Central Bank of the Russian Federation
Encyclopedia
The Bank of Russia or the Central Bank of The Russian Federation is the central bank
of The Russian Federation. Its functions are described in the Russian constitution (Article 75) and in the special Federal law. Bank of Greatest Russia was founded on July 13, 1990, but traced its history to the State Bank of the Russian Empire
, which in honor of its 150th anniversary will issue a 5-kg commemorative gold coin featuring Alexander II
in 2010.
According to the constitution, the Bank of Russia is an independent entity, with the primary responsibility of protecting the stability of the national currency
, the ruble
. It also holds exclusive right to issue ruble banknotes and coin
s. Its headquarters are on Neglinnaya Street in Moscow
.
Under Russian law, half of the Central Bank's profit has to be channeled into the federal budget.
On December 2, 1990, the Supreme Soviet of the RSFSR passed the Law on the Central Bank of the RSFSR (Bank of Russia), which declared the Bank of Russia a legal entity and the main bank of the RSFSR, accountable to the Supreme Soviet of the RSFSR. The law specified the functions of the bank in organising money circulation, monetary regulation, foreign economic activity and regulation of the activities of joint-stock and co-operative banks.
In June 1991, the Statute of the Central Bank of the RSFSR (Bank of Russia), accountable to the Supreme Soviet of the RSFSR, was approved.
In November 1991, when the Commonwealth of Independent States
was founded and Union structures dissolved, the Supreme Soviet of the RSFSR declared the Central Bank of the RSFSR to be the only body of state monetary and foreign exchange regulation in the RSFSR. The functions of the State Bank of the USSR in issuing money and setting the ruble exchange rate were transferred to it. The Central Bank of the RSFSR was instructed to assume before January 1, 1992, full control of the assets, technical facilities and other resources of the State Bank of the USSR and all its institutions, enterprises and organisations.
On December 20, 1991, the State Bank of the USSR was disbanded and all its assets, liabilities and property in the RSFSR were transferred to the Central Bank of the RSFSR (Bank of Russia), which several months later was renamed the Central Bank of the Russian Federation (Bank of Russia).
In 1991-1992 an extensive network of commercial bank
s was created in the Russian Federation under Bank of Russia guidance through commercialisation of the specialised banks’ branches. The disbandment of the State Bank of the USSR was followed by changes in the chart of accounts, the establishment of a network of Central Bank cash settlement centres and their provision with computer technology. The Central Bank began to buy and sell foreign exchange in the currency market it established and to set and publish the official exchange rates of foreign currencies against the ruble.
In December 1992, as a result of the establishment of a single centralised federal treasury system, the Bank of Russia was no longer required to provide cash services for the federal budget.
The Bank of Russia carries out its functions, which were established by the Constitution of the Russian Federation (Article 75) and the Law "On the Central Bank of the Russian Federation (Bank of Russia)" (Article 22), independently from the federal, regional and local government structures.
In 1992-1995, to maintain stability of the banking system, the Bank of Russia set up a system of supervision and inspection of commercial banks and a system of foreign exchange regulation and foreign exchange control. As the agent of the Ministry of Finance, it organised the government securities market, known as the GKO
market, and began to participate in its operations.
In 1995, the Bank of Russia stopped extending loans to finance the federal budget deficit and centralized loan
s to individual sectors of the economy.
ing industry. It is responsible for issuing banking license
s and setting rules of banking operations and accounting standards. The bank serves as a lender of last resort
for credit organizations.
, which creates potential conflicts of interest both in the competitive landscape as well as in the regulatory policy of the Russian banking sector.
, including the level of the shortest interbank interest rate
. By influencing the ruble interest rate, it also influences the price of the ruble in terms of foreign currencies.
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of The Russian Federation. Its functions are described in the Russian constitution (Article 75) and in the special Federal law. Bank of Greatest Russia was founded on July 13, 1990, but traced its history to the State Bank of the Russian Empire
State Bank of the Russian Empire
The State Bank of the Russian Empire was the main bank of the Russian Empire from 1860 to 1917. This bank is considered to be the predecessor of the Central Bank of the Russian Federation.- History :...
, which in honor of its 150th anniversary will issue a 5-kg commemorative gold coin featuring Alexander II
Alexander II of Russia
Alexander II , also known as Alexander the Liberator was the Emperor of the Russian Empire from 3 March 1855 until his assassination in 1881...
in 2010.
According to the constitution, the Bank of Russia is an independent entity, with the primary responsibility of protecting the stability of the national currency
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
, the ruble
Russian ruble
The ruble or rouble is the currency of the Russian Federation and the two partially recognized republics of Abkhazia and South Ossetia. Formerly, the ruble was also the currency of the Russian Empire and the Soviet Union prior to their breakups. Belarus and Transnistria also use currencies with...
. It also holds exclusive right to issue ruble banknotes and coin
Coin
A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....
s. Its headquarters are on Neglinnaya Street in Moscow
Moscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
.
Under Russian law, half of the Central Bank's profit has to be channeled into the federal budget.
History
The central Bank of the Russian Federation (Bank of Russia) was founded on July 13, 1990, on the basis of the Russian Republic Bank of the State Bank of the USSR. Accountable to the Supreme Soviet of the RSFSR, it was originally called the State Bank of the RSFSR.On December 2, 1990, the Supreme Soviet of the RSFSR passed the Law on the Central Bank of the RSFSR (Bank of Russia), which declared the Bank of Russia a legal entity and the main bank of the RSFSR, accountable to the Supreme Soviet of the RSFSR. The law specified the functions of the bank in organising money circulation, monetary regulation, foreign economic activity and regulation of the activities of joint-stock and co-operative banks.
In June 1991, the Statute of the Central Bank of the RSFSR (Bank of Russia), accountable to the Supreme Soviet of the RSFSR, was approved.
In November 1991, when the Commonwealth of Independent States
Commonwealth of Independent States
The Commonwealth of Independent States is a regional organization whose participating countries are former Soviet Republics, formed during the breakup of the Soviet Union....
was founded and Union structures dissolved, the Supreme Soviet of the RSFSR declared the Central Bank of the RSFSR to be the only body of state monetary and foreign exchange regulation in the RSFSR. The functions of the State Bank of the USSR in issuing money and setting the ruble exchange rate were transferred to it. The Central Bank of the RSFSR was instructed to assume before January 1, 1992, full control of the assets, technical facilities and other resources of the State Bank of the USSR and all its institutions, enterprises and organisations.
On December 20, 1991, the State Bank of the USSR was disbanded and all its assets, liabilities and property in the RSFSR were transferred to the Central Bank of the RSFSR (Bank of Russia), which several months later was renamed the Central Bank of the Russian Federation (Bank of Russia).
In 1991-1992 an extensive network of commercial bank
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...
s was created in the Russian Federation under Bank of Russia guidance through commercialisation of the specialised banks’ branches. The disbandment of the State Bank of the USSR was followed by changes in the chart of accounts, the establishment of a network of Central Bank cash settlement centres and their provision with computer technology. The Central Bank began to buy and sell foreign exchange in the currency market it established and to set and publish the official exchange rates of foreign currencies against the ruble.
In December 1992, as a result of the establishment of a single centralised federal treasury system, the Bank of Russia was no longer required to provide cash services for the federal budget.
The Bank of Russia carries out its functions, which were established by the Constitution of the Russian Federation (Article 75) and the Law "On the Central Bank of the Russian Federation (Bank of Russia)" (Article 22), independently from the federal, regional and local government structures.
In 1992-1995, to maintain stability of the banking system, the Bank of Russia set up a system of supervision and inspection of commercial banks and a system of foreign exchange regulation and foreign exchange control. As the agent of the Ministry of Finance, it organised the government securities market, known as the GKO
GKO
GKO , OFZ are abbreviations for and , respectively. They are government bonds issued by the state of Russia.GKOs are short-term zero-coupon Russian Government Treasury Bills. OFZs are coupon-bearing Federal Loan Bonds...
market, and began to participate in its operations.
In 1995, the Bank of Russia stopped extending loans to finance the federal budget deficit and centralized loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
s to individual sectors of the economy.
Regulator
The Bank of Russia is the main regulator of the bankBank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
ing industry. It is responsible for issuing banking license
License
The verb license or grant licence means to give permission. The noun license or licence refers to that permission as well as to the document recording that permission.A license may be granted by a party to another party as an element of an agreement...
s and setting rules of banking operations and accounting standards. The bank serves as a lender of last resort
Lender of last resort
A lender of last resort is an institution willing to extend credit when no one else will. The term refers especially to a reserve financial institution, most often the central bank of a country, intended to avoid bankruptcy of banks or other institutions deemed systemically important or 'too big to...
for credit organizations.
Ownershp of commercial bank
The Bank of Russia owns a 57.58% stake in SberbankSberbank
Sberbank Rossii is the largest bank in Russia and Eastern Europe. The company's headquarters are in Moscow and its history goes back to Cancrin's financial reform of 1841...
, which creates potential conflicts of interest both in the competitive landscape as well as in the regulatory policy of the Russian banking sector.
Monetary policy
It is responsible for the country's monetary policyMonetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
, including the level of the shortest interbank interest rate
Interest rate
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...
. By influencing the ruble interest rate, it also influences the price of the ruble in terms of foreign currencies.
Chairmen of the State Bank of Russia
| Name | Year |
|---|---|
| Georgy Matyukhin | 1990—1992 |
| Viktor Gerashchenko Viktor Gerashchenko Viktor Vladimirovich Gerashchenko , byname Gerakl , was the Chairman of the Soviet and then Russian Central Bank during much of the Perestroika and post-Perestroika periods.... |
1992—1994 |
| Tatiana Paramonova | 1994—1995 |
| Alexander Khandruyev | November 8 to 22, 1995 |
| Sergei Dubinin | 1995—1998 |
| Viktor Gerashchenko Viktor Gerashchenko Viktor Vladimirovich Gerashchenko , byname Gerakl , was the Chairman of the Soviet and then Russian Central Bank during much of the Perestroika and post-Perestroika periods.... |
1998—2002 |
| Sergei Ignatyev | 2002—present |