Fundamentals of the state regulation of the banking sector in the Russian Federation

The main purpose of banking regulation and supervision in Russia is to maintain the stability of the banking system, to protect the interests of depositors and creditors. Specific tasks that are put before the supervisory authorities at any given time, directly determined that the main objective of supervision of credit institutions and the current state of the banking sector. The main focus of the supervisory authorities moved to ensure proper quality of functioning of credit institutions, their liquidity and solvency.

The license must contain provisions on its expiration date, the conditions of renewal options amending or canceling it. It can be stated approval of the central bank of candidates for senior positions in the bank after checking their qualifications and experience, significant (over 5%) changes in ownership structure, mergers, as well as the name change, reducing the paid-up capital.

To assess the financial condition of the bank usually use periodic records and annual financial reports, including the annual balance sheet, profit and loss account, explanatory note. Usually monthly or quarterly reports should be prepared on their compliance with prudential regulations and make them available within a month following the reporting period. Failure to comply with the period of the report indicates the presence of the bank's problems. About 1 every year, the external auditor must verify the monthly and quarterly financial statements, in which he concludes.

Checking the degree of reliability of the transmitted information supervisors, the formation of the most accurate picture of the situation of the bank, as its management may be provided only during on-site inspections.

During the general test examines various aspects of the Bank and the main areas of risk. Usually identified compliance with the laws of the bank, the accuracy of the reports, the presence of an effective management system and evaluates the overall financial condition of the bank.

An important point in the regulation of banks is to comply with mandatory standards set by the Bank of Russia (the Federal Law "On the Central Bank of the Russian Federation" chapter X):

• -    Minimum capital for start-up of credit institutions, the amount of own funds for operating credit institutions as a condition for the creation of a foreign country their subsidiaries and opening their branches, producing non-bank credit organizations bank status (Art. 63):

• -    The maximum amount of in-kind contributions to the charter capital of a credit institution (art. 62, para. 2);

• -    Maximum risk per borrower or group of related borrowers that are in relation to each other, or dependent parent and subsidiary, is set as a percentage of the equity of the credit organization (KO) and cannot exceed 25% of the equity KO (Art. 64 );

• -    The maximum size of large credit risks - is set as a percentage ratio of the total amount of major credit risks and the equity KO. Credit risk is the largest amount of loans, guarantees and warranties in favor of one client in excess of 5% of equity KO. The maximum size of large credit risk may not exceed 800% of the own funds KO (v. 65);

• -    Liquidity ratios of the credit institution.

Central Bank regulates the economy not directly, but through monetary policy. Acting on credit institutions, it creates certain conditions for their functioning, these conditions depends activity of commercial banks. Regulatory tools are:

• -    Discount and collateral policy. If the purpose of the Central Bank -appreciation of refinancing credit institutions to reduce their lending capacity, he must raise the discount rate. In case of an effective increase of the discount rate, refinancing for commercial banks increases the cost, which ultimately leads to an increase in the cost of credit in the country. This policy is a way to impact on the liquidity of credit institutions;

• -    Deposit policy, an increase in reserves increased lending capacity of commercial banks that in a balanced market leads to lower interest rates and

inflation. In conducting counter active deposit policy achieved the opposite result -a reduction of bank reserves, reduced lending capacity, rising interest rates, the decline in inflation.