Commercial banks are a tool of creation or enrichment?

The affected topic can not in principle be stated on one page of printed text. Therefore, we schematically and fragmentally show a joint-stock commercial bank with foreign investments. Do banks always develop or often degrade (hiding behind bright advertising leaflets)? Is the destiny of the sold institution a private matter only to the buyer? Is the existing supervision of the Central Bank sufficient for the activities of the top management of a particular commercial bank?

Brief coverage of the macroeconomic role

The world economy is dominated by two-tier banking systems, headed by central state banks. The first level consists of commercial banks - multifunctional agents of the state economy. Under the leadership and in cooperation with the Central Bank of his country, commercial banks operate. The monetary circulation (cash and non-cash) is made. An important economic function of commercial banks is lending to businesses and households. They are under the control of the Central Bank of their country to convert currency. In other words, commercial banks are the "workhorses" of the financial system, because they produce most of the entire cash management and servicing of numerous accounts of their customers.

"Bad" foreign management. His strategy

The joint-stock form of the organization of commercial banks often involves the purchase of a controlling stake by large foreign banking concerns. In our markets, they come because of the high discount rate - the main reference point for "cheap" and "expensive" money. Our money is very expensive. Our commercial banks are a real Klondike of making a profit on loans. For example, commercial bank "A", which has a network of 500 branches across regions, has become the "daughter" of a foreign bank concern. How to consider possible threats to the domestic banking system? Carrying out the sale, it is important to lay down standards for the adequate management of the purchased property complex.

It's bad when greed exceeds talent

A bank is a fragile structure, and it must develop with adequate management. For some reason, the Central Banks started commercial planning on their own accord. This is a very important point. Inadequately planning commercial banks is a threat to the integrity of the banking system. Here, all the tricks are good: for example, the high cost of rent. At the same time, the foreign manager gets everything he needs - short-term profit. But foreign managers do not think about the integrity of our banking system, their area of responsibility coincides with the term of the contract. By the way, this is an international problem.

Do not forget that commercial banks are big employers that provide income for hundreds of thousands of families. But the employees of Bank A branch are unemployed, and the "daughter" is weakening, losing another "workhorse" among its branches. And here in our bank "A", according to the results of the quarter, 20 such branches are being cut. For three years of this work will remain only half of the branches with good profitability. And where is the Central Bank? He's on the sidelines.

Indicators of professional management incompetence

The excessive focus of management on making a profit for its foreign boss should not objectively reduce the attractiveness of the bank's tariffs. The principle of non-depreciation of tariffs can be completely stipulated in the sale of the organization. After all, domestic commercial banks are a structure that should not initially degrade its quality.

The central bank and the state should be interested in the real reason why suddenly the bank's deposits began to resemble current accounts by their interest, and loans became objectively non-competitive. In the state, the scale of personal responsibility of the top management for the deterioration of the quality of banking tariffs should be developed - the basis for its further development and the sign of excessive "squeezing out" of financial resources from the bank, a violation of the harmony of its development. If management led to an objective deterioration of the state of bank "A", it would be logical for the Central Bank to have real levers to correct the situation.

Concluding the article, I would like to note that commercial banks are institutions, daily and steadily working to ensure that the financial system of the state has lived and developed.