Banking system of Russia in the global financial sector

Globalization of the world financial sector and transnationalism of the banking business have become at present the key factors for modification of the operating standards of the national financial service frameworks. In the context of the intensive globalization of the world’s financial sector the Russian state interests require to form the innovative banking system complying with the international banking standards and able to become a key factor for the development and renovation of the native industry and high-tech business.

In the context of the economic globalization and regionalization, a well-organized graded banking system with the nationally availabe components is a significant factor for the acceleration of industrial and business development [5, p.18]. At present the most important challenge of the current Russian banking system is to become integrated with the new architecture of the global financial and economic network. At that the financial globalization is an objective process affected the interests of the most states, including Russia, who has become its active participant since the beginning of 1990s.

Development of the current Russian banking system is influenced by the global trends of the financial sector set up: strengthening of the bank capital concentration process, revealing of its global and international nature, decrease in the number of independent banks, expansion of the acting banks network along with increase in the number of major banks and strengthening of their banking market powers, growing of the bank merge transaction scales both within the native banking system framework and internationally.

Significant changes in the external economic environment of banking activity, which are typical for a globalizing economy, require high flexibility from the Russian banking system. At that one of the main ways to increase the flexibility is a functional restructuring of the banking business along with its consolidation as a response to the changes in process and growing financial risks. The forming "new global economy" creates an effective trading platform for its activity – massive investments made by the global corporate capital (GCC), which become an essential source of income for global investors [4, p.463-464].

At present the Russian banking sector is being actively integrated into the global financial system, and that process is caused by both the need for extending of the banking service potential and the motivation to fatten the profits through entering the international financial markets. At the same time the Russian banking system faces the resistance to the entry of its financial institutions into the global financial and economic market, which are forced and politically motivated by the Western countries aiming at hindering of the Russian economy development.

Integration of the Russian banking system into the global financial system is carried out by means of establishing of the banks' subsidiaries, branches and representative offices, participating in the overseas banks' equity, cooperating with multilateral financial institutions, placing and raising of funds into the interantional markets.

Influence of the financial globalization process on the Russian financial market manifsted itself in diversification of the methods and tools, and in changing of the native banking system’s strategy, which resulted, among other things, in increasing of the overseas deposits volume and more active participation in international banking transactions [1, p.4].

Activation of the international business and trade, expansion of investment programs lead to a consistent consolidation of banks and diversification of their activity, to overall increase in the amount of financial transactions. Accordingly, accelerated integration of the Russian banks into the global financial and economic community becomes the dominant factor for transformation and development of the domestic financial sector.

Legal and administrative support provided by the Government of the Russian Federation to the native banks, which place the capital to the overseas markets, advances significantly their opportunity to become integrated into overseas financial sector, and contributes to the improvement of the ways and modes of interaction between the regulatory authorities and banks of different countries.

The Russian banks entering the global financial markets use a wide range of the forms of banking business organization: correspondent banking, independent conducting of foreign transactions through their operational divisions, participation loans, establishing of representative offices, overseas branches and subsidiaries, international holding, operating with offshore banking units. At the same time the Russian banks prefer representative offices as a primary form of the market development.

The Russian Federation national policy for the banking system development is aimed at improving of its quality, which enables it to operate successfully in the global financial sector. At that the domestic banking system is supported at the administrative and diplomatic levels. Thus, the Russian banking system acts as a creative factor in the context of international diplomatic system.

The current Russian banking system is developing and expanding its activities against the background of a snowball financial globalization. The arising direct investment counterflows, diversification, integration of global financial markets influence significantly the Russian financial sector [4, p/463-465]. The prospective strategy for the Russian banks is the universal one for transnationalism of their activity, which is about a bank's positioning as a more active world market player linking the capital source and its consumers. Consequently, the Russian banks aiming at transnationalism of their activity, shall maximum efficiently form and distribute their funds, as well as the capital of other financial and credit institutions and the capital of other agents of the global economic system so as to meet the demands of the Russian capital consumers.

A significant trend of the Russian banking system development is its integration into the global virtual market of banking services and the advanced IT solutions in the financial sector.

Facilitating of the Russian bank capital's entry into the overseas financial markets is an important part of the state policy of the Russian Government for the full support of the native industry and banking business. At present the leading banks in overseas financial markets development are Sberbank of Russia, Alfa-Bank, Gazprombank, VTB, Rosbank, Promsvyazbank. At the same time they all use diffenrent ways of being represented in the overseas financial sector - some established subsidiary banks, others operate through their branches or representative offices.

Growing globalization and internationalization of the financial sector in the world determines the enhanced international presence of the top Russian banks. "Thus, for example, the list of Alfa-bank's subsidiaries specialized in providing of both investment and commercial banking services to foreign partners, which before included Alfa Securities Ltd. in London and the financial group belonging to Alfa-Сapital Holding Company, was increased by a subsidiary Amsterdam Trade Bank in the Netherlands and Alfa Capital Markets in New York. "A subsidiary bank in the Netherlands with its capability to establish affiliates in any EU country opens to Alfa-bank new opportunities in servicing of the trade transactions between Russia and the EU countries, foreign transactions of the Russian customers and their Western partners in the sphere of trade finace, and implementation of common projects" [3]. Any Russian bank, seeking to operate efficiently on the international financial markets, shall own the capital of at least $1 billion, which fact, in its turn, encourages value creation.

In the context of the ongoing globalization processes in the XXI century the Russian banking system is being gradually integrated into the global financial system, cooperation of the Russian banking and investment institutions with the international financial institutions (IMF), World Bank, Asian Infrastructure Investment Bank (AIIB), BRICS Development Bank, etc.) is being extended.

The global financial market is of special interest for the Russian banks also for the opportunity to earn extra profit, to develop business and diversify banking risks by implementing various bank instruments and new financial technologies, to support consistently the domestic corporate customers integrated into the home markets of other countries. Entry of the Russian bank capital into the overseas finacial markets contributes to the increase in the domestic banks and companies' performance, which has a lonf-term positive socio-economic impact [2, p.213]. One of the paramount tasks of the Russian banks’ transnationalism - is to raise overseas funds for the native economy, which is being modernized.

The strategy for the Russian banking institutions' integration into the global financial system takes into account the multi-vector nature of global investment flows (world's stock exchanges NYSE in New York and LSE in London).

Thus, one of the priority challenges of the Russian banking system development is its integration into the global financial credit system against the background of the trend for the transnationalism of the financial sector. This enables to enhance the banking system's resource base by means of the capital inflow through the subsidiaries, and to improve quality of the banking services provided to the Russian companies overseas. At the same time the Russian banks' information-analytical departments and dedicated research institutes occupied with the reasearch in the sphere of finance and economy, shall study thoroughly and in detail the strategy and tactics of entering the global financial market used by the foreign banks, so that to use the findings in their practice.