The banking system unites commercial banks, funds and the regulator. In Russia, there is a two-tier type of system, in which banks are under the control of the regulator, interact with other elements of the infrastructure, which include legislative norms and internal rules.
The banking system is an association of various banks and credit institutions operating within the framework of a common monetary mechanism. It includes the Central Bank, a network of commercial institutions and settlement centers. The purpose of the banking system is to accumulate free funds and make a profit from them using capital investments.
Types of banking systems
There are three main types:
- two-level;
- centralized monobank;
- decentralized.
Most developed countries have a two-tier system. The Central Bank is used as a regulator, to which all other financial institutions are subordinate. The regulator organizes the banking system, ensures the stability of the national currency, and ensures the efficient functioning of the system.
The centralized view was built in the USSR and some other socialist countries. It consisted of three state banks and a system of savings banks. The latter attracted deposits from the population, made it possible to carry out payments for utilities. But such a system had many flaws, so a new approach was required over time.
A unique decentralized system is the "US Federal Reserve System". It is an independent agency that oversees the entire banking system. In America, it includes the 12 largest institutions with offices in the largest cities, and member banks, which are appointed by a specially organized council.
Banking infrastructure
The main elements of any kind of system are banks. They develop successfully only when interacting with other infrastructure elements. These include various legislative norms, internal rules, the structure of accounting and reporting, the structure of the bank management apparatus.
Our country has all the main elements of banking systems:
- Central bank;
- commercial lending institutions;
- local financial units.
The Central Bank of the Russian Federation has a large number of powers. Its main functions are in the currency regulation of the economy, regulation of monetary legal relations, the establishment of norms and standards.
The next building blocks are federal private financial institutions. These include Sberbank, VTB, Rosselkhozbank. Their functions are to make key decisions related to servicing the largest enterprises and institutions. These banking elements often have regional offices.
Additional parts of the banking system are:
- savings and mortgage banks;
- Insurance companies;
- pension funds;
- non-bank credit institutions.
Modern banking infrastructure, the directions of its development directly depend on various factors of the external environment. These include economic, technological, social, cultural, political, natural.
