Banking system: types and their features

Banking systems are an integral part of various economic models. In this case, there may be significant differences between them.

Banking system

Before proceeding to the study of what types of banking world systems there are, it is necessary to understand the definition itself. This terminology is used to describe the aggregate of non-bank credit institutions and the banks themselves, which function within the framework of a single legal and financial-credit mechanism.

This system includes both the national bank and private structures, including various credit and settlement centers. The key function of the national bank is to conduct a state currency and issuing policy. It is the center of the country's reserve system.

The banking system can also be related to those specialized companies that support the activities of credit institutions.

System Components

Within the framework of the theme "The banking system - the concept, types, levels, elements" it is worth considering the institutional components that form the system.

You can start with credit organizations. We are talking about a legal entity whose main purpose is to make a profit through banking operations. To carry out such activities, a license is required from the central bank. In this case, all operations of such organizations are conducted in strict accordance with national legislation.

If we talk about Russia, then the laws of the Russian Federation allow us to open credit organizations using any form of property. It is also possible to form various associations and unions that are oriented toward protecting the interests of their members, while leaving aside tasks related to the extraction of profits.

Understanding what the banking system is like, its elements and types, it is necessary to determine the following institutional component, which is its component. It's about the bank. This term is understood as a credit institution that has the right to carry out certain financial transactions in strict accordance with the legislation of the Russian Federation. These operations include the following services and processes:

- opening and maintaining bank accounts of legal entities and individuals;

- attraction of deposits of various persons;

- placing these funds at their own expense and on their own behalf on terms of urgency, pay and return.

It is important to understand the following fact: if in the activities of the organization there is not even one of the operations listed above, it is considered a non-banking structure.

Foreign bank. This term is used in some countries to determine the credit institution that was recognized by the bank on the basis of the laws of the state where it was registered.

A non-bank credit institution is also part of the overall system. As its distinctive feature, it is possible to determine the possibility of carrying out individual banking operations, which are provided for by national legislation.

Market model

Types of the banking system include various forms of its organization. One of the most common species is market. This system has the following characteristics: the state is not a monopolist in the sphere of banking and its influence on various credit structures is limited to the establishment of basic parameters and development principles.

With this model, decentralization of banking sector management is in place. There is also no mutual responsibility: the state is not responsible for the financial performance of the above-mentioned organizations, and private credit institutions, in turn, are not liable for transactions conducted by the state.

Also, under such a system, the state has an obligation to maintain order in the national economy. This fact, as well as a large number of private credit organizations in the system, leads to the need to form a central bank or an organization that will perform its functions. One of the main tasks of such a bank is to monitor other structures that participate in credit relations.

Attention deserves the following fact: the status of the central bank is so special that it is singled out as a separate banking type of financial system Or, more precisely, the level. For this reason, market systems are in fact always multilevel.

Accounting and distribution model

This type of organization of banking activity is used mainly in those countries where the democratic system is unpopular.

Such a system is characterized by the state's monopoly on the establishment of banking institutions and the conduct of operations. The distinctive qualities of this model include the appointment of bank managers by the state and the definition of state responsibility for the results that were obtained as a result of banking activities.

As a consequence, with this model the range of credit institutions is rather narrow. This means that the provision of banking services is handled by either a small number of credit institutions that specialize on a sectoral basis, or a single state bank.

Levels of systems

Considering the types of building a banking system, one must take into account the fact that some of them are built on the principle of determining the order of relationships that are formed between different credit organizations.

These are multilevel and single-tier banking systems.

A single-level model is used primarily in countries with a totalitarian system, where one state bank operates . This model is also relevant in the initial stage of the development of the banking system.

As for the multi-level system, it is characterized by differentiation of credit organizations by levels. At the same time, the central bank is always on the first place, regardless of the number of allocated levels and credit institutions in general.

The system operating in Russia

If you pay attention to the types of the banking system of the Russian Federation, you can come to the conclusion that a multilevel model operates in the CIS. At the same time, this system has the following structure: the Bank of Russia, various credit organizations, as well as representations and branches of foreign banks.

But this is not limited to the Russian banking system. The types it includes include the operation of specialized organizations on the territory of the state that do not conduct banking operations. At the same time, such organizations are focused on ensuring the activities of credit institutions and banks.

Given that the modern banking system in Russia is a system of type Corresponding to the market model, the direction of credit activity, functioning with it, consists of several levels:

- central bank;

- banking sector (savings, mortgage and commercial banks);

- insurance sector (pension funds, non-bank specialized credit institutions and insurance companies).

American and Japanese models

There are other areas in which the banking system was implemented. Their types differ markedly depending on the region.

The American model is characterized by parallel action of the federal reserve system, as well as investment, savings, commercial banks and forensic savings associations.

The Japanese banking system looks different. Types of financial institutions operating in this country can be described as follows: central bank, postal savings banks and commercial banks.

Conclusion

With all the abundance of possible models through which a banking system can be organized, types that imply several levels, it makes sense to define how more progressive.