bank- a universal type of bank, engaged in a wide range of operations, the most important of which is the provision of loans to industrial, trade and other enterprises mainly at the expense of funds attracted in the form of deposits. All over the world, commercial banks - the most important link in the banking system - concentrate the bulk of credit resources and carry out a wide range of banking operations and financial services for legal entities and individuals. Commercial banks can be classified according to a number of characteristics.
By the nature of their ownership, commercial banks are state, joint-stock, cooperative, private, municipal, mixed. In industrialized countries, the predominant form of ownership of commercial banks is joint stock.
By the nature of the operations performed, they distinguish between universal and specialized commercial banks. Universal banks perform a wide range of operations and services. Versatility means a type of banking activity that is not limited by sectors of the national economy, the composition of clients served, the number of transactions carried out, and regions. Specialized commercial banks carry out one or a small number of banking operations. These include investment, mortgage, savings, innovation, insurance and other banks. Investment banks carry out operations for the issue and placement of securities on the stock market, while receiving income; they use their capital to lend to various enterprises and entire industries. Mortgage banks specialize in providing long-term loans secured by real estate. Savings banks attract free funds of the population, store savings, carry out non-cash payments, provide loans to the population, carry out settlement and monetary operations to service the population, including transactions with securities. Innovative banks carry out lending at all stages and stages of the innovative process of creating and implementing various innovations and scientific and technical developments. Insurance banks raise funds by selling insurance policies. They invest the received income, first of all, in bonds and shares of other companies, government securities, and also provide long-term loans to enterprises and the state. At the present stage, there is a tendency towards universalization in the field of activity of commercial banks, which is explained by the influence of competition. This is reflected not only in an increase in the number of services offered to customers, but also in a qualitative change in the structure of transactions, an increase in the volume of transactions with securities and a decrease in the share of savings loan operations.
According to the sectoral principle, commercial banks can be divided into industrial, agricultural, construction, trade, etc. In Russia, for example, these are Neftekhimbank, Electrobank, Rosselkhozbank, Promstroybank, etc. The main functions of commercial banks:
Mobilizing temporarily free funds and converting them into investments. Banks accumulate cash income and savings in the form of deposits. The depositor receives remuneration in the form of interest or services provided by the bank. Savings concentrated in the form of deposits are converted into loan capital used by the bank to provide loans to enterprises and entrepreneurs. The use of credit ensures the development of the productive forces of the country as a whole. Borrowers invest in expansion of production, purchase of real estate, consumer goods. As a result, with the help of banks, savings are converted into capital;
Lending to enterprises, government and population. Direct lending of free funds by their owners to borrowers in practical economic life is difficult. The Bank acts as a financial intermediary, receiving funds from end creditors and giving them to end borrowers;
Issue of so-called credit money into circulation. This feature is specific and distinguishes commercial banks from other lending institutions. The modern mechanism of money issue is associated with two concepts: banknote and deposit issue. Banknote issue is carried out by the issuing bank (central bank). Commercial banks carry out a deposit issue - the issue of credit instruments that are formed as a result of issuing loans to a client. The money supply increases when banks lend to their customers and decreases when loans from banks are repaid. At the same time, the economy needs the necessary, but not excessive amount of money; therefore, commercial banks operate within the limits of the restrictions provided by the state, represented by the central bank;
Making settlements and payments on behalf of clients. Most of the settlements between enterprises are carried out by bank transfer. Acting as intermediaries in payments, banks perform transactions for their clients related to settlements and payments;
Emission and constituent activity. This activity involves the issue and placement (sale) of securities by banks. Here banks become a conduit for channeling savings for productive purposes;
Consulting, provision of economic and financial information. Having the ability to constantly monitor the economic situation, commercial banks provide their clients with advice on a wide range of problems (on new investments, on registration of enterprises, on the preparation of annual reports, etc.).
There are usually four groups of banking operations; passive, active, banking services and banks' own operations. Passive operations- operations to attract funds to form the bank's resources. The bank's resources are formed at the expense of its own and borrowed (borrowed) funds. Initially, a certain equity capital is required to create a bank. Equity includes equity and reserve capital and retained earnings. Own funds make up an insignificant part of the resources of a modern bank. Basically, banking operations are based on borrowed funds. In economically developed countries, the ratio between equity and borrowed capital is at the level from 1:10 to 1: 100 (does not exceed 10%). The sources of borrowed funds that form the bank's capital are financial liabilities to the bank's customers (deposits, savings deposits), financial liabilities to other banks. The overwhelming majority of all banking resources are formed from the deposits of the bank's clients. Loans received from other banks are a regular credit transaction. Also, the source of funds for the bank is emission operations, which consist in the bank's mobilization of funds in exchange for issuing certain foam papers. Active operations are carried out by the bank for the purpose of profitable placement of attracted funds. The active operations of the bank include credit operations - operations to provide loans and loans, and stock transactions- various operations of banks with securities: purchase of securities, placement of newly issued securities among holders, purchase and sale of securities on behalf of a client, etc. Banking services are, as a rule, intermediary operations - collection, letter of credit, transfer, trust, leasing, etc. For their provision, clients are charged a special fee, called a commission. TO banks' own operations include operations related to the performance of the bank's functions: the purchase of banking equipment, the security of the bank, the payment of wages to employees, transportation costs, etc.
In the Russian Federation, the banking system is represented by Central and commercial banks, as well as other non-bank credit institutions. We can say that the banking system of the Russian Federation is a two-tier one. The upper level is represented by the Central Bank, and the lower level is represented by everyone else.
Central Bank of the Russian Federation
The Central Bank of Russia is the largest bank operating in Russia. He is the subject of monetary regulation. Its goals and objectives are regulated at the level of the Constitution and federal legislation.
All banks can be divided into two categories: emission banks, which is the Central Bank, and commercial banks. A feature of the bank of issue is that it has the right to issue national currency, as well as regulate the circulation of funds in Russia.
Commercial banks
This category of banks includes credit institutions that are created to serve legal entities and individuals, providing them with the opportunity to conduct various financial transactions. Banks attract deposits, provide loans, and also carry out settlement, payment and intermediary operations. In addition, commercial banks are involved in operations on the stock and bond market.
Commercial banks and the Central Bank differ in that the purpose of the former is to make a profit. The bank's profit is called margin. It is calculated as the difference between the interest rate on loans issued by the bank and the interest rate on deposits.
Services provided by commercial banks
The adjective "commercial" indicates that the bank was created for profit. But there are also banks that are more specialized in the provision of certain banking services.
The most common services provided by commercial banks are the following:
- providing loans to individuals and legal entities;
- carrying out foreign exchange transactions;
- car loans;
- mortgage;
- exchange of spoiled banknotes for unspoiled ones;
- creation and maintenance of settlement accounts for economic entities;
- operations with precious metals.
Objectives and goals of financial institutions
The tasks of the central and commercial banks are different. The Bank of Russia works in three main areas. First, he should try to maintain the stable functioning of the banking system, and also try to reduce as much as possible the rate of decline in the liquidity of the entire banking system in the country. Secondly, the Central Bank of Russia must ensure the reliability and efficiency of the entire payment system. The third task of the Central Bank is to maintain the purchasing power of the ruble, as well as to maintain a stable exchange rate.
At the moment, the Russian government has established a floating ruble exchange rate. Earlier, the Central Bank tried to keep the national currency rate due to targeted influence on the foreign exchange market.
Unlike various non-bank credit institutions and commercial banks, the Central Bank does not pursue any commercial goals in the course of its activities. The Bank of Russia is responsible for the development of the financial market in the Russian Federation, and also ensures its stability. Making a profit is not his main goal. This is the main difference between commercial banks and the Central Bank of the Russian Federation.
The importance of commercial banks
As mentioned earlier, the main task of the operating activities of commercial banks is to make a profit. This is precisely where their commercial interest lies. A commercial bank can be created on the basis of any form of ownership and is a business entity.
Commercial banks play an important role in today's economy. They are intermediaries and carry out the distribution of capital between industries and regions of the state. One of the main tasks of commercial banks is to ensure uninterrupted circulation of funds and capital in the state. Also, this category of banks is responsible for providing loans to industrial enterprises, the state and the population. In addition, commercial banks create conditions for the accumulation of funds of organizations and citizens.
Functions of the Central Bank
For the reason that commercial banks and the Central Bank pursue different goals in their activities, their functions are also different. To solve the tasks assigned to the Central Bank, it performs the following functions:
- storage of gold and foreign exchange reserves;
- accumulation and storage of reserves of credit institutions;
- control over credit institutions;
- issue of credit funds;
- lending to commercial banks;
- monetary regulation of the sector of the economy.
There are many methods to accomplish these functions. The Bank of Russia has the right to change the rates of required reserves of banks and carry out market transactions. Such operations include the purchase and sale of government bonds, bills of exchange and other securities.
Also, the Central Bank has the right to change the size of lending rates. This task is being implemented within the framework of credit regulation. Another important area of activity is the development of an exchange rate policy. All of the above methods are usually called general, since they have an impact on the activities of all commercial banks, as well as on the credit capital market.
In addition to general methods, selective ones are also distinguished. Their application is aimed at regulating certain types of loans (annuity or consumer loans, for example). Also, these methods can focus on providing loans to a variety of industries.
Examples of sampling methods are credit ceilings (limits), which are direct restrictions on the amount of loans that can be provided by certain banks in the Russian Federation. The second example of selective methods is the regulation of the conditions under which certain types of loans are issued. The central bank can set the difference between the rates on loans and deposits.
"Bank of banks"
The Central Bank does not cooperate with entrepreneurs and the population of the Russian Federation. Its main clients are commercial banks, which are intermediaries between the Central Bank of the Russian Federation and economic entities.
The central bank keeps cash from commercial banks. This money is called reserves. Historically, the reserves were intended to make the redemption of deposits. The minimum reserve in relation to the amount of liabilities on deposits is established by the Bank of Russia.
As a "bank of banks", the Central Bank of the Russian Federation is the body that regulates the entire payment system in Russia. Under his responsibility is the creation and organization of interbank settlements, coordination and regulation of settlement systems. The Central Bank is the center of the entire banking system of the Russian Federation.
Functions of commercial banks
The main functions of the Central Bank and commercial banks differ significantly. If the work of the Central Bank is more of a regulatory nature, then the activities of commercial banks are associated with the redistribution of monetary resources and the stimulation of savings.
The main function is loan mediation. The bank is engaged in the redistribution of money that can be released in the process of capital turnover of enterprises and income of individuals. The redistribution of funds is carried out horizontally, that is, from the lender to the borrower. There are no intermediaries in this area. The payment for the use of capital is set under the influence of supply and demand.
The second function of commercial banks is to stimulate the creation of savings in the economy. In theory, it is the funds of commercial banks that should make up the bulk of the money intended for reforms in the economic sector.
The main incentive to create savings is the increase in deposit rates. In addition to them, guarantees of the reliability of placing the accumulated funds in the bank can act as an incentive. The third function, which is performed by commercial banks, is to mediate payments between economic operators.
Varieties of commercial banks
The economic role of commercial banks is growing every year. This is reflected in the fact that their areas of activity are expanding, as well as new financial services appear. There are banks in the world that provide their clients with more than three hundred services.
Banks can be classified according to various criteria. Depending on how the authorized capital is formed, commercial banks can be created in the form of joint stock companies or LLCs. In addition, they can be created with the participation of foreign banks or foreign capital.
Based on the types of operations that are performed by commercial banks, they are divided into universal and specialized. According to the territory of their activities, commercial banks can be divided into federal and regional.
Joint-stock commercial banks
This category of banks is the most widespread in the world. The first joint-stock bank on the territory of the Russian Federation appeared in the middle of the 19th century in St. Petersburg. Joint-stock banks can be divided into open joint-stock companies and closed ones. Anyone can buy and sell OJSC shares. The subject matter of transactions with CJSC securities is significantly limited.
The largest Russian commercial banks are Sberbank, VTB, Alfa-Bank, FC-Otkritie and Gazprombank. These banks are the most profitable in the Russian Federation. Recently, Tinkoff Bank is gaining popularity. Its feature is the complete rejection of branches. All transactions are carried out on the Internet. The bank has a large number of partners, in the terminals of which you can withdraw cash from a bank card.
Bank licenses
A banking license is a state license that is issued to a commercial bank and gives it the right to conduct various banking operations. First of all, we are talking about the fact that the document allows you to attract customers' money as deposits, issue loans and carry out settlement and payment transactions by opening bank accounts.
In the Russian Federation, the Central Bank is responsible for issuing a permit to a commercial bank. A commercial bank is allowed to conduct banking operations only in accordance with the obtained license, which is issued by the Central Bank in accordance with the procedure established at the legislative level.
The license must be registered in the register. It indicates all the operations that can be carried out by the bank, as well as the currency in which these operations can be carried out. The validity of the document is unlimited, however, the Bank of Russia may revoke licenses from commercial banks for violation of certain conditions of business.
Relationship between the Central Bank of Russia and commercial banks
The main difference between the Central Bank and the commercial one is the controlling role of the former. It carries out the functions of general regulation of the activities of each individual commercial bank.
The Bank of Russia uses all economic methods of management. And only in the case when their use is not able to ensure the achievement of the desired effect, the Central Bank can use administrative methods of management in the process of regulation. The relationship between the Bank of Russia and commercial banks that operate on the territory of the state are determined by the current banking legislation.
In order to regulate commercial banks, the Central Bank can increase or decrease the minimum required reserve rates, which are placed by commercial banks in the main bank of the state. Also, the Central Bank of the Russian Federation provides loans to commercial banks and can change their volumes along with interest rates.
The amount of the balance of funds, which is subject to reservation with the Central Bank, is determined on the basis of data from the balance sheet of commercial banks. Their balance sheet should include all the funds that were attracted as loans. The relationship of an economic nature between commercial banks and the Central Bank of Russia is that the latter provides loans to commercial banks, and they, in turn, can issue loans to business entities.
The difference between commercial banks and the Central Bank of the Russian Federation
Many people now turn to commercial banks for all sorts of services, such as loans, deposits or transactions with securities and precious metals. But there is also such an organization as the Central Bank, which has slightly different functions. And although all these organizations are called banks, there are still differences in them and they are significant enough to separate them into different categories of organizations.
The central bank is a state body designed to establish and regulate the state's credit system. He is in charge of the activities of all commercial banks in the country, since the settlement accounts of these particular entities of the system are administered by the Central Bank. Zharkovskaya, E.I., Arends, I.U. Banking / E.I. Zharkovskaya, I.U. Arends. - Moscow: Omega-L, 2010. He develops a system of accounting and reporting principles for all credit institutions, and they, in turn, are obliged to obey them. If necessary, this state body can issue loans to commercial banks for their financial and business operations. In addition, the Central Bank and only it is authorized to issue or issue banknotes.
Thus, we can say that the Central Bank dominates all commercial banks, develops various regulations and principles for the conduct of their activities by banks, and also controls their work, conducting various checks and analyzing reports. In turn, the activities of commercial banks are aimed at meeting the interests of the population and legally registered economic entities of the country. They can issue loans, accept deposits, exchange currency, sell precious metals.
The difference between a Central Bank and a commercial bank is as follows:
Only the Central Bank has the right to issue banknotes of the state;
The Central Bank contains settlement accounts of commercial banks, and commercial banks - accounts of legal entities and individuals;
The central bank develops regulations on accounting and reporting in commercial banks;
The central bank issues loans only to commercial banks, and the latter can issue loans to the population and legal entities, as well as carry out deposits and various transactions with valuable things, for example, currency or metals.
The banking sector of the Russian Federation and prospects for its development in modern conditions
The fortunes of large commercial banks have strengthened after the economic crisis of 2009 based on the results of 2013. As a result of active growth in lending to large businesses in 2014, this trend continued. As a result, the prospects for the development of the banking sector in 2015 will be accompanied by an increase in the concentration of assets in large credit institutions (Fig. 1).
Figure 1. The share of a group of banks in total assets,%
In the total assets of the banking sector as of January 1, 2014, the main share of 51.4% falls on state-controlled banks. The share of large private banks was 28.8%, and the share of banks with foreign capital was 15.3% (banks under significant influence of residents of the Russian Federation - 5.9%). The share of medium and small banks in Moscow and other regions accounted for only 2.3% of banking sector assets. Thus, the share of commercial banks controlled by the state and large private banks in 2014 is growing and will continue to grow according to the forecasts of the Central Bank, while the share of banks controlled by foreign capital will decline.
In 2014, leading specialized retail banks focused on maintaining business profitability rather than growth rates, resulting in the development of cross-selling non-credit products within the existing network, as well as optimization of business costs, which include the closure of non-profit divisions. , staff reduction, increasing the efficiency of banking networks. As a result of the expected shift in the priorities of large banks towards large businesses, small banks were able to more actively lend to small and medium-sized businesses; therefore, the share of medium and small banks is decreasing, but insignificantly. The tender lending market can provide support for such commercial banks, that is, the government order market is far from being saturated with credit resources, the annual volume of which is 10 trillion rubles.
The systemic liquidity deficit will remain in the banking sector. Regional banks will remain the most vulnerable, as the flow of clients to large banks, which was observed at the end of last year, continued in 2014. Additional pressure on the state of the banking system is created by the largest state-controlled banks, which channel excess funds into retail lending, while small banks are forced to maintain excess liquidity. Refinancing also continues to be distributed unevenly throughout the system, since more than 70% falls on the largest banks with state participation (Fig. 2), and the interbank lending market in periods of unstable economic situation practically closes for small banks.
Figure 2. The share of banks in funds attracted from the Central Bank of the Russian Federation
The share of the Central Bank of the Russian Federation in banks' liabilities in 2014 will remain high both due to the expansion of the volume of repo transactions and lending under 312-P (Fig. 3), and due to the expected increase in demand for new instruments, such as refinancing against pledge of investment loans.
Figure 3. Funds received by credit institutions from the Central Bank of the Russian Federation
Against the backdrop of a slowdown in key segments of the lending market, a tense liquidity situation, as well as increased banking regulation and supervision, which primarily affects retail lending, transactions with related parties and suspicious transactions, the sector's profitability will continue to decline in 2014-2015. At the end of 2013, the average profitability in the banking sector fell to 15.2%, in 2012 it was 18.2%, and its decline also affected small credit institutions and large banks (Fig. 4). In the current situation, many small regional banks have already been forced to sacrifice their profitability in order to maintain a sufficient level of liquidity in the event of a new wave of customer flows to large banks.
Figure 4. Profitability of commercial banks in 2012-2013
In the first half of 2014. the increase in overdue debt on loans, deposits and other funds placed by banks amounted to 18.5%, while in the same period in 2013 it amounted to 6.6%, the share of overdue debt in the total volume of bank loans, including corporate and retail portfolios, and interbank lending , amounted to 3.8%, at the beginning of the year it was 3.5%. In connection with the growth of assets of the banking sector and a decrease in profit from 0.49 trillion rubles. up to RUB 0.45 trillion compared to the same period in 2013 the return on assets decreased from 2.1 to 1.7%. Return on equity as of July 1, 2014 amounted to 13.6%, in 2013 16.6%.
The decline in profitability will have a huge impact on the state of the retail banks. The impact on their profitability in the coming years will continue to be exerted both from the side of income, which include a slowdown in the portfolio and a decrease in the income base, the planned limitation by the Central Bank of the Russian Federation of the maximum interest rate on loans, high cost of funding; and on the part of expenses, which may be caused by an increase in the unit costs of maintaining the infrastructure created at the stage of growth, an increase in the cost of reserves due to the deterioration of the portfolio and new requirements of the regulator. In turn, the interest margin will decrease synchronously, and the key factors of the “stratification” in profitability will be the dynamics of asset quality, efficiency in optimizing personnel and infrastructure costs, the volume of non-performing assets, including the dynamics of the “liquidity cushion”.
Thus, the banking sector is a dynamically developing part of the economy, subject to both internal and external changes associated not only with the solvency of existing and potential customers of banking services, profitability and liquidity of commercial banks, but also with many macroeconomic factors that have a direct impact on and an indirect effect on his condition. The banking sector is one of the first to react to the political changes taking place in the country.
The sanctions imposed against Russia by the EU countries and the United States in connection with the current situation in Ukraine and the annexation of Crimea and Sevastopol to Russia during 2014 also have a direct impact on the state of the banking sector. On the one hand, this can give a new impetus to maintain the reputation and state of state banks, contributing to the development of lending to the most important sectors of the economy by domestic banks, but at the same time they are deprived of foreign investors, and the impact of these sanctions can facilitate the withdrawal of funds from offshore zones, and, consequently , and replenishment of the budget of our country through taxes, on the other hand, the consequences of their introduction may appear over the next few years.
According to the Bank of Russia, in general, the effect of the imposed sanctions is limitedly negative. The rise in funding costs, which is a consequence of restricting access to external financial markets for Russian banks, as well as a possible deterioration in the financial condition of the borrowing enterprises subject to sanctions and the risks of increased volatility in exchange rate dynamics, lead to a limitation of the scale of the banking system itself and a deterioration in the quality of credit portfolios of commercial banks. In addition, many banks may face an increase in requests for debt restructuring from large enterprises, as their portfolios are deteriorating.
Under the current conditions of tightening regulation of their activities by the Central Bank of the Russian Federation and strengthening control over suspicious transactions and transactions with related parties, commercial banks will have to adjust their development strategies or completely change them in order to maintain profitability amid a slowdown in the main lending segments. The condition of small commercial banks is also hugely influenced by the exposure to panic on the part of lenders, since access to short-term liquidity in the interbank lending market is limited for them, moreover, the experience of past economic crises confirms that streams of saving liquidity remain in large banks, without reaching regulator to small and medium-sized credit institutions.
on lending, organizing settlements in cash and non-cash forms, store clients' funds, issue means of payment, but also manage the country's gold and foreign exchange reserves, analyze and forecast the state of the national economy, perform supervisory and control functions. Working in the field of economic relations at the macro and micro levels, central banks are involved in the logistics and operation of facilities and equipment entrusted to them, have their own technology centers and information systems, collect and process relevant information.The combination of economic, organizational and logistical operations to a certain extent veils the essence of the central bank, making it a "many-sided" institution.
Our task is to find the main thing that makes it possible to distinguish this institution from other economic entities in all the variety of activities carried out by the central bank.
Let us recall a number of general requirements usually imposed on the analysis of the essence of economic phenomena. There are several of them.
Methodological Requirements for Determining the Essence of a Central Bank
In order to answer the question, what is the essence of the central bank, it is necessary, firstly, to determine what, along with its general features, is its specificity, secondly, what constitutes the basis of its activities, and thirdly, what is the structure of the central bank ... Only by answering these three questions, we have the right to clarify and define the essence of the central bank.
The analysis of the essence presupposes, first of all, the identification of those specific features that would distinguish the considered phenomena (object, process) from others. Previous analysis has shown that central banks perform a fairly wide range of operations. What does this mean?
Common signs of a central bank
First of all, that central banks are mainly related to the sphere of economic relations. Therefore, the central bank can be characterized as economic institute.
In the arsenal of the central bank there are predominantly economic methods of regulation; its monetary policy is based on the use of money, credit, interest, and the exchange rate as tools to stimulate economic development. Functioning in the sphere of commodity-money relations, the central bank turns out to be dependent on the degree of their development, their curtailment inevitably leads to the abolition of the bank. At the same time, it must be admitted that this cannot constitute its essence, because other economic entities are also engaged in economic activities. Our task in revealing the essence consists in something else - not in showing the universal, characteristic of a multitude of phenomena, but in revealing the special, the specifics of the activity that distinguishes the central bank from other institutions.
Another important property is noticeable in the list of operations performed by the central bank: for the most part, they are all related to exchange. Therefore, on full grounds, the central bank can be called exchange institution serving the transition of material goods from one economic entity to another. However, it cannot be argued that only the central bank functions in this area of economic relations. Along with it, other organizations, including trade and intermediary organizations, function in the exchange phase.
The central bank's activities in the exchange of products and services, therefore, cannot be classified as specific activities. The characteristic of the central bank as an institution of exchange expresses an important aspect of its activities, where, nevertheless, not its specificity is manifested, but one of the parties inherent in the activities of other economic entities.
In a sense, the central bank is trade institute... By accumulating funds of clients (commercial banks) on their accounts, central banks redistribute them on a repayable basis, lending to the temporary needs of those banks that need temporary monetary assistance in the form of refinancing.
This applies equally to the characterization of the central bank as a nationwide institution.
The central bank as a nationwide institution
Indeed, it must be admitted that the activities of the central bank are manifested mainly at the macro level of economic relations. Providing a rational organization of monetary circulation, non-inflationary development, it creates conditions for the preservation of the value of money and thereby for the social development of the entire society and its individual citizens.
At the same time, as a legal entity, the central bank carries out separate transactions with specific other economic entities. The microlevel of economic relations is fully manifested here, but the central one, unlike other banks, works not for itself, but for the economy as a whole. This gives us the right to characterize his activities as activities national institute... It is not without reason that in some countries it is called a national bank (for example, the Austrian National Bank), a bank of the corresponding country (for example, the Bank of England, Bank of Russia, Bank of France), a state bank (for example, previously the State Bank of the USSR), thereby emphasizing its national character. activities.
For all the importance of this property of the central bank (and here emphasizing by its name the attachment of its policy to the policy of the center, federation, country and nation as a whole), it does not, however, act as the quality that is inherent exclusively in its activities. It is known that in almost all countries there are various kinds of institutions that pursue the policy of the state as a whole (for example, various kinds of investment and pension funds). There are also banks, called state credit institutions, whose primary task is to support the interests of the state as a whole, and not of a separate legal entity. Individual banks may not have the status of a state bank in their name (for example, banks for reconstruction and development), but one way or another they implement the policy of the state as a whole and its individual regions and industries (in the latter case, for example, banks supporting the development of agriculture ).
Unlike these banks, which act as business government institutions, the activities of the central bank are not of a commercial nature. The central bank is non-profit organization.
According to another point of view, the central bank is among the commercial organizations engaged in entrepreneurial activity and receiving income from it.
Of course, central bank activity unfolds in the sphere of economic relations. And like any economic institution, it provides economic entities with its products and services and, like commercial banks, receives a certain payment for them that compensates for its costs. In this part, such activities can be considered as a kind of entrepreneurial activity. However, unlike commercial organizations, making a profit does not serve as the fundamental motive, the goal of the central bank.
The "entrepreneurial" activity of the central bank is also in the sense that, while functioning as a subject of economic relations, it certainly does something, does something, and therefore is considered an enterprise. At the same time, the central bank, of course, cannot be called an enterprise in the generally accepted sense of this concept, which reflects the activities of an industrial, agricultural, construction enterprise that produces a material product, or a commercial one that exchanges the products of commodity producers.
On the other hand, the central bank produces a product (in this sense, as noted, it is an enterprise), of course, it "trades" money (and in this sense it is an enterprise). But the activity of the central bank is a special kind of activity.
The definition of the central bank as an enterprise hardly brings us closer to revealing its essence, because in the economic space there are many different enterprises, they all produce something; in the fact of this kind of "entrepreneurial" activity, we can hardly notice such a property that is inherent exclusively in the central bank and does not manifest itself in other economic entities. The point is not that a certain economic entity necessarily acts, undertakes, but what at the same time it produces.
The essence of the central bank can be found not in giving it the title of "enterprise" as one of many other economic agents, but in the specifics of what it produces.
The characterization of the central bank as an enterprise can only emphasize the productive nature of its activities, the purpose of which, as noted, is not to make a profit. One cannot but take into account the fact that the central bank is not in its essence a kind of shop, a base for trade in goods. The loans that he provides, undoubtedly, serve the exchange, the redistribution of material wealth. Lending activity is not actually trading activity, where, in contrast to trade, it is not the seller and the buyer who act, but the lender and the borrower. Unlike trade that serves exchange, credit serves a "time-divided exchange", when a certain (sometimes quite significant) period of time elapses between the act of transferring the loaned value and receiving the equivalent. The essential difference between trade and credit lies in the fact that when goods are sold, their owner changes, property is transferred from the seller to the buyer. With a loan, the ownership of the resources transferred by banks for temporary use remains with the lender, the borrower receives the loaned value only for temporary use with the obligation to return it.
The specificity of the central bank lies in the specificity of its product
The product of the central bank is the result of its activities, the result, firstly, of the collective work of the bank's staff as a whole, and not of its individual employee. The result of this activity, secondly, reflects the variety of directions in the functioning of the central bank.
At the same time, it is important to keep in mind that when disclosing the essence of a central bank, it is necessary to consider its activities at the macro level, in relation to the economy as a whole. It is known that some of its operations (for more details, see Chapter 4 of this publication) may not be carried out at all in a certain period of time, but this does not stop it from being a bank. Disclosure of the essence of the bank requires an analysis of the totality of banking operations carried out over a long historical development.
In this regard, there is another position, according to which the central bank essentially ceases to be a bank as such. In this case, it is considered that central bank is a special, different economic entity that performs other tasks that distinguish it from commercial banks. Of course, the activities of the central bank have their own characteristics. It would be pointless to deny this. At the same time, its activities, while possessing indisputable features, are nevertheless based on banking, the activities of banks as such. central bank- this is a special type of bank, and not a separate new structure that has a separate essence.
The core of the central bank
Like any commercial bank, the central bank performs a number of fundamental operations that constitute the essence of the bank as such. From the standpoint of the general theory, the bank, over a long historical development, has become such as a result of the consolidation of monetary transactions with it, which constitute the basis of its economic turnover. Just like any bank, it can lend, make settlements, accept funds from other economic entities for storage, and issue means of payment. The basis of the bank's activity as such lies in the performance of these monetary operations by it. These activities are the main ones.
It is known that the ratio, structure of operations in the general balance sheet of banks can be different. A bank, for example, at a certain stage may not accept deposits from individuals or not open accounts for its employees in its divisions, minimize the issuance of new loans, from this, however, it does not cease to be a bank. The overall result is important here: in the bank's balance sheet, monetary transactions form the basis of its economic turnover.
The central bank does not have its own essence, isolated from the bank, but the range of its operations is characterized by specific features that distinguish it from a commercial bank.
If you look at the central bank from this point of view, then its difference from a commercial bank will be marked quite noticeably. Much will depend on the type of central bank. There are two of them.
Types of central banks
The central bank of the first type is characterized by the combination of lending with operations for issuing means of payment, including the issuance of cash into circulation. This was the case, for example, in the USSR, when the State Bank of the USSR played the role of a central bank, was a single credit and settlement center, and it had the right to issue money into circulation. In this case, the state adhered to the "single pot" rule, according to which the main bank of the country was allowed to print money, put it into circulation and use it as a resource for lending to economic entities.
In practice, this was only a modification of the model that existed in the Russian Empire until 1917, and was also adopted by some other European countries for a certain historical period. Only gradually did these countries switch to a different model.
The central bank of the second type is characterized by the division of the "single boiler" into two components: the issue business was separated from the lending activity. Commercial banks started lending to the non-financial sector. By itself, lending by central banks of the second type is no longer as widespread, in contrast to commercial banks, where lending activities, as a rule, are predominant.
While remaining a monetary institution, the central bank of the second type changes the ratio between operations, shifts them towards performing most of the monetary operations, including by issuing cash into circulation. Of course, the central bank, due to its special specialization associated with servicing the macrolevel of the economy, begins to perform other operations that distinguish it from a commercial bank, but from this it does not become something different in its essence from a bank as a single economic entity.
Differences between a central bank and a commercial bank
And yet the central bank, being a type of bank, differs from its other varieties. The difference, as already noted, is that it works at the macro level of economic relations, serves the general national economic needs, does what no other bank does by issuing cash to the economy.
The difference between a central bank and a commercial bank can be found in other parameters.
By target orientation... Earning profit, as already noted, is not the target motive of the central bank's activities. Unlike the latter, a commercial bank, on the other hand, works for profit.
By type of property... The capital of central banks, as will be shown later, is most often owned by the state, while for commercial banks in a market economy, the most characteristic is the joint-stock form of ownership of capital.
By number and capital base... Each individual country has its own single national central bank; commercial banks, depending on national traditions, the scale of the economy and the size of the territory, there can be tens, hundreds and even thousands. Naturally, therefore, according to the capital base, commercial banks are divided into large, medium and small credit institutions. There is no need to divide central banks by the amount of capital, since there is only one central bank in each individual country.
By areas of activity... Commercial banks, carrying out a certain set of services, can be as universal and specialized... A similar criterion for the classification of central banks has been changed, because by its status, the powers delegated to it, it acts as a universal monetary institution that performs a wide range of operations and services.
By industry focus... Commercial banks often focus on serving a specific sector of the economy. They emphasize their commitment to industry-specific activities even in the name. In different countries, for example, foreign trade, export-import, industrial, agricultural, oil, gas, marine, aviation and similar banks operate, at the base or the main clients of which are enterprises of the corresponding sector (sub-sector) of the economy. Of course, central banks, whose activities provide for general national economic needs, cannot be sectoral in nature.
By regional basis... According to the nature of their business, central banks are national institutions serving economic entities throughout the country. In the context of the tasks assigned to them, they also enter into international monetary relations... Commercial banks can be divided into regional (local), city, interregional, international.
By clients... Clients of both central and commercial banks are legal entities and individuals... The fundamental difference, however, lies in the fact that central banks do not directly serve commodity producers (except for cases when there are no institutions of business banks in a particular locality), the clients of the central bank are commercial banks that serve specific agents of the economy, government, military and others. institutions (for more details, see Chapter 4 of this publication).
According to the legislation... Most often, central and commercial banks are governed by different types of legislation. Central bank activities is the scope of public law, commercial bank activity- the scope of commercial law, special laws governing the activities of banks as commercial structures.
By the nature of subordination (accountability) central banks as subjects representing state power in the monetary sphere, most often accountable only to the legislature(parliament, State Duma, etc.), to which they periodically report on the results of their activities. Commercial banks are accountable only to their shareholders, before which at the annual meeting they announce the results of their work for the reporting period.
Legal support for the start of its activities... The start of the central bank is established act of supreme state power... The State Bank of the Russian Empire, for example, was established by the Decree of the Russian Empire, the Central Bank of the Russian Federation (Bank of Russia) - by the Decree of the President of the Russian Federation. Napoleon, for example, reorganized the Bank of France by law, making it the bank of banks. The creation of the Bank of England was approved by the Tonnage Act.
The beginning of the activity of a commercial bank is marked by obtaining a license from the central bank. There may be several such licenses, including a license to carry out foreign exchange transactions.
Appointed by senior management... Since the central bank is of national importance and most of its capital is more often government-funded, the head of the central bank is appointed and approved by the president and the highest legislative body of the country (see chapter 5 of this publication). Commercial bank manager appointed by its shareholders.
Supervision and control... Control over the work of the central bank is carried out at the state level. In the Russian Federation, for example, an audit organization with a high professional reputation is appointed to audit the activities of the Bank of Russia. On certain issues of activity, the Bank of Russia may be audited by the Accounts Chamber of the Russian Federation.
Supervision and control over the work of commercial banks can be carried out either by specially authorized government agencies or by central banks (as, for example, it is customary in the Russian Federation).
Central bank structure
It was noted earlier that the question of the essence of the central bank also requires disclosure of its structure. Of course, we are not talking about the structure of the bank's management apparatus, this is a special conversation (see Chapter 5 of this publication). Bank structure from the standpoint of its essence, it is such a structure of it that enables it to function as a specific institution. The structure requires a set of elements that ensures the functioning of the bank as a whole.
In the structure of the central bank, like any other bank, there are four blocks.
The first block is banking capital, which in most cases reflects the capital of national central banks as part of the capital allocated by the state when organizing a given institution. In the future, it will be shown that the capital of the central bank can be funds not only allocated from the resources of the corresponding state, but also formed at the expense of shareholders, including legal entities and individuals, without the participation of the state. Unlike the capitals of commercial banks, separated from the capitals of industry and trade, the capital of the central bank is most often formed with the help of the resources of the state budget.
The second block covers the specific activities of the central bank, in the aggregate, performing monetary operations that form the basis of its economic turnover, and, unlike commercial banks, issuing cash into circulation.
The main principle of the central bank's activity is to protect the economic interests of the state, primarily in the sphere of regulating monetary circulation. At the same time, activities of this kind are independent.
Acting as a legal entity in relations with its clients (primarily commercial banks), the central bank is guided by the principles of mutual interest, mutual obligation, responsibility, etc.
The third block is a special group of people with knowledge and skills in the field of banking, regulation of monetary relations. Central bank staff are civil servants.
The fourth block, which goes beyond economic theory, is often called production, because it covers banking technology, buildings, structures, communications and communications, information systems, and certain types of production materials. Of course, without this block, just as without the aggregate of each separate other block, the structure would be incomplete, the central bank would not be a whole phenomenon capable of specific functioning.
conclusions
So, the analysis showed that the central bank cannot be called an enterprise in the conventional sense of the word. The term "enterprise" not only does not bring us closer to revealing the essence of the central bank, but, on the contrary, separates it from the knowledge of its specific properties, without distinguishing it from the category of other economic subjects. The initial word expressing the social nature of the central bank's activity is "institution".
However, we cannot put an end here, since for all the importance of the original term, it does not yet sufficiently express the specificity, basis of activity and structure. It is from these three components that the understanding of the essence of the central bank is ultimately formed.
The analysis also showed that there can be no separate entity of the central bank outside the entity of the bank as a whole. The central bank as a bank is a monetary institution. The central bank also has some features that distinguish it from a commercial bank. Remaining essentially a bank, in its activity it acquires certain features that separate it from other types of bank. At the micro level, while providing services to commercial banks and other economic entities, the central bank is increasingly shifting its activities into servicing the macro level of monetary relations... The basis of its activities is the implementation of public, national interests in the field of regulation of cash and non-cash money turnover. As we will see later, central banks are mainly focusing on strengthening the stability of the national currency, strengthening the exchange rate, and countering inflation.
All this allows us to define the central bank as a public monetary institution that regulates money circulation in cash and non-cash forms in the public interest.
Central bank operations
Within the framework of the functions established by law and the achievement of the set goals and objectives, the Central Bank of the Russian Federation:
- conducts operations to release money into circulation;
- carries out credit, settlement, cash and deposit operations;
- buys and sells government securities on the open market;
- buys and sells bonds issued by the Bank of Russia and certificates of deposit;
- buys and sells foreign currency, as well as payment documents and liabilities denominated in foreign currency, issued by Russian and foreign credit institutions;
- buys, stores, sells precious metals and other types of currency values;
- accepts securities and other assets for safekeeping and management;
- issues sureties and bank guarantees;
- carries out operations with financial instruments used to manage financial risks;
- opens accounts with Russian and foreign credit institutions on the territory of the Russian Federation and the territories of foreign states;
- issues checks and bills in any currency;
- conducts other banking operations.
The operations performed by the central bank can be classified according to certain criteria (table).
Classification of types of operations of the central bank
| Criterion for the classification of central bank operations | Central bank operations |
| By nature | Banking and non-banking |
| By content | Economic, legal, technical, to ensure the internal security of the bank |
| By the nature of the work performed | Analytical, managerial, accounting, accounting, etc. |
| Activity planning | Strategic and tactical |
| By stages of implementation | Priority and follow-up |
| By the frequency of commission | One-time (one-off) and reusable (repetitive) |
| In relation to the national market | Domestic and international |
| By currency used | In rubles, in foreign currency, multicurrency |
| In relation to the bank of the bank | Active, passive, off-balance |
The Central Bank works at the macro level of economic relations, serves general national economic needs, does what no other bank does by issuing cash to the economy.
The difference between a central bank and a commercial bank can be found in other parameters.
By target orientation. Earning profit, as already noted, is not the target motive for the central bank's activities. Unlike the latter, a commercial bank, on the contrary, works for profit.
By type of property. The capital of central banks, as will be shown later, is most often owned by the state, while for commercial banks in a market economy, the most typical form of joint-stock ownership of capital.
In terms of number and capital base. Each individual country has its own single national central bank; commercial banks, depending on national traditions, the scale of the economy and the size of the territory, there can be tens, hundreds and even thousands. Naturally, therefore, according to the capital base, commercial banks are divided into big, average and small credit institutions. There is no need to divide central banks by the amount of capital, since there is only one central bank in each individual country.
By areas of activity. Commercial banks, carrying out a certain set of services, can be as universal, and so specialized. A similar criterion for the classification of central banks has been changed, because by its status, the powers delegated to it, it acts as a universal monetary institution that performs a wide range of operations and services.
By industry focus. Commercial banks often focus on serving a specific sector of the economy. They emphasize their commitment to industry-specific activities even in the name. In different countries there are, for example, foreign trade, export-import, industrial, agricultural, oil, gas, marine, aviation and similar banks, at the base or the main clients of which are enterprises of the corresponding branch (sub-branch) of the economy.
On a regional basis. According to the nature of their business, central banks are national institutions, serving economic entities throughout the country. In the context of the tasks assigned to them, they also enter into international monetary and credit relations. Commercial banks can be divided into regional (local), city, interregional, international.
By clients. Clients of both central and commercial banks are legal and individuals. The fundamental difference, however, is that central banks do not directly serve commodity producers (except in cases where there are no institutions of business banks in a particular locality), the clients of the central bank are commercial banks that serve specific agents of the economy, government, military and others. institution of the publication).
According to the legislation. Most often, central and commercial banks are governed by different types of legislation. Central bank activities - this is scope of public law,commercial bank activity - scope of commercial law, special laws governing the activities of banks as commercial structures.
By the nature of subordination (accountability)central banks as subjects, representing state power in the monetary sphere, most often accountable only to the legislature (parliament, State Duma, etc.), to which they periodically report on the results of their activities. Commercial banks accountable only to their shareholders, before which at the annual meeting they announce the results of their work for the reporting period.
For legal support of the beginning of its activities. The start of the central bank is established an act of the supreme state power. The State Bank of the Russian Empire, for example, was established by the Decree of the Russian Empire, the Central Bank of the Russian Federation (Bank of Russia) - by the Decree of the President of the Russian Federation. Napoleon, for example, reorganized the Bank of France by law, making it the bank of banks. The creation of the Bank of England was approved by a bill of parliament (Tonnage Act).
The beginning of the activity of a commercial bank is marked by obtaining a license from the central bank. There may be several such licenses, including a license to carry out foreign exchange transactions.
By appointment of senior management. Insofar as central bank is of national importance and most of its capital is often completed on a state basis, the head of the central bank is appointed and approved by the president and the highest legislative body of the country ... Supervisor commercial bank appointed by its shareholders.
For supervision and control. Control over the work of the central bank is carried out at the state level. In the Russian Federation, for example, an audit organization with a high professional reputation is appointed to audit the activities of the Bank of Russia. On certain issues of activity, the Bank of Russia may be audited by the Accounts Chamber of the Russian Federation.
Supervision and control over the work of commercial banks can be carried out either by specially authorized government agencies or by central banks (as, for example, it is customary in the Russian Federation).
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