Issuing credit money is a specific function that distinguishes commercial banks from other financial institutions. Commercial banks issue deposits and credits; the money supply increases when banks issue loans to their customers and decreases when these loans are repaid. These banks are issuers of credit instruments of circulation. The loan provided to the client is credited to his bank account, i.e. the bank creates a deposit (demand deposit), and the bank's debt obligations increase. The owner of the deposit can receive cash from the bank in the amount of the deposit, as a result of which the amount of money in circulation increases. If there is a demand for bank loans, the modern emission mechanism allows for the expansion of money emission, which is confirmed by the growth of the money supply in industrialized countries. At the same time, the economy needs the necessary, but not excessive amount of money, so commercial banks operate within the limits set by the central bank, with the help of which the lending process and, consequently, the process of money creation are regulated.

One of the functions of commercial banks is to provide a settlement and payment mechanism. Acting as intermediaries in payments, banks perform transactions for their clients related to settlements and payments.

The issuing and founding function is carried out by commercial banks through the issuance and placement of securities (shares, bonds). By performing this function, banks become a channel for channeling savings for productive purposes. The securities market complements the bank credit system and interacts with it. For example, commercial banks provide loans to securities market intermediaries (parent companies) to subscribe for new issues of securities, and they sell securities to the banks for resale at retail. If the parent company in whose name the securities are registered sells them itself, then the bank can provide subscribers for the issued securities. In this case, the bank usually organizes a consortium to place securities. Liabilities of significant amounts issued by large companies can be placed by the bank through sale to its clients (mainly institutional investors), rather than through free trading on the stock exchange.

Having the ability to constantly monitor the economic situation, commercial banks provide clients with advice on a wide range of issues (mergers and acquisitions, new investments and reconstruction of enterprises, preparation of annual reports). Currently, the role of banks in providing clients with economic and financial information has increased.

3. Types of banks.

Today, in all developed national economies, there are two-tier banking systems: the Central Bank is an issuing bank and carries out other important functions. Along with this, there are “commercial banks with a range of different breadth (“differentiated versatility”), different goals and often also different groups of clients; they are engaged in banking operations, i.e. produce financial services that are needed in the market.”

By the nature of their activities, banks are divided into:

· emission

· commercial

· investment

· mortgage

· savings

· specialized (for example, trading banks).

Banks of issue issue banknotes and are centers of the credit system. They occupy a special position in it, being “banks of banks.”

Commercial banks are banks that provide lending to industrial, commercial and other enterprises mainly at the expense of the monetary capital that they receive in the form of deposits. According to the form of ownership, they are divided into: a) private joint stock, b) cooperative, c) state. At the early stages of the development of capitalism, individual banking firms predominated, but with the development of capitalism and especially during the era of imperialism, the overwhelming majority of all banking resources were concentrated in joint-stock banks. The development of state-monopoly capitalism found expression in the commercial banks of some countries (for example, in France).

Investment banks are engaged in financing and long-term lending to various sectors, mainly industry, trade and transport. Through investment banks, a significant part of the needs of industrial and other enterprises for fixed capital is satisfied. The development of this link in the credit system is characteristic of a modern market economy. Unlike commercial banks, investment banks mobilize the vast majority of their resources by issuing their own shares and bonds, as well as obtaining loans from commercial banks. At the same time, they play an active role in the issue and placement of shares of industrial and other companies.

Mortgage banks provide long-term loans secured by real estate - land and buildings. They mobilize resources through the issuance of a special type of securities—mortgage notes, which are secured by real estate pledged to banks. The clients of mortgage banks are farmers, the public, and in some cases entrepreneurs.

Farmers often use a mortgage loan to purchase land. Mortgage loans are used in part to purchase machinery, fertilizers and other inputs. In addition, the purchase of land by these farmers gives them the opportunity to expand their farms.

Obtaining mortgage loans (in the US) affects different groups of farmers differently: while large capitalist farmers use these loans to expand their land holdings and farms, small farmers are adversely affected by mortgage debt and contribute to their ruin. The total mortgage amount significantly exceeds farm mortgage debt, including urban property mortgages.

Mortgage loans are provided in the United States by various types of banks (commercial, savings), as well as insurance companies, and savings and loan associations.

Specialized banking institutions include banks that specifically engage in a particular type of lending. Thus, foreign trade banks specialize in lending for export and import of goods.

4. Principles of activity of commercial banks.

The first and fundamental principle of a commercial bank is to work within the limits of actually available resources. A commercial bank can make non-cash payments in favor of other banks, provide loans to other banks and receive money in cash within the limits of the balance on its correspondent accounts. The ability to independently create funds in the current accounts of their clients beyond their existing resources is limited.

Working within the limits of actually available resources means that a commercial bank must ensure not only quantitative correspondence between its resources and credit investments, but also ensure that the nature of banking assets matches the specifics of the resources mobilized by it. First of all, this applies to the timing of both. Thus, if a bank attracts funds mainly for short periods (short-term or demand deposits), and invests them mainly in long-term loans, then its ability to pay its obligations without delay (i.e., its liquidity) is at risk.

The issue of cash is its release into circulation, which increases the total amount of cash. The monopoly of issuing cash in each country belongs to the central state banking authority: in Russia - the Central Bank of the Russian Federation, in the USA - the Federal Reserve Bank.

Based on the cash turnover of commercial banks and prepared analytical reports, the Central Bank predicts the size of the expected issue. In this case, it is very important not only to determine the optimal size of the proposed emission, but also to establish in which regions it should be carried out. The need for cash of legal entities and individuals served by commercial banks is constantly changing.

It is difficult to bring cash from the center on a daily basis, especially to remote regions. At the same time, the issue of cash is always decentralized. Therefore, the following technology is being implemented to deliver cash to the regions from the Center.

Cash issuance is carried out by the Central Bank of the Russian Federation and its regional cash centers containing reserve funds and working cash. The reserve funds of the RCC store a stock of banknotes intended for their release into circulation in the event of an increase in the need of the economy of a given region for cash. These banknotes are not considered money in circulation, they do not move, do not accumulate in the form of treasure, do not serve as a means of payment, therefore they are reserve. Cash from commercial banks is constantly received and dispensed into the working cash register. Money in the cash register is in constant motion; they are considered money in circulation.

If the amount of cash receipts in the account of commercial banks exceeds the established limit for a given RCC, then the money is withdrawn from circulation and transferred to the reserve fund. When a commercial bank needs cash, the reverse process occurs. From the account of a commercial bank, within the limit of its free reserve, the RCC issues the required amount of cash. RCC is obliged to provide services to commercial banks free of charge.

How is cash issued? Let us assume that the majority of commercial banks served by the RCC have an increasing need for cash, but the flow of money into their operating cash desks does not increase equivalently. In this case, the RCC will be forced to increase the release of cash into circulation. To do this, the RCC requests permission from the Central Bank of the Russian Federation, and upon receipt, transfers cash from the reserve fund to the working cash register of the RCC.

For this RCC this will be an emission operation. It should be borne in mind that when one RCC issues money, another RCC may withdraw cash from its circulating cash within the established limit. Therefore, the actions of one RCC cannot be used to judge emissions throughout the country, which in this case covers most regions.

The Board of the Central Bank of the Russian Federation draws up a daily balance sheet based on information from the RCC network: where cash was issued and where it was withdrawn.

Rice. 1

money issue bank deposit

The monopoly right to issue cash on the territory of the country is usually vested in the central bank of the state. Currently, cash emission is carried out mainly in the form of issuing banknotes, which are banknotes issued by the central bank and legally recognized as an official means of payment and payment.

In a number of countries, the central bank has a monopoly on the issue of billon (change) coins, but basically in world practice they are minted by the Ministry of Finance (Treasury). The central bank buys coins at face value and issues them into circulation along with banknotes.

Since the nominal value of modern money is much higher than the cost of its production, its issue makes it possible to obtain the so-called seigniorage, or emission income. It represents the difference between the nominal value of a banknote (coin) and the real costs of its production and release into circulation. Obviously, the issue income from the issue of banknotes is greater, the larger their denominations. It is calculated as the ratio of growth in the monetary base to gross domestic product or government budget revenues. Seigniorage is fully transferred to the state income.

The issue of cash by the central bank does not coincide with the technical process of its production. The arrival of new printed banknotes into the central bank's vault does not increase the cash supply in the national economy. Banknote issue is carried out in the process of the central bank carrying out a number of its operations.

Issue of cash is the release by the central bank of banknotes into circulation to satisfy the additional need of economic agents for cash, which arose as a result of the excess of cash issuances over their receipt by banks in the country as a whole.

Thus, the main sources of cash entering the economy are:

• - central bank lending to commercial banks;
• - purchase of government securities by the central bank;
• - purchase by the central bank of foreign currency and gold.

It should be borne in mind that the volume of banknotes in circulation increases (that is, banknotes are issued) only if the net domestic and foreign assets of the central bank increase.

The net domestic assets of a central bank are the difference between the amount of loans it makes to commercial banks and the government and the amount of funds held by commercial banks and the government in accounts at the central bank. Thus, if, when the central bank issues loans to commercial banks and the government, the volume of their funds in accounts with the central bank simultaneously increases by the same amount, then the balance sheet item “Banknotes in Circulation” will not increase due to these sources.

The acquisition of foreign currency by the central bank through issuance is, in practice, common and widespread. Foreign assets are necessary for the country's international transactions and payments; they are reserves that the central bank uses to maintain the stability of the purchasing power and exchange rate of the national currency.

From the simplified balance sheet of the central bank it is clear that the value of the item “Banknotes in circulation”, in addition to the volume of active operations of the central bank, is also influenced by the structure of the monetary base. The greater the reserves of commercial banks, the less, other things being equal, the issue of banknotes.

So, the channels for issuing cash are the active operations of the central bank. The issue itself occurs as a result of an increase in the liabilities of the balance sheet of the central bank; therefore, the issue of banknotes is ensured by the assets of the central bank. Thus, in modern conditions, the issue of banknotes is fiduciary (that is, not backed by gold), their circulation is based on the trust of the country's population in their issuer.

The mechanism of modern money emission determines the credit nature of the security of banknotes. When the issue is carried out as a result of lending to commercial banks, it is secured by the obligations of commercial banks; when an issue occurs as a result of government lending, it is secured by government obligations (government securities); when the issue is carried out during foreign exchange transactions, it is secured by foreign currency, which can be considered as obligations of foreign central banks (states).

Ensuring banknote issue directly affects the stability of the national currency, therefore, in many countries, the norms and methods of such provision are determined by law. Each country has its own specifics, however, as a rule, only absolutely reliable short-term obligations are allowed to be used as collateral.

Cash issuance is carried out by the central bank in order to meet the needs of business entities and the population for additional means of circulation and payment. When the volume of non-cash funds in the deposit accounts of commercial banks increases due to economic growth, inflation or the multiplication of deposits, the need of their clients for cash increases accordingly.

Commercial banks issue cash to customers from their operating cash desks, which contain a certain volume of banknotes, equal at each time to the difference between cash receipts into the operating cash desk and cash withdrawals from it.

Cash held in the operating cash desk is an asset that does not generate income for a commercial bank, so banks are not interested in storing large reserves of banknotes and hand over their surplus to the working cash desk of the central bank. If, as the clients’ need for cash increases, the commercial bank’s operating cash desk does not have the required amount, it applies to the central bank for an additional amount of cash.

The central bank issues banknotes to a commercial bank from its working cash to the extent of that bank's excess reserves held in accounts with the central bank. Simultaneously with the issuance of cash, the amount issued is debited from the correspondent account of a commercial bank and transferred to the account of the central bank.

In addition to issuing cash from its working cash desk, the central bank also carries out operations to receive cash. If the funds received in the working cash register are not enough to satisfy the demand for cash of commercial banks, the central bank transfers the required amount from its storage (reserve fund) to the working cash register. There is an increase in the volume of cash in circulation, that is, the central bank issues cash.

As a rule, these are central banks vested with the right to issue (issue banknotes in all forms). The state usually grants the issuing right to only one bank, since granting the right to issue money to all banks would upset the country's monetary circulation. EB has such large funds that none of the other banks can have, because its liabilities are budget funds and cash in circulation. This circumstance gives him the opportunity to provide support to all other banks and manage their activities. The EB becomes the center for organizing banking in the country, around which all other banks and other credit institutions are grouped.

Characteristic phenomena for the Central Bank:

Issue and control of currency

Settlement and reserve center of banks

Public debt management and state budget execution

Acting as a “lender of last resort”, “bank of banks”

Establishment of economically justified limits and standards for the activities of banks, including the official Central Bank rate on loans

Determination of priority goals of monetary and monetary policy and their implementation

Conducting scientific research

Determination of the legal basis and principles of corporatization of credit and financial institutions, markets for short- and long-term credit transactions, as well as types of payment elements circulating in the country

Formation of an effective mechanism for monetary regulation of the economy

3. Other operations of commercial banks

Leasing

Long-term rental of machinery, equipment and other movable and immovable property for industrial purposes. But this is not an ordinary lease, but a specific one, bringing leasing closer to a loan. Unlike leasing, as a rule, it involves not 2, but 2 or more entities (but there may also be intermediaries, guarantors, etc.):

1) The user (leasing recipient, lessee) finds a company that produces the equipment he needs, discusses the technical side of the matter with him and enters into a preliminary supply agreement

2) The lessee (sometimes together with the manufacturer) approaches the leasing company with a request to buy this equipment for him from the supplier, and then provide him with temporary possession

3) The leasing company, having purchased this equipment and becoming its owner, transfers it for temporary use to the lessee for a fee

If the potential lessee does not have complete information about the producers of goods, it is simply more profitable for the lessee to contact the leasing company with a request to determine the supplier of the equipment he needs than to search for a supplier himself

Þ leasing includes purchase and sale relations and rental relations. But the key point of the relationship here is credit operation, and the key figure is the leasing company, which provides the tenant with a service. The lessor buys property in ownership at full cost, but not for himself, but for the user, who receives and uses this property, periodically paying the appropriate fees; leasing can be considered as a transfer of property for temporary use on the terms repayment, urgency, payment, those. qualify as fixed capital loanÞ from an economic point of view, leasing is a specific loan provided by the lessor to the lessee in the form of property transferred for use

Factoring and forfaiting

Special forms of lending, in which, like leasing, credit relations are only one of the components of a more complex set of relations

Factoring.

Purchase by a bank or a specialized factoring company of the supplier’s claims to the buyer and their collection for a remuneration

The essence is that a factoring company (factor firm) buys from its clients their payment requirements for buyers on the terms of immediate payment of 80-90% of the cost of invoiced supplies and payment of the remainder, minus commissions and interest for the loan, within strictly defined periods, regardless of receipt of revenue from buyers. Of course, the subsequent payment from the buyer is credited to the account of the factor company

In accordance with the Convention on M/A Factoring, an operation is considered factoring if it satisfies at least two of the following requirements:

Availability of lending in the form of prepayment of debt claims

Maintaining supplier accounting, primarily sales accounting

Collection of his debt

Supplier credit risk insurance

The client is obliged to pay the bank a fee in the form of commission payments for managing the client's accounts, including credit risk and factoring fees. The amount of the commission fee (usually 0.5-3% of the total amount of invoices purchased) depends on the client's trading turnover, the degree of risk (depending on the solvency of the client's debtors) and the amount of clerical work required (depending on the number of invoices)

In addition, the client pays the bank a loan interest on the daily balance of the advance payment on accounts

Types of factoring operations:

1. Open or closed

Criterion - notification of the debtor about the participation of a factoring company in the transaction

2. With or without right of recourse

(Regression- return request to the supplier to return the amount paid)

3. With the condition of crediting the supplier in the form of advance payment or payment of claims by a certain date

By concluding a factoring agreement, the factor firm takes on the possible risk of non-payment by the buyer. Therefore, before concluding such an agreement, it must carry out preliminary work to study the solvency of the clients of the supplier it serves. To do this, the supplier informs the factor company (the factoring department of the bank) a list of its customers and the expected volume of supplies of goods. The factor firm checks the solvency of each buyer and informs the supplier of possible credit limits for each buyer. Within these credit limits, the supplier can ship products without any risk

In addition to credit and accounting and control operations, factor companies provide legal, i-, consulting and other services

Forfaiting

Forfaiting- lending to the exporter by purchasing bills of exchange or other debt claims. This is a form of transformation of a commercial loan into a bank loan

The seller in forfeiting is usually the exporter who has fulfilled his obligations under the contract and seeks to collect the importer's payment documents in order to receive cash. The buyer (forfeiter) is usually a bank or special company. The buyer (bank) assumes commercial risks associated with the insolvency of importers without the right of recourse (turnover) of these documents to the exporter

The forfeiter acquires debt claims minus interest for the entire period for which they are issued. Thus, the export transaction turns into cash

The forfeiter can store purchased documents at his place. In this case, the funds spent by him are considered as capital investments. But he can sell them to another forfaiting company also on a non-negotiable basis. When the payment is due, the final holder of the documents presents them to the bank for payment.

Forfaiting appeared under the influence of the rapid growth in the export of expensive equipment with a long production period, increased competition in world markets and the increasing role of credit in the development of world trade. It was also used by Vneshtorgbank of the USSR, and is gradually being developed in modern Russian credit policy.

Trust

Many commercial banks assume the role of a fiduciary and, in this role, perform a variety of operations for their individual and corporate clients. Main categories of trust services for f/l:

1 Disposition of property after the death of the owner

A detailed inventory of property must be drawn up, debts must be paid, and the remaining amount must be distributed among the heirs according to the law.

2 Property management on a trust basis and trusteeship

Property management in the form of a trust can have a different legal basis: a will, a special agreement, a court order. The types of trusts managed by banks are very diverse:

Life: established by a person in agreement with the bank. For example, a client transfers money to a bank in trust, instructing it to pay income during his life, and after death to transfer the capital to his heirs

Insurance: arises when a client appoints a bank as trustee of an insurance policy and instructs it to pay the proceeds to his wife upon his death and to pass on the policy amount to his children upon the death of his wife

Corporate: established in the form of property pledged to the bank to secure the issue of company bonds

Trust for the benefit of employees

a) In the form of a pension fund

The entrepreneur contributes money according to an approved scheme to a fund managed by the bank for payments to employees upon reaching retirement age. If employees contribute money to the fund, then it is called a pension trust with participation; if not, it is called without participation.

b) In terms of profit sharing

The entrepreneur transfers part of the profit to a trust fund opened in the bank for the subsequent distribution of contributions and subsequent income from the fund in favor of the company's employees upon reaching retirement age or at another date

3 Agent functions

They differ from a trust in that in the case of a trust, the trustee receives the legal right to dispose of the property, while in an agency relationship, the right remains with the owner. Are as follows:

Storing valuables in a safe

Storage of property with active functions: the bank buys and sells valuables, receives income from them, acting in accordance with the instructions of the principal

Control: the bank performs all the functions of a property custodian and actively manages the property, for example, analyzes the state of the securities portfolio, makes recommendations and suggests ways to invest capital, etc. If the bank is in charge of real property, the bank can rent it out , operate in accordance with the instructions of the principal

Banks also perform agency functions for companies:

Transfer agent: the bank performs operations for the corporation to transfer ownership of shares and registered bonds from one owner to another

Share Registrar: the bank keeps records of issued securities to prevent their excessive issue, which is punishable by law

The bank plays a role depository of valuables during f-reorganizations

The bank takes over details of the dividend payment agent on shares and interest (as well as repayment of principal) on the company's bonds

The bank's trust department provides numerous services and consultations to individual managers, guardians and administrators managing other people's property on a trust basis

Transactions with securities

The bank's investment portfolio is strictly structured by law. This means that the state sets a percentage rate, according to which the capital portion (up to 90%) should consist of state securities, the rest - private enterprises. The primary placement of all types of securities rights occurs through auction sales, where applications offering the highest price (bid) are satisfied first. Secondary circulation occurs on the over-the-counter market. The market is created by a group of dealer firms conducting active operations for the purchase and sale of government obligations. In conditions of economic recession, the government, through the Central Bank, tries to stimulate economic activity and buys government obligations from dealers, increasing their reserve accounts. In conditions of an inflationary boom, the state sells its obligations to dealers and thereby reduces their liquidity. Corporate bonds are much more exposed to the risk of default than government bonds. Banks buy only high-quality securities in accordance with the credit agencies' assessment of the risk associated with them

There are two types of bank investment policies:

Passive: characterized by an even distribution of investments between issues of different maturities to ensure good profitability and liquidity

Aggressive: This strategy is followed by large banks that have a large portfolio of investment securities and strive to receive maximum income from this portfolio.

Topic 3. Structure of the credit system and characteristics of individual credit institutions

3.1. Banks of issue

These are banks vested with a monopoly right to issue banknotes, regulate monetary circulation, store gold and foreign exchange reserves and manage the exchange rate of the national currency.

Issuing banks: Central, National, Reserve.

Historically, issuing banks arose as private or public banks, both issuing banknotes and having their own clientele. Subsequently, the issuing right became exclusively a state monopoly and issuing banks gradually reduced direct transactions with clients. This meant that all cash was concentrated in the issuing bank. All other banks operate on the "reverse cash" principle.

The entry of cash into money circulation channels occurs in the form of replenishment of the cash desk of a commercial bank. In addition, all commercial and specialized banks carry out their settlements through issuing banks. If necessary, banks can use a loan from the issuing bank. Thus, all non-cash and cash circulation is concentrated in the issuing bank and its structures.

The Bank of Issue performs the following main functions:

1) Is the settlement and reserve center of the banking system;

2) Issue and control money circulation;

3) Management of public debt and certain functions for the execution of the state budget;

4) Lending to commercial banks;

5) Monetary regulation;

6) Banking regulation.

In most countries, the functions of the Central Bank are assigned to one banking institution (Bank of England 1844, Bank of France 1848, Bank of Spain 1874, US Federal Reserve 1913).

According to their organizational and legal form, issuing banks can be:

1) Central Bank with 100% state participation in the formation of the capital of this bank.

2) A joint stock company, one of the shareholders of which is the state.

3) A system of independent banks, collectively performing the functions of an issuing bank.

Previous

· Commercial banks:· Universal banks.

· Specialized banks: · Investment banks; · Savings banks; · Innovative banks; · Mortgage banks; · Consumer credit banks; · Industry banks; · In-production banks.

· Non-banking financial institutions:· Investment companies ; · Investment funds ; · Insurance companies ; · Pension funds ; · Pawnshops ; · Trust companies, etc.

The Russian banking system is two-tier:

· at the first level there is the Central Bank of Russia, which performs the functions of an emission center, responsible for maintaining the stability of the banking system, carrying out monetary regulation of the economy, performing a legislative function and the function of lenders of last resort (the function of the bank of banks);

· At the second level of the banking system, commercial banks develop their activities.

The banking system, consisting of a Central Bank that organizes money circulation and does not serve clients, with the exception of banks, as well as banks lending to enterprises, organizations and the population, is typical for all developed countries with market economies.

The banking system of Russia is important for the development of the country's economy, a dynamically developing system.

central bank- the main regulatory body of the credit system of a country or group of countries.

The Central Bank performs the following main functions:

· issue of banknotes and coins;

· implementation of monetary policy;

· is a “bank of banks” - they serve as a settlement center for the banking system, provide loans to it, and in some countries supervise the activities of banks;

· refinancing of credit and banking institutions (including by setting the refinancing rate, pawnshop rate, etc.);

· management of official gold and foreign exchange reserves;

· implementation of monetary policy;

· regulation of the activities of credit institutions;

· government bank.

An important issue in the activities of the central bank is its independence from the executive branch and the government. In this regard, the economic and political independence of the central bank is highlighted.

Economic independence refers to the ability of the central bank to use the monetary policy instruments at its disposal without any restrictions. That is, the central bank is vested with a certain range of powers aimed at making operational decisions in the conduct of monetary policy.

Political independence is understood as the level of independence of the central bank in relations with government bodies in the appointment of bank management and in the development and implementation of monetary policy.

Commercial Bank- a credit institution that carries out banking operations for legal entities and individuals (settlement and payment transactions, attracting deposits, providing loans, as well as operations on the securities market and intermediary operations).

Interest rates on loans issued are higher than interest rates on deposits. The difference between these indicators is bank profit - margin. The epithet “commercial” in relation to a bank is conditional, because it means that the main goal of the organization’s activities is to make a profit. At the same time, there are banks that specialize more deeply in individual banking services.

Banking services include:

· lending to legal entities and individuals;

· currency transactions (only authorized banks);

· operations with precious metals;

· access to the stock market and Forex;

· maintaining current accounts of business entities;

· exchange of damaged banknotes (torn, burnt, washed banknotes) for undamaged ones;

· mortgage;

· car loans;

Universal bank- a bank that carries out all or most of the main types of banking operations.

Universal banks are more stable than specialized banks, as they combine commercial and investment activities. They can take full advantage of diversifying their operations. It is more convenient for clients to deal with one bank than with several specialized intermediaries. The clients of universal banks include both small depositors and large companies.

Universal banks carry out a large number of banking operations: maintaining deposit accounts, non-cash transfers of funds, accepting savings, issuing a variety of loans, purchasing securities, transactions by proxy, storing valuables in safes, etc. Due to the wide selection of services offered and the presence of a large number of clients, they suffer less from fluctuations in the profitability of individual banking operations and the situation in financial market segments.

Specialized bank– a credit organization specializing in certain types of banking activities.

Investment bank- a financial institution that organizes for large companies and governments to raise capital on global financial markets, and also provides advisory services for the purchase and sale of businesses, brokerage services, being a leading intermediary in trading stocks and bonds, derivatives, currencies and commodities, and also produces analytical reports on all markets in which it operates.

A typical investment bank has the following functions:

· Underwriting and Trading of securities;

· Offering brokerage services to private and institutional investors;

· Mergers and acquisitions services;

· Financial analytics and research;

· Market makers for certain types of securities.

Savings bank (savings and loan bank, savings Bank or savings bank) - a credit institution specializing in attracting cash savings and temporarily free funds of the population in the form of savings deposits on which interest is paid.

An innovation bank is a specialized bank, the main operations of which are lending to venture capital, the latest developments, technical and technological progress. The innovation bank draws its main resources from its own funds and customer deposits. Typically, innovation bank loans are long-term in nature.

Mortgage bank- a specialized bank engaged in providing mortgage loans, reselling mortgage-backed securities and providing services related to these activities.

Consumer credit banks- a type of banks that operate mainly through loans obtained from commercial banks and issuing short- and medium-term loans for the purchase of expensive durable goods, etc.

Consumer loan- a loan provided directly to citizens (households) for the purchase of consumer goods. Such a loan is taken not only for the purchase of durable goods (apartments, furniture, cars, etc.), but also for other purchases (mobile phones, household appliances, food). It comes either in the form of selling goods with deferred payment, or in the form of providing a bank loan for consumer purposes, including through credit cards. In this case, a fairly high percentage is charged.

Typically, a consumer loan comes with additional fees and charges that increase the real cost of the loan and form the so-called hidden interest rate.

Non-banking financial institutions are institutions that are not formally banks (do not have a banking license), but whose main activities are related to the provision of financial services and the implementation of operations that are in many ways similar to banking ones.

Investment company- a legal entity (not a credit institution) that has a license from the Federal Financial Markets Service to conduct at least brokerage and/or dealer operations.

Investment fund- an institution that carries out collective investments. Its essence is the accumulation of savings of individuals and legal entities for joint (including portfolio) investment through the purchase of securities, rather than real productive assets. At the same time, due to the fact that the acquisition of securities is carried out by a professional market participant, this allows minimizing the risks of private investors.

Types of investment funds

· Mutual investment fund - a form of joint investment.

· Investment Fund of Russia - a state fund for co-financing investment projects.

· Mutual fund is a form of joint investment.

· A hedge fund is a private, unregulated investment fund that is not available to the general public and is managed by a professional investment manager.

· Exchange Traded Fund (ETF) is an open-end index fund whose shares are traded on an exchange.

· Check investment fund - a specialized fund created in Russia during the period of voucher privatization in the early 1990s, with the aim of assisting the population in investing privatization checks (vouchers) and ensuring professional management of the assets of this fund.

Functions of investment funds

Investment funds perform the following functions:

· accumulation of savings of individual investors;

· more efficient management of investment resources, which individual investors cannot provide due to the lack of necessary professional skills and experience;

· diversification of risks by investing funds of individual investors in various financial market instruments;

· reducing the costs of operations on the securities market due to a large number of operations.

An insurance company is a historically defined social form of functioning of the insurance fund; it is a separate structure that carries out the conclusion of insurance contracts and their servicing.

The scope of activity of insurance companies is commercial insurance; to carry out insurance, an insurance company requires a license from the state insurance supervisory authority.

Subjects of the insurance business are actuaries, insurance brokers, mutual insurance companies and insurers.

Pension Fund- a fund intended for the payment of old-age or disability pensions. Pension funds are divided into state and non-state depending on the management company.

Pawnshop(named after Lombardy, a region of Italy) is a specialized commercial organization whose main activities are providing short-term loans secured by movable property of citizens and storing things.

A trust company is a company specializing in operations involving trust management of property, a portfolio of securities or inheritance.

Credit organisation is a legal entity that to make profit as the main goal of its activities on the basis of a special permit (license) of the Bank of Russia has the right to carry out banking operations.

A credit organization is formed on the basis of any form of ownership as a business company.

Credit organization It is prohibited to engage in production, trade and insurance activities.

Credit organizations are divided into two groups:

§ non-bank credit organizations.

Bank

Banks- these are credit organizations that have the exclusive right to collectively carry out the following banking operations:

§ attracting funds from individuals and legal entities into deposits;

§ placement of these funds on your own behalf and at your own expense on the terms of repayment, payment, urgency;

§ opening and maintaining bank accounts for individuals and legal entities.