International financial organizations are divided into private and public institutions.
- 1. International private financial institutions consist of banks and non-banking institutions.
- a) Banks. Significant investment potential is concentrated in institutions of the banking system, which, unlike many other intermediary institutions, have exceptional opportunities to use transaction funds and issue credit. By accumulating temporarily released financial resources, banks direct them through the channels of the credit system, primarily to the key, most dynamically developing sectors and industries, thereby contributing to the implementation of structural restructuring of the economy. The banking system is an important source of satisfying investment demand. Despite the relatively high level of self-financing in countries with developed market economies, domestic monetary resources do not cover the total need for investment. This gap becomes especially obvious when major structural changes occur in the economic organism of countries, when the demand for investment increases sharply.
The basic basis of the banking system are universal commercial banks, which are multifunctional institutions operating in various sectors of the financial market. At the same time, the development of a trend towards specialization of banking services has led to the establishment of specialized investment banks. A feature of the activities of investment banks is their focus on mobilizing long-term capital and providing it through the issuance and placement of shares, bonds, other securities, long-term lending, as well as servicing and participating in the issuance and founding activities of non-financial companies.
In the modern credit system, there are two types of investment banks. Banks of the first type provide services related exclusively to trading and placement of securities, banks of the second type - with the provision of medium-term and long-term loans.
Investment banks of the first type have become widespread in England, Australia, Canada, and the USA. Investment banks of this type, as a rule, are prohibited from accepting deposits from individuals and firms; their resources are formed through their own issuing activities (issuing securities) and attracting loans from other financial and credit institutions. Investment banks act as organizers of the primary and secondary circulation of third party securities, guarantors of the issue, intermediaries and creditors in stock transactions, active participants in the mergers and acquisitions market, agents purchasing part of the company's unplaced securities, as well as financial consultants on securities and other aspects of the activities of firms and corporations.
Investment banks of the first type operate mainly in the primary over-the-counter securities market, carrying out intermediary activities in the placement of securities. The main methods of placing securities are underwriting (purchase of the entire issue of securities with subsequent organization of its placement on the market), direct placement (in which banks act only as consultants to sellers and buyers of securities), public placement (when investment banks form a group for placement securities on the market), competitive bidding (where investment banks are auction organizers). When implementing large issues of securities, investment banks create syndicates and consortia. Currently, investment banks of the first type are powerful and dynamically developing financial and credit institutions.
Investment banks of the second type have developed in a number of Western European countries (Italy, Spain, the Netherlands, Norway, Portugal, France, Sweden) and developing countries. The main tasks of these banks are medium- and long-term lending to various sectors and industries of the economy, the implementation of special targeted projects in the field of advanced technologies, as well as government programs for stabilizing the economy and socio-economic development. They are engaged in various operations in the loan capital market, accumulating savings of individuals and legal entities, providing medium- and long-term loans to companies, investing in government and private securities, and other financial services.
It should be noted that in a number of countries investment banks perform functions that are characteristic of both types of investment banks. In England, Canada, and the USA, investment banks of the second type do not exist; long-term lending is carried out by other types of financial and credit institutions. In some countries (Germany, Finland, Switzerland), the functions of investment banks are performed by commercial banks.
Mortgage banks are a specific investment institution. They carry out credit operations to attract and place funds on a long-term basis secured by real estate - land and buildings. Along with their main activities, mortgage banks can engage in investing in securities, issuing loans secured by securities, and other financial services. The resources of mortgage banks are largely formed from funds raised from the issuance of mortgage bonds and mortgage notes. These debentures are solid interest-bearing securities and are backed by a pool of mortgages issued by the bank.
b) Non-banking financial and credit institutions. Non-banking financial and credit institutions include pawnshops, credit partnerships, credit unions, mutual loan societies, insurance companies, pension funds, financial companies, etc.
Pawnshops are credit institutions that issue loans secured by movable property. Historically, they originated as private usurious lending enterprises. In modern conditions, in many countries the state participates in the formation of capital and the functioning of pawnshops. Depending on the degree of participation of the state and private capital in their activities, pawnshops are divided into state and municipal, private and mixed types. Pawnshops specialize in providing consumer loans secured by collateral of movable property. Operations for storing clients' valuables are also practiced, as well as the sale of pledged property on a commission basis. This range of operations determines the specifics of the organizational structure of pawnshops: in addition to branches and branches, large pawnshops may have a network of warehouses and stores.
The peculiarities of credit transactions in pawnshops include the absence of a loan agreement with the client and a collateral obligation. When issuing a secured loan, the client receives a security ticket, usually to bearer, which has a registration number in the registration journal, which indicates the details of the borrower and the main terms of the transaction. Most loan transactions provide for a grace period, only after which the pledged property can be sold.
Credit partnerships are created for the purpose of credit and settlement services for their members: cooperatives, rental enterprises, small and medium-sized businesses, and individuals. The capital of credit partnerships is formed by purchasing shares and paying a mandatory entrance fee, which is not returned upon disposal. The main operations of credit partnerships include the provision of loans, commissions and intermediary operations.
Credit unions are credit cooperatives organized by groups of individuals or small credit institutions. They come in two main types. Credit unions of the first type are organized by a group of individuals united on a professional or territorial basis. Credit unions of the second type are created in the form of voluntary associations of a number of independent credit partnerships. The capital of credit unions is formed by paying for shares, periodic contributions of credit union members, and issuing loans. Credit unions carry out such operations as attracting deposits, providing loans secured by members of the union, accounting of bills, trade intermediary and commission operations, consulting and auditing services,
Mutual credit societies are a type of credit institutions that are similar in nature to commercial banks serving small and medium-sized businesses. Participants in mutual credit companies can be individuals and legal entities who form the capital of the company through entrance fees. When admitting a mutual loan to a society, the admission committee evaluates the applicant’s creditworthiness, the guarantees or sureties provided by him, the property security and determines the maximum allowable amount of the loan opened to him.
Upon joining, a member of a mutual credit company contributes a certain percentage of the loan opened to him as payment for the share contribution, and undertakes to bear responsibility for his debts, as well as the operations of the company in the amount of the loan opened to him. When leaving a mutual loan company, its participant repays the amount of the principal debt, his part of the company's debts, after which the entrance fee and the pledged property are returned to him.
Insurance companies, selling insurance policies, accept savings from the population in the form of regular contributions, which are then placed in government and corporate securities, mortgages for residential buildings.
The regular influx of premiums, interest income on bonds and dividends on shares owned by insurance companies ensures the accumulation of stable and large financial reserves.
Insurance companies can be organized in the form of a joint stock company or a mutual company. In the latter case, the owners of the insurance policies are co-owners of the company; The policyholder's accumulated premiums are treated as his share in the mutual company.
Private pension funds are legally independent firms managed by insurance companies or trust departments of commercial banks. Their resources are formed on the basis of regular contributions from workers and contributions from companies that formed the pension fund, as well as income from securities owned by the fund. Pension funds invest in the most profitable types of private securities, government bonds, and real estate. They are the largest institutional owner of shares, and their concentration of shareholder control typically exceeds the concentration of shares of the same firm held by investment and insurance companies. The share of investments in highly liquid assets (current deposits, treasury bills, etc.) is relatively small. Pension funds are distinguished by a stable financial position and a well-thought-out investment strategy.
Finance companies specialize in financing installment sales of consumer goods and issuing consumer loans. The source of financial companies' resources is their own short-term liabilities placed on the market and bank loans.
Specialized credit and financial institutions, or para-banking institutions, are distinguished by their focus either on serving certain types of clientele, or on providing mainly one or two types of services.
Their activities are mostly concentrated on serving a small segment of the market and, as a rule, providing specialized types of credit, settlement and financial services.
Three main reasons contribute to the growing influence of specialized credit and financial institutions abroad:
growth of incomes of the population in developed countries;
active development of the securities market;
3) provision by these institutions of special services that commercial and specialized banks cannot provide.
The main forms of activity of these institutions in the banking market come down to the accumulation of savings of the population, the provision of loans to legal entities, municipalities and the state through bond issues, the mobilization of capital through all types of shares, as well as the provision of mortgages, consumer loans and mutual credit assistance.
Non-banking financial institutions are engaged in intense competition both among themselves and with commercial banks.
Insurance companies compete with pension funds to attract pension funds. Savings and loan associations are battling insurance companies in the mortgage and real estate investment industries. Finance companies compete with insurance companies in the consumer credit industry. In addition, all credit and financial institutions compete with commercial and savings banks to attract savings from all segments of the population.
Now, let's give a brief description of the main specialized financial and credit institutions.
Insurance companies.
The insurance market is a special sphere of monetary relations, where the object of purchase and sale is a “specific product” - an insurance service, and supply and demand for it are formed. A feature of the accumulation of capital of insurance companies is the receipt of insurance premiums from legal entities and individuals, the amount of which is calculated on the basis of insurance tariffs, or rates.
Pension funds are a fairly new phenomenon in the credit and banking market, which developed after the Second World War. The organizational structure of the pension fund differs from the structure of other credit and financial institutions in that it does not provide for any form of ownership, but is created under corporations, which are their owners.
Investment companies are a new form of specialized non-banking institutions, which received the greatest development in the 70-80s in the USA. Investment companies raise funds by issuing their own shares, which they then invest in government securities and corporate securities.
Savings and loan associations are loan partnerships created to finance housing construction. Most associations were organized after the Second World War to promote the expansion of housing construction.
Financial companies are a special type of specialized non-banking institutions operating in the consumer market.
Credit unions are cooperative savings institutions, usually organized by labor unions, employers, or a group of individuals united by certain material interests.
Specialized financial and credit institutions also include various charitable foundations. Of course, the priority in creating charitable foundations belongs to the United States, but in recent years similar foundations have begun to be created in Western Europe and Japan.
As for the Russian credit and banking system, here specialized non-banking institutions occupy an insignificant place. This is due to the fact that:
Only non-state insurance companies and non-state pension funds have achieved real development in the Russian economy;
however, they account for an insignificant share in the total value of assets of all credit and financial institutions in Russia.
Control questions:
What economic processes contributed to the emergence of banks?
formulate the concept of a bank as a credit institution, what are its main features?
name the historical prerequisites for the emergence of banking systems;
What was the need to transform the planned-directive banking system?
structure of the modern banking system in Russia;
name the basic principles of the formation and functioning of the banking system;
Why are central banks the main link in the banking system?
What is the special place and role of the Central Bank in the banking system of the Russian Federation?
list the main functions of a commercial bank in Russian economic conditions;
What is the difference between specialized financial and credit institutions in Russia?
More on the topic Specialized financial and credit institutions:
- 10.7. Specialized financial and credit organizations
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Financial and credit institutions are public and private, commercial organizations authorized to carry out financial transactions for lending, depositing deposits, maintaining current accounts, buying and selling currency and securities, providing financial services, etc. The main financial and credit institutions are banks and financial companies , investment funds, savings banks, pension funds, mutual funds, insurance companies. All financial intermediaries can be divided into four groups: 1) deposit-type financial institutions; 2) contractual savings institutions; 3) investment funds; 4) other financial organizations.
The most common financial intermediaries are deposit-type institutions. In developed countries, their services are used by a significant part of the population, since the payment of income from deposit accounts is, as a rule, guaranteed by insurance companies, the reliability of which is ensured by the state. Funds raised by depository institutions are used to issue bank, consumer and mortgage loans. The main institutions of this group are commercial banks, savings institutions and credit unions.
Commercial banks, as a rule, offer the widest range of services for raising funds from economic entities that temporarily have them, as well as for providing various loans and credits. Due to the enormous importance of commercial banks in the functioning of the state’s monetary system, they are subject to strict government control.
Savings institutions are specialized financial institutions whose main sources of funds are savings deposits and a variety of time-based consumer deposits. These institutions borrow funds for short periods using checking and savings accounts and then lend them out over the long term against real estate collateral.
Credit unions are mutual lending institutions. They accept deposits from individuals and provide loans to members of the union on terms acceptable to them. Credit union liabilities come from savings accounts and checking accounts (shares). Credit unions provide their funds to union members in the form of short-term consumer loans.
Credit unions have a number of advantages over other deposit-type financial institutions. As a rule, they are exempt from paying income (profit) tax; they are not subject to antimonopoly legislation, which allows them to participate in joint ventures.
In Russia, the activities of credit unions have not received sufficient distribution. Their status at the federal level is determined only by clarifications from the Ministry of Justice of the Russian Federation. The special law “On credit consumer cooperatives of citizens (credit consumer unions)” was adopted by the State Duma, but was not put into effect. Created in 1994, the League of Credit Unions includes about forty credit unions and four regional credit union associations.
Savings institutions operating on a contractual basis include insurance companies and pension funds. These financial institutions are characterized by a steady flow of funds from insurance policyholders and pension fund account holders. They have the opportunity to invest in long-term, high-yield financial instruments.
Investment funds sell their securities (shares, investment units) to investors and use the funds received to purchase direct financial obligations. As a rule, they are characterized by high reliability and low denomination of the securities sold. Among investment funds, mutual funds stand out primarily. They sell their shares to investors and use the proceeds to buy mostly stocks and bonds. There are different types of mutual funds. For all of them, the value of the share changes (usually increases), which allows investors to receive income if the share is sold to a mutual fund.
Mutual fund systems play an active role in financial markets in economically developed countries. In particular, in the United States, one of the most dynamically developing investment funds are money market mutual funds, which first appeared in 1972.
A distinctive feature of these funds is that they invest in short-term securities with a low risk of non-payment and a high face value - from $1 million and above. For many investors, such securities are inaccessible due to their high cost.
Money market mutual funds allow small investors to earn income on their investments at market interest rates without being exposed to significant risk of non-repayment of funds. The last group of financial intermediaries includes various types of financial companies, such as finance companies specializing in business lending and leasing transactions and consumer finance companies providing loans to households with the option of repayment in installments.
These financial institutions receive the bulk of their funds from the sale of short-term obligations in the form of commercial paper to investors. The activities of these companies are regulated by regulations of representative (legislative) and executive authorities.
The volume of financial transactions carried out by financial intermediaries has been increasing in recent decades. At the same time, in developed countries there is a relative change in the volume of services provided by individual financial intermediaries. At the same time, there is a relative change in the volume of assets of individual financial institutions.
Thus, in the United States over the past 30 years, the share of mutual funds and state pension funds has increased significantly, while the share of depository institutions (commercial banks, savings institutions) has decreased. If in 1975 the share of commercial banks in the total financial assets of financial intermediaries was about 40%, then by 1998 it decreased to approximately 27%, and the share of mutual funds accordingly increased from 2 to 19%.
Topic 2. Financial and credit institutions
2.1. Credit institutions (banks; NPOs)
2. 2 Financial non-credit institutions (microfinance organizations, insurance contract institutions, unit (mutual) funds)
2.3. Professional activities in financial markets
Credit institutions
In the banking system of the Russian Federation, in accordance with Federal Law No. 395-1 of December 2, 1990 “On Banks and Banking Activities,” all credit organizations are divided into two types: banks and non-bank credit organizations (NPOs). The main criterion that distinguishes a non-bank credit organization from a bank is the list of banking operations that the bank and the non-profit organization have the right to carry out.
Non-bank credit organization– this is a legal entity, a commercial organization that, in order to make a profit as the main goal of its activities, on the basis of a license received from the Central Bank, has the right to carry out certain banking operations; At the same time, it is not provided for granting NPOs the right to open current accounts for individuals, make transfers through bank accounts of individuals and to attract funds from individuals into deposits, and therefore NPOs do not and should not participate in the Deposit Insurance System. From the entire list of banking operations, NPOs also cannot obtain the right to attract deposits and place precious metals - all these are privileges of banks.
Now the law highlights:
1) Non-profit organizations that have the right to carry out money transfers without opening an account and conduct other banking operations related to them - such non-profit organizations received the name in the documents of the Central Bank of the Russian Federation and in practice Payment NPOs;
2) Non-profit organizations that have the right to carry out certain banking operations, the combinations of which are established by the Central Bank. The Bank of Russia established these combinations by Instruction No. 135-I, providing for two types of licenses - for the so-called Settlement non-profit organizations And Deposit and credit non-profit organizations.
Specialized credit and financial institutions– these are financial organizations that are not banks, which base their activities on attracting customer funds and placing them on the terms of repayment, urgency, and payment. Such institutions are pension funds, insurance, trust, leasing, investment companies, investment funds, pawnshops. If non-bank credit organizations carry out their activities mainly on a commission basis (provide services for a commission), then specialized financial institutions earn on the difference between the cost of placement and the cost of raising funds.
Pension funds raise funds through contributions from employers and citizens. The majority of their liabilities are long-term. Therefore, they have the opportunity to invest raised funds in long-term securities. Legislation establishes requirements for the diversification of their investments (assets), as well as the inadmissibility of high risk.
Insurance companies attract savings from households and firms through insurance contracts. They also invest the funds accumulated in this way in securities. Statistical research helps insurance companies accurately determine the amounts they will need to pay for insurance claims in the future. Accordingly, they have the opportunity to plan short-term and long-term investments.
Investment funds– these are companies that issue their own shares and place them publicly, attracting funds from individual investors. The funds raised are invested in securities (stocks and bonds) of other companies. Investment funds are required to diversify their investments and avoid increased risks. Investments are made primarily in stocks rather than bonds of other companies.
Investment companies They differ from investment funds in that they place their shares, as a rule, among legal entities. Investment companies often take the form of a holding company when they specialize in managing controlling interests.
Questions for self-control:
- Define the credit system. What are the main elements of the Russian credit system?
- Can an issuing bank not be a central bank? What is their difference then? Is it possible to have several issuing banks?
- Can a central bank be owned by private entities?
- What types of relationships exist between commercial banks? What is the role of correspondent accounts in organizing correspondent relations between banks?
- What is the main source of raising funds for a commercial bank?
- Do banks use central bank loans as a source of funds for active operations?
- Name the main directions for placing funds of commercial banks. What is the source of profit in these operations?
- What is the difference between universal and specialized banks? Can a bank specializing in working with exporters (in industrial construction lending) work with individuals?
- Which credit institutions are classified as non-banking in accordance with the regulations of the Central Bank?
- Are specialized financial institutions competitors of commercial banks or do they operate in different markets?
1) About banks and banking activities. Federal Law of December 2 1990 No. 395-1 (as amended on March 21, 2002). // Bulletin of the Bank of Russia. 2001. October 3. No. 61. P.22-42.
2) Banking portfolio – 1. / Rep. ed. Korobov Yu. I., Rubin Yu. B., Soldatkin V. I. M.: SOMINTEK, 1994. P. 149-214.
3) Banking: Textbook. – 2nd ed. reworked and additional / Ed. O.I. Lavrushin. – M.: Finance and Statistics, 2002. P. 69-75; 76-92; 94-101; 213-221; 269-304; 478-796.
4) Banking: Textbook / Ed. G. G. Korobova. – M.: Yurist, 2002. P. 195-197; 209-221; 274-276; 335-350; 359-367; 397-400; 404-424.
5) Bibikova E.A., Kotina O.V. Savings system: an approach to determining the composition and content of basic elements // Money and Credit. 2003. No. 6. pp. 48-54.
6) Bukato V.I., Golovin Yu.V., Lvov Yu.I. Banks and banking operations in Russia. – 2nd ed. reworked and additional / Ed. M.H. Lapidus. – M.: Finance and Statistics, 2001. P. 208-211; 214-217; 218-220; 227-236; 243-250; 251-256; 265-282; 283-300; 305-317.
7) Money. Credit. Banks: Textbook for universities / Ed. E.F. Zhukova. – 2nd ed., revised. and additional – M.: UNITY-DANA, 2003. P. 224-254; 543-570.
8) Miller R.L., Van Hoose D.D. Modern money and banking: Textbook for universities. / Per. from English M.: INFRA-M, 2000. P. 118-126; 135-138.
9) General theory of money and credit: Textbook. / Ed. E. F. Zhukova. 3rd ed., revised. and additional M.: UNITY-DANA, 2001. pp. 298-316.
10) Current state of financial institutions in Russia // Society and Economics. 2003. No. 3. pp. 3-79.
11) Usov V.V. Money. Money turnover. Inflation: Textbook. manual for universities. – M.: Banks and exchanges, UNITY, 1999. P. 447-454.
12) Fetisov G. G. Methodological foundations for the formation of a sustainable banking system. // Finance and credit. 2002. No. 15. P.2-4. P.8-13.
4.4. Central Bank of the Russian Federation (Bank of Russia).
The third element of the banking system is specialized financial institutions engaged in lending to certain areas and sectors of economic activity. Their activities can be divided into one or two main operations, they dominate relatively narrow sectors of the capital market and have a specific clientele.
Specialized financial institutions include:
§ Investment banks
§ Savings institutions
§ Insurance companies
§ Pension funds
§ Investment companies
Investment banks are engaged in issuance and founding activities, i.e., they carry out operations to issue and place securities. They raise capital by selling their own shares or through loans from commercial banks.
Savings institutions(mutual savings banks, savings and loan associations, credit unions) accumulate household savings and invest money capital primarily in financing commercial and residential construction.
Insurance companies, whose main function is life, property and liability insurance, have now become the most important channel for the accumulation of cash savings of the population and long-term financing of the economy. Insurance companies focused their main attention on financing the largest corporations in the field of industry, transport and trade.
Pension funds, like insurance companies, it is actively forming an economic insurance fund, which is acquiring an increasingly important role in the process of expanded reproduction. Pension funds invest their accumulated cash reserves in bonds and shares of private companies and government securities, thus providing, usually long-term, financing of the economy and the state.
Investment companies act as an intermediate link between individual monetary capital and corporations operating in the non-financial sphere. Investment companies vary depending on fluctuations in securities prices. An increase in the price of the shares a company owns causes the price of its own shares to rise. The main area for investing capital of investment companies is corporate shares.
In modern conditions, specialized credit and financial institutions have taken an important place in the loan capital market, becoming the main reservoir of long-term capital in the money market, significantly displacing commercial banks in this area. However, the fall in the share of commercial banks in the total assets of financial institutions does not mean that their role in the economy has decreased. They continue to carry out the most important functions of the banking system: deposit and check issue, commercial credit, short-term financing, etc.
21. Objective foundations of the formation of the world economy and its structure. International division of labor.
World economy is a set of national economies and economic relationships between them, or a set of production relations operating at the national and international levels. Composite parts of the modern world economic system are: 1) national economies;
2) transnational corporations;
3) integration associations;
4) international economic organizations. The set of interacting national markets of individual countries, connected by international economic relations, forms world market(the beginning of the formation of the world market - the 16th century, the period of great geographical discoveries). Realization of the world market in the 17th century. became international division of labor in the form of trade agreements between individual countries, which determined the emergence and development of the world economy. In modern conditions, it is increasingly acquiring the features of integrity, objective circumstances which are:
1) the desire of the peoples of the world to survive in the face of increasing nuclear potential and the threat of nuclear war and, in connection with this, pursuing a policy of peaceful coexistence;
2) deployment of scientific and technological progress. Not a single country in the world today can independently use all the achievements of modern science and technology, therefore it is necessary to combine efforts in this area, which contributes to the establishment of close economic, scientific and technical ties between countries, the formation of sustainable structures in the world economy;
3) internationalization of economic life, international division of labor. The effective development of production processes at the level of world standards, the production of high-quality products by countries of the world community is possible only if various forms of specialization and cooperation of production are used at the international level.
This is the only way to significantly reduce the cost of production, improve its quality and reliability, save fuel, energy and raw materials, increase labor productivity, and use labor more rationally. All this contributes to the establishment of permanent economic ties between partner countries in the international sphere;
4) the need to unite the efforts of countries to solve global problems, mutual assistance in extreme situations;
5) the feasibility of combining the economic efforts of partner countries to develop the riches of the World Ocean and space;
6) preservation of acquired knowledge, ideas and their processing;
7) the use of increasingly complex information systems and the creation of an international information data bank that every country in the world community could use in accordance with its needs.
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