Money. Credit. Banks. Balance sheet and operations of commercial banks (lecture notes)

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Money. Credit. Banks. Balance sheet and operations of commercial banks (lecture notes)

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Balance sheet and operations of commercial banks

Balance sheet diagram of a commercial bank.

Assets: cash on hand and cash equivalents; granted loans; financial investments; other assets. Liabilities: liabilities of a commercial bank; attracted funds of the bank's customers; loans received from the Central Bank; borrowed funds from credit institutions; other obligations; own funds of a commercial bank.

Cash on hand and equivalent funds - cash at the disposal of the bank, balances on correspondent accounts with the Central Bank, balances on correspondent accounts with other banks, funds booked on an account with the Central Bank as minimum reserves. Bank loans are classified according to various criteria:

1) in terms of the category of the borrower (legal and natural persons);

2) in terms of term (short-term up to 1 year, medium-term 1-3, long-term more than 3 years);

3) From the point of view of the form of the loan: - cash loan (money); - a credit loan (the bank's obligation to pay monetary claims to the client if he cannot do it on his own);

4) depending on the object of lending: to finance fixed assets or working capital;

5) in terms of the collateral provided: unsecured. Partially secured, secured.

Financial investments - investments of the bank's capital in various financial instruments (securities, foreign currency). Investment portfolio - investments made by investors in various financial instruments of different duration, different liquidity and profitability, managed as a whole. For commercial banks, the investment portfolio = "portfolio of securities" (because securities for them are the only financial investment instrument).

Commercial bank resources

All resources of a commercial bank are divided into own and attracted. 3 groups of funds attracted by a commercial bank:

a) funds of bank clients;

b) loans from the Central Bank;

c) funds from credit institutions.

Bank deposit (deposit) - funds placed by the depositor in a commercial bank on certain conditions. A bank account is a unit of storage of economic information about a specific banking operation. Classifications of bank deposits: - in terms of the category of the depositor (legal and physical); - form of withdrawal of funds (on demand and term deposits); - term of the deposit agreement. On demand - pick up when you want, without warning; motive - the desire to participate in non-cash payments. Term deposit - for a certain period; the goal is to generate income. Certificate - a written certificate of the bank on the deposit of funds, certifying the right of the depositor to receive the amount of the deposit and interest on it after the expiration of the established period. A bank bill is a security containing an unconditional debt obligation of the drawer (bank) to pay a certain amount to the bill holder in a specific place at a specified time to the legal bearer of the bill. The interbank loan market is the market for interbank loans. Lenders - banks that have funds, seeking to place them profitably; borrowers - banks that are in need of credit resources. The interest rate on interbank loans depends on the level of demand for free resources and on the volume of their supply. The interest rate is the result of an agreement between banks. Own funds of a commercial bank consist of basic capital (funds of a sustainable nature: authorized capital, share premium of the bank, reserve fund, economic development fund, retained earnings of the current year) and additional capital (funds, the amount of which may vary: profit of the reporting year, not confirmed by an audit ; provision for possible losses on loans; funds of the bank, data on which are not confirmed in the auditor's report).

Authorized capital is the economic basis of the activities of a commercial bank. The procedure for formation depends on the legal form of the bank. The Bank of Russia has determined the requirements for the minimum amount of authorized capital - it must be equivalent to 1 million euros. Functions of equity capital:

a) protective (creating a reserve);

b) operational;

c) regulating.

N1 bank own funds adequacy ratio in Russia:

H1=K/(Ar-SSr), where K is capital; Ap - risk-weighted assets; Ср - the amount of created reserves for depreciation of securities

Currency operations of banks

Foreign exchange transactions can be classified according to their purposes: - currency exchange; - speculative (hope for a profitable change in the exchange rate) and arbitrage (making a profit from price differences in different markets => no risk). From the point of view of time and technology for carrying out foreign exchange transactions: - cash (spot transactions); - urgent operations. Cash registers are intended for:

a) quickly obtain foreign currency for the purpose of carrying out planned operations with it;

b) carrying out short-term speculative operations;

c) insurance of currency risk. Characteristic features of spot operations: 1. Short period of implementation; 2. the presence of the tradable asset among the parties to the transaction. The parties negotiate the exchange rate. The highest rate is telegraphic translation. Because with it, foreign currency is paid by the bank immediately or the next day after receiving the transfer from the foreign bank. For futures transactions it is typical:

1) A long period of transactions between the moment of conclusion and the moment of execution (~30 days);

2) at the time of concluding transactions, the presence of the asset being traded is not necessary. The main purpose of forward currency transactions:

a) receipt of the required currency by the time the main foreign economic contract is executed;

b) currency speculation and arbitrage;

c) hedging currency risks. Main types of currency transactions: forward transactions (outright transactions);

b) futures transactions;

c) option transactions.

A. Carried out on the over-the-counter market. The buyer of the currency says that he will buy the currency after a certain period of time at a certain price (negotiable). After the expiration of the period, the market price of the currency may be lower than the agreed one, then the loss. If higher - then profit. There are 2 options for the execution of such an agreement: - by real delivery of the currency being sold (delivery forward); - by payment by the losing party of the difference between the forward (which was agreed upon) rate and the current rate at the time of contract execution (settlement forward).

B. Futures transactions are made on the exchange. Differences from a forward transaction arise from the nature of exchange trading. First of all, this is the standard nature of exchange contracts (in relation to the type of currency traded, contract size, execution period). A futures contract is a broker's obligation to a clearing house to sell or buy currency in the future.

C. Option operations of banks with currency. They are a combination of two types of contracts - for the purchase or sale of currency and for the purchase or sale of the right to execute or not to execute the contract. A contract to buy the right to sell a currency is a call option, and to buy the right to buy a currency is a put option.

Author: Shevchuk D.A.

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