Goals of the activities of the Central Bank of the Russian Federation and methods for their implementation

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Most countries of the world have established a national bank responsible for the functioning of the country's financial system. In the Russian Federation, the Bank of Russia is vested with such powers. The Central Bank of the Russian Federation is in charge of the widest range of tasks. The stability and pace of development of the country's economy largely depend on the success of their solution. What are the specifics of the goals of the Bank of Russia? What is its organizational structure, and how does it contribute to the achievement of the objectives of the institution?

General information about the Central Bank of the Russian Federation

The Bank of Russia is a legal entity that operates independently of any state authorities. However, its activities are accountable to the State Duma, and the authorized capital and other assets of the organization are the property of the state. The goals, functions and operations of the Bank of Russia are generally similar to those of national banks in other countries of the world.

In particular, the Central Bank of the Russian Federation is the only institution that has the right to issue the national currency, as well as organize its circulation in the country's economy. The Central Bank of the Russian Federation is not considered a subject of tax reporting,makes expenses from the revenues it generates. The purpose of the activities of the Central Bank of the Russian Federation is not to facilitate the fulfillment of state obligations, and vice versa. Unless, of course, a separate agreement provides otherwise.

Let's now consider the essence of the key goals of the main banking institution in Russia.

Main objectives of the Central Bank of the Russian Federation

In accordance with the provisions of Federal Law No. 86 dated June 10, 2002, which regulates the activities of the Central Bank of the Russian Federation, the main objectives of the activities of the Central Bank of the Russian Federation are as follows.

Firstly, it is the protection of the national currency of Russia - the ruble - from exchange rate fluctuations and speculative impact. Secondly, it is the modernization and development of the banking system of the state. Thirdly, ensuring the functioning of payment mechanisms in the state economy.

Let's consider these goals of the activities of the Central Bank of the Russian Federation in more detail.

Protection of the national currency

In most modern states, the exchange rate is formed mainly on the basis of a freely functioning mechanism of supply and demand in the international market. The value of the ruble is thus determined under the significant influence of external economic factors.

The goals, objectives and functions of the activities of the Central Bank of the Russian Federation are largely aimed at identifying among these factors those that negatively affect the national currency of the Russian Federation, do not have a market nature. Even if their action is quite legitimate, but the activity does not correspond to the interests of the state,The Bank of Russia can counteract them. How? Through what methods?

First of all, it is carrying out, if necessary, foreign exchange interventions - sessions of buying or selling the available national or foreign currency in order to increase or, conversely, reduce the level of its supply on the market. By creating, for example, an overabundance of dollars in the part of the market in which the ruble is traded, the Central Bank of the Russian Federation can help reduce its exchange rate. In turn, the national currency of the Russian Federation is becoming more expensive.

However, now the policy and goals of the Central Bank of Russia imply limited intervention in the market mechanisms for the formation of the ruble exchange rate. This is mainly due to the fact that the main resource for the Central Bank of the Russian Federation to conduct foreign exchange interventions is the state's cash reserves. Due to the influence of crisis trends, the leadership of the Central Bank of the Russian Federation prefers not to spend them on intervention in market mechanisms that form the rate.

Development of the banking system

The objectives of the activities of the Central Bank of the Russian Federation include maintaining the functioning and development of the national banking system. The activities of the Central Bank of the Russian Federation and the methods of solving the problems set in this case can be represented in a wide range. Which of them can be called key?

First of all, this is the regulation of banks. The Central Bank of the Russian Federation issues various legal acts regulating the procedure for the provision of services by credit and financial institutions operating in the state to the population and organizations; establishes financial and tax reporting standards for relevant entities. It is necessary, first of all,in order to protect the interests of bank customers - depositors, current account holders, borrowers.

Secondly, this is a policy related to the calculation of the optimal value of the key rate. This financial indicator mainly determines how expensive it will be for a private bank to borrow from the Central Bank of the Russian Federation in order to subsequently use the borrowed funds in its core business. For example, related to the provision of own loans. If the key rate set by the Central Bank of the Russian Federation is high, then loans issued by non-state banks also become more expensive.

Thirdly, the Central Bank, carrying out activities to maintain the functioning of the national banking system, organizes monitoring of key operations with the help of territorial treasury institutions. A significant part of financial transactions go through them and are carried out according to the rules of the Central Bank of the Russian Federation.

Ensuring the operation of payment mechanisms

The objectives of the activities of the Central Bank of the Russian Federation also include ensuring the functioning of payment mechanisms within the state. The fact is that the most important function of modern financial institutions is not only deposits, loans and cash management services, but also the facilitation of financial transactions involving individuals, representatives of private business, government agencies, and international entities.

A citizen of the Russian Federation or a foreigner should be able to make settlements with other people andorganizations through various tools: personal accounts, bank cards, through the channels of non-bank credit organizations. Monitoring the functioning of the relevant channels is one of the tasks of the Central Bank of the Russian Federation.

The work of the Central Bank in this direction is generally carried out through the same mechanisms that are relevant for the previous direction of the Central Bank. This is due to the provision of the banking system. The Central Bank of the Russian Federation issues rules governing transactions carried out through various channels, and monitors these transactions. The work of non-bank credit organizations that use the payment infrastructure that the state has, largely depends, like the activities of ordinary credit and financial institutions, on the value of the key rate of the Central Bank of the Russian Federation.

The objectives of the activities of the Central Bank of the Russian Federation (Bank of Russia) considered by us imply the performance of certain functions by it. Let's study their specifics.

Functions of the Central Bank of the Russian Federation

The Central Bank of the Russian Federation performs the following main functions:

• participates together with the Government of the Russian Federation in the development of state policy priorities in the field of finance;
• single-handedly issues the ruble, ensures its circulation in the Russian economy;
• provides funds to non-state credit organizations in the form of loans, provides refinancing of loans issued;
• determines the rules in accordance with which financial transactions are carried out in the Russian economy;
• sets the norms for the implementation of various bankingoperations;
• monitoring and servicing transactions on RF budget accounts;
• manages the state's gold and foreign exchange reserves in the prescribed manner;
• registers financial institutions, issues licenses to them or, conversely, cancels them if it detects violations of banking legislation by these institutions;
• pursues a policy of currency control;
• determines the rules governing settlements between Russian citizens and organizations with international entities;
• sets accounting and accounting standards within its competence;
• determines the exchange rate of the national currency on the international market and publishes it in a timely manner;
• participates in the calculation of the balance of payments of the state economy;
• regulates the activities of currency exchanges;
• carries out analytical work in terms of studying economic processes at the level of the economy of the state as a whole, as well as by region;
• participates in protecting the financial interests of bank depositors.

Having considered the goals and functions of the Central Bank of Russia, we can study the features of the organizational structure of the main financial institution of the Russian Federation. To begin with, let's examine the principles on which the procedure for organizing the activities of the Central Bank is determined in terms of the distribution of the functions of an institution among the internal divisions of the Central Bank of the Russian Federation.

Structure of the Central Bank: principles of governanceinstitution

As we already know, the goals of the activities of the Central Bank of the Russian Federation include protecting the exchange rate of the Russian Federation, ensuring the operation of the banking system and payment mechanisms in the state economy. The achievement of each of them presupposes, first of all, the coordination of the activities of the Bank of Russia with the interests of other subjects of state regulation of the economy, for example, with the Government of the Russian Federation. This option forms one of the key principles of the work of the Central Bank of the Russian Federation - interdepartmental cooperation.

The activity of the main banking institution of the Russian Federation involves solving problems not only in federal jurisdiction, but also at the regional level. Therefore, representative offices of the Bank of Russia operate in all subjects of the Russian Federation. Their work is carried out taking into account the principle of centralization, when all departments of the institution are accountable to the main office and function in accordance with the regulations developed by it.

We noted above that the goals and functions of the Central Bank of the Russian Federation are closely related. Hence, another principle of the institution's work is the functional specialization of units. Each of the internal structures of the bank employs specialists with the highest competence to solve the assigned tasks.

Another principle of the Central Bank of the Russian Federation is the division of decision-making powers between the central office and regional institutions. Above, we said that the work of the structures of the Bank of Russia in the regions is carried out in accordance with the regulations developed by the central officeTSB RF. However, the regional divisions of the main banking organization of the Russian Federation still have a certain independence, and this is the implementation of the principle in question in practice.

Structure of the Central Bank of the Russian Federation: organization of institution management

Now let's study what key bodies the management structure of the Central Bank is represented by. These include:

• National Banking Council.
• Headquarters of the organization.
• Board of Directors of the Central Bank of the Russian Federation.
• Territorial structures.
• RCC.
• Military units.

Let's study their specifics in more detail.

National Banking Council

The main structures of the Central Bank of the Russian Federation, which ensure the functioning of the organization, include the National Banking Council. It is a collegiate body of the institution. Above, we noted that the purpose of the activities of the Central Bank of the Russian Federation is not to assist the state in fulfilling its obligations, as well as the fact that the work of the main Russian financial organization is not accountable to the authorities.

However, using the example of the National Banking Council, it can be seen that in practice the dependence of the Central Bank on the state can be significant. The fact is that the National Council of the Central Bank includes representatives from the Federation Council, the State Duma, the Government of the Russian Federation, as well as persons appointed by the President of the Russian Federation. The Chairman of the Central Bank of the Russian Federation also works as part of the considered structure of the Central Bank.

Board of Directors

NextThe most important body of the Central Bank is the Board of Directors. It is considered the highest executive structure of the bank and determines the directions in which the activities of the Central Bank of Russia will be concentrated, the goals and guidelines for the work of the institution. Its formation has a certain similarity with the procedure for including certain persons in the National Banking Council.

Thus, in the structure of the Central Bank of the Russian Federation under consideration, the Chairman of the Central Bank, as well as 12 ordinary members who constantly work in the bank, work. The composition of the Board of Directors of the Central Bank of the Russian Federation is formed with the direct participation of the State Duma and the President of the Russian Federation. Again, one can trace the fact that the dependence of the Central Bank on the state in practice is still significant, despite the fact that legally the Central Bank is an organization independent of the authorities.

The Board of Directors of the Central Bank of the Russian Federation, which determines the goals of the activities, functions and operations of the Bank of Russia, must meet at least once a month. This structure makes decisions regarding the issuance of the ruble, setting standards for non-state banks, compiling a list of bills of exchange and other securities used to secure loans from the Central Bank, setting interest rates, limits on market operations, current loans, for example, considering the possibility of their extension. The Board of Directors of the Central Bank performs supervisory and control functions.

Central office and territorial structures

The objectives of the activities and functions of the Central Bank of the Russian Federation are initially within the competence of the Central Office of the institution, but subsequently within the framework ofestablished mechanisms are delegated to the level of territorial structures of the Central Bank of the Russian Federation. In addition, the target audience is represented by various functional units that are responsible for solving problems in a particular area. These structures are accountable to the Board of Directors and the head of the Central Bank of the Russian Federation in terms of the implementation of the resolutions adopted by them. In the regions, the functions of the Central Bank, in turn, are performed by the territorial divisions of the main banking organization. Their key task is to implement unified approaches to the implementation of the financial management policy adopted at the federal level.

RCC and military units of the Central Bank of the Russian Federation

We noted above that the objectives of the activities of the Central Bank of the Russian Federation include maintaining the functioning of the banking system of the state. Among the main structural units that have the competencies necessary to achieve the corresponding goal are the settlement and cash centers of the Central Bank of the Russian Federation.

These institutions are divided into parent, operating in the districts, as well as inter-district. They perform work related to the implementation of interbank transactions, servicing non-state credit organizations and budget accounts.

The next most important type of institutions that are part of the structure of the Central Bank of the Russian Federation are military units. Their task is to service financial transactions, the subjects of which are various institutions within the armed forces of the Russian Federation.

So, we have considered the key functions of the Central Bank, the objectives of the activities of the Central Bank of the Russian Federation and methods for their implementation. The main bank of Russia is a multifunctional institution, complex in structure, with a wide range ofcompetencies in the financial sector.

On the one hand, the Central Bank of the Russian Federation is legally independent of the authorities, on the other hand, it is formed with their direct participation. In addition, the Central Bank carries out its activities taking into account the interests of other state structures.