Тексты по специальности «финансы и кредит»

ECONOMY OF THE RUSSIAN FEDERATION

More than a decade after the collapse of the Soviet Union in 1991, Russia is now trying to establish a market economy and achieve more consistent economic growth. Russia saw its comparatively developed centrally-planned economy contract severely for five years, as the executive and legislature dithered over the implementation of reforms and Russia's agro-industrial base faced a serious decline.

After the breakup of the USSR, Russia's first slight recovery, showing the signs of open-market influence, occurred in 1997. That year, however, Asian financial crisis culminated in the August depreciation of the ruble in 1998, a debt default by the government, and a sharp deterioration in living standards for most of the population. Consequently, the year 1998 was marked by recession and intense capital flight.

Nevertheless, the economy started recovering in 1999. Then it entered a phase of rapid economic expansion, the GDP growing by an average of 6.7% annually in 1999-2005 on the back of higher petroleum prices, weaker ruble, and increasing service production and industrial output. The economic development of the country, however, has been extremely uneven: the capital region of Moscow contributes a third to the country's GDP having only a tenth of its population.

The recent recovery, made possible due to high world oil prices, along with a renewed government effort in 2000 and 2001 to advance lagging structural reforms, has raised business and investor confidence over Russia's prospects in its second decade of transition. Russia remains heavily dependent on exports of commodities, particularly oil, natural gas, metals, and timber, which account for about 80% of exports, leaving the country vulnerable to swings in world prices.

The country's GDP shot up to reach €1.2 trillion ($1.5 trillion) in 2004, making it the ninth largest economy in the world and the fifth largest in Europe.

ECONOMY OF THE UNITED KINGDOM

Great Britain is primarily an industrial and commercial nation. Major industries, such as transportation, communications, steel, petroleum, coal, gas, and electricity, which had been nationalized by Labour governments, were sold to private investors by the Conservative government in the 1980s. The country is a world leader in international trade. In January 1973, Great Britain became a member of the European Community (now called the European Union).

The pound sterling, consisting of 100 pence, is the basic unit of currency. In 1968 Great Britain took the first step in a three-year conversion of its currency to the decimal system of coinage by introducing the first two new coins, the 5-new-pence piece (equal to 1 old shilling) and the 10-new-pence piece. The conversion was completed in 1971. The pound was permitted to float against the dollar and other world currencies beginning in June 1972.

The Bank of England, chartered in 1694, was nationalized in 1946 and is the bank of issue in England and Wales. Great Britain has 17 major commercial banks with more than 17,000 domestic and overseas branches, most of which are offices of the four leading banks: Lloyds, Barclays, National Westminster, and Midland. Several banks in Scotland and Northern Ireland may issue currencies in limited amounts. Some banking services are provided by the postal system, savings banks, and cooperative and building societies. Many foreign banks maintain offices in London.

Britain is one of the world's leading trading nations. Its major exports are road vehicles and other transportation equipment, industrial machinery, petroleum and petroleum products, electrical machinery, office machines and data processing equipment, power-generating machinery, organic chemicals, precision instruments, and iron and steel. Most domestic retail trade is conducted through independently owned shops, although the number of department, chain, and cooperative stores and supermarkets is increasing. More than half of all wholesale trade is carried out in London.

ECONOMY OF THE UNITED STATES

The United States has been the world's leading industrial nation since early in the 20th century.

The U.S. economy consists of three main sectors—the primary, secondary, and tertiary. Primary economic activities (4% of GDP) are those directly involving the natural environment, including agriculture, forestry, fishing, and mining. Secondary economic activities (23% of GDP) involve processing or combining materials into new products, and include manufacturing and construction. Tertiary economic activities (73% of GDP) involve the output of services rather than goods. Examples of tertiary activities include wholesale and retail trade, banking, government, and transportation. The tertiary is the most important sector by far.

The basic unit of currency is the US dollar. The U.S. decimal currency consists of coins and paper money, issued by the U.S. Department of the Treasury and the Federal Reserve System. The Federal Reserve issues paper money called Federal Reserve notes, which constitute almost all the paper money in the United States. The Treasury issues US notes, which come in $100 denominations, as well as all coins.

Most domestic commerce, or trade, in the United States is carried on by wholesalers and retailers. Wholesalers buy goods from producers and sell them mainly to retail business firms. Retailers sell goods to the final consumer. Wholesale and retail trade together account for about 16% of GDP of the US and employ about 20% of the labor force.

Foreign, or international, trade enables the United States to specialize in producing those goods it is best suited to make from its available resources. Nonagricultural products usually account for approximately 90% of the yearly value of exports and agricultural products for about 10%. Machinery and transportation equipment make up the leading categories of exports, amounting together to over 40% of the value of all exports. Other leading exports include manufactured goods, such as textiles and iron and steel; processed foods; inedible crude materials, such as cotton, soybeans, and metal ores; chemicals; and mineral fuels and lubricants.

ECONOMY OF CANADA

Until the early 20th century, Canada was primarily an agricultural nation. Since then it has become one of the most highly industrialized countries in the world. To a large extent the manufacturing industries are supplied with raw materials produced by the agricultural, mining, forestry, and fishing sectors of the Canadian economy.

The unit of currency in Canada is the Canadian dollar, which consists of 100 cents. The Bank of Canada has the sole right to issue paper money for circulation. Most foreign-owned and major domestic banks have their head offices in Toronto; a few are based in Montréal. Trust and mortgage loan companies, provincial savings banks, and credit unions also provide banking services. Securities exchanges operate in Toronto, Montréal, Winnipeg, Calgary, and Vancouver.

The per capita foreign trade of Canada ranks among the highest of any nation in the world.

Most of Canada's foreign trade is with the United States, which typically takes about four-fifths of Canada's exports and supplies more than two-thirds of its imports. Components of Canadian exports are increasingly manufactured items; while resource exports such as minerals, timber, and grains are still important, their share of total export volume is decreasing.

The leading products Canada sells abroad include automobiles, trucks, motor-vehicle parts, crude petroleum, lumber, newsprint, wood pulp, wheat, industrial machinery, natural gas, office machines, and aluminum. Principal imports are motor-vehicle parts, automobiles, general purpose and specialized machinery, chemicals, computers, crude petroleum, telecommunications equipment, and fruit and vegetables.

ECONOMY OF AUSTRALIA

Australia has a prosperous, Western-style capitalist economy, with a per capita GDP slightly higher than those of the UK, France and Germany. The Australian economy is dominated by its services sector (68% of GDP), yet it is the agricultural and mining sectors (8% of GDP combined) that account for 65% of its exports.

Rich in natural resources, Australia is a major exporter of agricultural products, particularly grains and wool, and minerals, including various metals, coal, and natural gas. A downturn in world commodity prices can thus have a large impact on the economy.

The government is pushing for increased exports of manufactured goods, but competition in international markets continues to be severe. Australia's comparative advantage in primary products is a reflection of the natural wealth of the Australian Continent and its small domestic market; 20.3 million people occupy a continent the size of the contiguous United States. The relative size of the manufacturing sector has been declining for several decades, and now accounts for just under 12 percent of GDP.

In the beginning of the Second World War till the 1970s, Australia was locked in a period of high maintained economic expansion which is now known as the “long boom”. This period is marked by large increases in the Australian population (by 80%), and little if any economic fluctuations. Despite the huge increases in the Australian population, economic growth, defined by increase in GDP per head, was still growing. It is statistically significant that in this period, the standard of living as representational of increases of GDP per capita, literally doubled. 1974 was the year which is described as the end of the ‘long boom’.

Australia's emphasis on reforms is key factor behind the continuing strength of the economy. In the 1980s, the Australian Labor Party, led by Prime Minister Bob Hawke and Treasurer Paul Keating, commenced the modernization of the Australian economy by floating the Australian dollar in 1983, leading to full financial deregulation.

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FINANCIAL SERVICES OF GREAT BRITAIN

London is the world's largest financial centre, with financial services based around two districts 'The City' (the City of London) and the Docklands (particularly around Canary Wharf). The City houses the London Stock Exchange (shares and bonds), Lloyds of London (insurance), and the Bank of England. The Docklands began development in the 1980s and is now home to the Financial Services Authority, as well as several important financial institutions (such as Barclays Bank and Citigroup). There are now over 500 banks with offices in the City and Docklands, with the majority of business in London being conducted on an international basis, with established leads in areas such as Eurobonds, Foreign exchange markets, and global insurance. The Alternative Investments Market has acted a growth market over the past decade, allowing London to also expand as an international equity centre for smaller firms.

Edinburgh also has a long established financial industry, with a large number of domestic firms (Royal Bank of Scotland, Bank of Scotland) and international firms (often using it as a cost competitive location). The Scottish Stock Exchange is part of the London Stock Exchange, but maintains a distinct culture.

Tourism. Tourism is the 6th largest industry in the UK, contributing 76 billion pounds to the economy. It employs 1,800,000 full-time equivalent people — 6.1% of the working population (2002 figures) [1].

Gambling. Gambling in the UK in all its forms currently makes up only a small part of the economy. Gambling forms which are taxed include casinos and the National Lottery, as well bookmakers.

Currency. The relatively good economic performance has complicated the Blair government's efforts to make a case for Britain to leave the Pound Sterling and join the Euro. The British Prime Minister has pledged to hold a public referendum if membership meets Chancellor of the Exchequer Gordon Brown's "five economic tests". The tests are:

1. Are business cycles and economic structures compatible with European interest rates on a permanent basis?

2. If problems emerge, is there sufficient flexibility to deal with them?

3. What impact would entry into the Euro have on the UK's financial services industry?

4. Would joining the Euro create better conditions for firms making long-term decisions to invest in Britain?

5. Would joining the Euro promote higher growth, stability and a lasting increase in jobs?

When assessing the tests, Gordon Brown concluded that while the decision was close, the United Kingdom should not yet join the Euro. In particular, he cited fluctuations in house prices as a barrier to immediate entry. The tests will be reassessed in the future. Public opinion polls show that a majority of Britons are opposed to joining the single currency at this time.

Exchange rates. (average for whole of each year), in USD (US Dollar) and EUR (Euro) per GBP; and inversely: GBP per USD and EUR. ( Synthetic Euro XEU before 1999). These averages conceal wide intra-year spreads. Note the effect of Black Wednesday in late 1992 by comparing the averages for 1992 with the averages for 1993.

Property Market. The UK Property market has been booming for the past seven years and in some areas property has trebled in value over that period. The increase in property prices has a number of causes - greater growth, a well managed economy, low interest rates, large number of immigrants from eastern europe and the growth in property investment and specifically buy-to-let.

The UK property market peaked in July 2004 and has been static or falling in the capital and some other areas but still rising in others. This has led many to start worrying about the possibility of a house price crash as many feel that they are at the end of a major British property bubble.

A house price crash would be very damaging at the present time due to debt at record levels. Increasing numbers of bankruptcies and home repossessions are worrying many economists, who think that a correction in house prices would lead the country into a lengthy recession.

Taxation and borrowing. These data show the Tax Burden (personal and corporate) and National Debt as a percentage of GDP. Samples are taken at 10 year intervals (snapshots, but the rolling averages are very close)

THE BANK OF THE UNITED STATES

The central bank chartered in 1791 by the U.S. Congress at the urging of and over the objections of Thomas Jefferson. Extended debate over its constitutionality contributed significantly to the evolution of pro- and anti-bank factions into the first American political parties--respectively, the Federalists and the Democratic-Republicans. Antagonism over the bank issue grew so heated that its charter could not be renewed in 1811. Reconstituted in 1816, the Bank of the United States continued to stir controversy and partisanship, with Henry Clay and the Whigs ardently supporting it and the Democrats ardently opposing it.

The first Bank of the United States was a cornerstone of Hamilton's fiscal policy; it was a means to fund the public debt left from the Revolution, to facilitate the issuance of a stable national currency, and to provide a convenient means of exchange for all the people of the United States. It was capitalized at $10,000,000 and fully subscribed almost instantly, with the federal government holding the largest block of ownership, 20 percent. A substantial interest in the bank was also purchased by Europeans.

The bank accomplished all Hamilton had hoped for and also succeeded in an unforeseen role: the regulation of private banks chartered by the several states. At this time the issuance of notes was a more conspicuous feature of banking than were deposits. Bank notes entered circulation as the money banks lent to their borrowers, and these notes comprised most of the total currency in circulation.

The rapid growth of the young country generated powerful demand for loans and tended to stimulate the overextension of credit. It was in the general interest to restrain such overexpansion, and the bank imposed that restraint automatically. As the depository of the government, with offices in the chief seaports and commercial centres, it constantly received from collectors of revenue the notes of private banks by which monies due the government were paid. As fast as it received such notes it called for their redemption in gold and silver by the banks of issue, thus automatically restricting the overextension of credit and protecting the economy from inflation. Conversely, in periods of panic and deflation, the bank could ease the pressure. It was engaged precisely in what came later to be called central banking.

Despite its successes, the bank met political opposition that gathered force with partisan changes taking place in the country. In good part, this opposition was based on the very restraints the bank imposed on private, state-chartered banks; this was also seen as an affront to states' rights, and the bank's federal charter was called unconstitutional. In 1811, when the 20-year charter expired, renewal was politically impossible. Its officers acknowledged reality and successfully sought a state charter in New York.

Within a few years, however, economic developments, chaotic conditions among the state banks, and changes in the composition of Congress combined to enable the chartering of a new Bank of the United States with wider powers than before and with closer links to the government. There was some early mismanagement, but in 1823 of Philadelphia became its president and the bank began to flourish.

Under Biddle, the central banking responsibilities were recognized and developed as consciously as those of the Bank of England at the same time--perhaps more so. But since these responsibilities usually had to be exercised as restraints, private banks resented them and complained of oppression.

The rapid development of American industry and transportation was enhancing the richness of the country's resources, and the idea of democracy was beginning to connote to entrepreneurs the idea of free enterprise and laissez-faire. Hence, the very conditions that made credit restraint advisable also made it objectionable. Meanwhile, a developing agrarian populism, especially in the South and West, and among the poor everywhere, was seeing in democracy opposition to privilege and aristocracy and wealth. The bank became known as "the monster," and the enemy of the common people. These incongruous strains against the bank united under the leadership of Andrew Jackson, who became president in 1829. His attacks on it were sustained and colourful and rallied wide support. Attacks on the bank's constitutionality continued, although a decade earlier the Supreme Court, in McCulloch v. Maryland, had found the charter constitutional under the doctrine of implied powers, leader of the Whigs in the Senate from 1831, championed the bank against the Jacksonian Democrats and in 1832 deliberately injected the bank question into the presidential campaign by bringing about the renewal, four years early, of the bank's charter, adopted by Congress on July 3. Jackson promptly vetoed the bank renewal act as unconstitutional, disdaining the Supreme Court decision and asserting that officeholders were bound by their oaths to uphold the constitution as they, not others, understood it. In a demagogic veto message he depicted the bank as the "prostration of our Government to the advancement of the few at the expense of the many."

The bank issue dominated the campaign of 1832, in which Jackson decisively defeated Clay. The veto stood, but the bank's charter still had four years to run, so Jackson determined to scuttle it ahead of time by withdrawing government funds from it. He shuffled his cabinet twice before finding in Roger B. Taney--who as attorney general had declared the move legal--a treasury secretary willing to withdraw U.S. deposits from the Bank of the United States and place them in various state-chartered private institutions, which quickly became known as "pet banks."

The Bank carried on as best it could until the expiry of its charter in 1836, when it sought and won a state charter as the Bank of the United States of Pennsylvania. The long and rancorous affair became known as the, and Jackson's victory in it precluded for almost 80 years--until the creation in 1913 of the Federal Reserve System--any effective regulation of private banks in the United States.

FEDERAL RESERVE SYSTEM

The central banking authority of the United States. It acts as a fiscal agent for the U.S. government, is custodian of the reserve accounts of commercial banks, makes loans to commercial banks, and is authorized to issue Federal Reserve notes that constitute the entire supply of paper currency of the country. Created by the of 1913, the system consists of the Board of Governors of the Federal Reserve System, the 12 Federal Reserve banks, the, the Federal Advisory Council, and, since 1976, a Consumer Advisory Council; there are several thousand member banks.

The Board of Governors of the Federal Reserve System determines the reserve requirements of the member banks within statutory limits, reviews and determines the discount rates established by the 12 Federal Reserve banks, and reviews the budgets of the reserve banks. A Federal Reserve bank is a privately owned corporation established pursuant to the Federal Reserve Act to serve the public interest; it is governed by a board of nine directors, six of whom are elected by the member banks and three of whom are appointed by the Board of Governors of the Federal Reserve System. The Federal Reserve banks are located in Boston, New York, Philadelphia, Chicago, and San Francisco, and also in Cleveland, Ohio; Richmond, Va.; Atlanta, Ga.; St. Louis, Mo.; Minneapolis, Minn.; Kansas City, Mo.; and Dallas, Texas. The Federal Open Market Committee, consisting of the seven members of the Board of Governors and five members elected by the Federal Reserve banks, is responsible for the determination of Federal Reserve bank policy in the purchase and sale of securities on the open market. The Federal Advisory Council, whose role is purely advisory, consists of 12 members, one of whom is elected by the board of directors of each of the Federal Reserve districts. All national banks are required to be members of the Federal Reserve System, and state banks may become members if they meet membership qualifications.

The Federal Reserve System exercises its regulatory powers in several ways, the most important of which may be classified as instruments of direct or indirect control. One form of direct control can be exercised by adjusting the legal reserve ratio--i.e., the proportion of its deposits that a member bank must hold in its reserve account--thus increasing or reducing the amount of new loans that the commercial banks can make. Because loans give rise to new deposits, the potential is, in this way, expanded or reduced. This policy tool has not been used very frequently in recent years.

The money supply may also be influenced through manipulation of the (also called rediscount) rate, which is the rate of interest charged by Federal Reserve banks on short-term secured loans to member banks. Since these loans are typically sought to maintain reserves at their required level, an increase in the cost of such loans has an effect similar to that of increasing the reserve requirement.

The classic method of indirect control is through, first widely used in the 1920s and now employed daily to make small adjustments in the market. Federal Reserve bank sales or purchases of securities on the open market tend to reduce or increase the size of commercial-bank reserves; e.g., when the Federal Reserve sells securities, the purchasers pay for them with checks drawn on their deposits, thereby reducing the reserves of the banks on which the checks are drawn.

The three instruments of control described here have been conceded to be more effective in preventing inflation in times of high economic activity than in bringing about revival from a period of depression. A supplemental control occasionally used by the Federal Reserve Board is that of changing the margin requirements involved in the purchase of securities.

THE BANK OF RUSSIA

The tasks and functions of the Bank of Russia are set by the Constitution of the Russian Federation and Federal Law on the Central Bank of the Russian Federation (Bank of Russia). The Bank of Russia’s main objective is to protect the rouble and ensure its stability. The Bank of Russia is also the sole issuing centre and the body of banking regulation and supervision. Its main functions are formulated in Article 4 of the Federal Law on the Central Bank:

- in collaboration with the government of the Russian Federation, it elaborates and implements a uniform national monetary policy designed to protect the rouble and ensure its stability;

- it is the only issuer of cash and the organiser of its circulation;

- it is the creditor of last resort for credit organisations and organises the refinancing system;

- it sets the settlement rules of the Russian Federation;

- it sets the rules of conducting banking operations and accounting and the reporting rules for the banking system;

- it conducts state registration of credit organisations and issues and revokes the licences of credit organisations and the organisations that audit them;

- it supervises the activities of credit organisations;

- it registers the issue of securities by credit organisations in accordance with federal laws;

- it conducts, on its own behalf or on behalf of the government of the Russian Federation, all kinds of banking operations necessary for the Central Bank’s implementation of its main duties;

- it conducts foreign exchange regulation, including operations to buy and sell foreign exchange, and establishes the procedure for effecting settlements with foreign countries;

- it organises and exercises foreign exchange control on its own and through authorised banks in accordance with the laws of the Russian Federation;

- it participates in making Russian Federation balance of payments forecasts and organises the drafting of the Russian Federation’s balance of payments;

- it analyses and forecasts the state of the Russian Federation’s economy as a whole and by region, concerning specifically monetary, credit, foreign exchange, financial and price relations, publishes the corresponding materials and statistical data and performs other functions in accordance with federal laws.

The Bank of Russia co-ordinates and regulates settlement relations in Russia and establishes the rules, forms, deadlines and standards for non-cash settlements obligatory for all legal entities and natural persons. The forms of non-cash settlements are determined by the Civil Code of the Russian Federation.

The principal forms of non-cash settlements today are payment orders and, to a lesser extent, payment requests (for collection). Letters of credit and cheques are used on a small scale.

A part of settlements is effected by legal entities and private individuals using payment cards, which are gaining ever wider acceptance.

The Bank of Russia is making efforts to ensure the effective and uninterrupted functioning of the settlements system and enhance its reliability.

Non-cash settlements are effectuated through correspondent accounts opened with the Bank of Russia, correspondent accounts opened by credit institutions with one another, correspondent accounts opened with non-bank settlement credit institutions and through the system ofintrabank settlements, using inter-branch settlement accounts.

Russian legislation accords the Bank of Russia a special place in the country's payments system. The Bank of Russia not only ensures general guidance of the payments system and provides the methodology and organisation of settlements, but also directly participates in this system, effecting interbank settlements through its divisions.

The payments made through the Bank of Russia settlement network account for a large part of the payments turnover.

Every participant in the settlements effected through the Bank of Russia settlement network is awarded an identification code. The Bank of Russia keeps the Russian Federation Bank Identification Code Directory (BIC Directory), which contains the following data: the name of each credit institution participating in settlements and its bank identification code, correspondent account with the Bank of Russia and domicile.

The BIC Directory is regularly reviewed and updated.

The credit institutions located in the Russian Federation (resident credit institutions) and having the banking licence of the Central Bank of the Russian Federation open only one correspondent account with one of the Bank of Russia institutions (a cash settlement centre or operations department), which services them. The branches of credit institutions may have correspondent subaccounts to implement settlements and may not have such accounts. If they don't, they effect settlements through the correspondent account of their parent organisation or the subaccount of another branch.

Overall, the Russian payments system comprises about 1,400 resident credit institutions, more than 4,000 branches of credit institutions and nearly 1,200 subdivisions of the settlement system and it is the principal means of implementing the official monetary policy by the Bank of Russia.

Non-cash settlements of clients of credit institutions and their branches are effected from the bank accounts opened with these institutions. In special cases, stipulated by the law, legal entities may have accounts opened with Bank of Russia institutions.

Credit institutions and their branches with correspondent accounts and subaccounts with the Bank of Russia effect settlements for their clients for commodities, works and services and make tax and other compulsory payments and their own income payments to the budget and payments to the accounts of state extrabudgetary funds through the various divisions of the Bank of Russia settlement network.

As for the settlements between clients of one credit institution (branch), they are effected by writing off or entering funds to the clients' corresponding accounts, bypassing the correspondent account of the credit institution (or its branch's subaccount) opened with a Bank of Russia institution.

Settlements between the cash settlement centres of the regional divisions of the Bank of Russia, serviced by a single computer centre, on transactions of credit institutions (or their branches) and on their own transactions are effected through the accounts opened specially for this purpose.

The correctness of settlements effected by the cash settlement centres is confirmed by the concurrence of the initial and reply turnovers in the process of confirmation, that is by comparing each reply entry with the initial one.

Payments are effected if there are funds in the correspondent accounts of credit institutions or subaccounts of their branches and within the amount of these funds. If a credit institution (or its branch) has not enough funds to meet all claims made on it, funds are written down from its correspondent account or from the subaccount of its branch to effect payments for its clients and its own payments in the order established by the Civil Code of the Russian Federation. In this case, documents are put into the file of unpaid settlement documents, attached to the correspondent account of the credit institution or the subaccount of its branch.

Settlements effected through the Bank of Russia settlement network are based not only on paper, but also electronic payment documents. These are the so-called intra- and interregional electronic settlements. The latter are regulated by the Provisions on Inter-Regional Electronic Settlements Effected through the Bank of Russia Settlement Network. The exchange of electronic documents through the Bank of Russia settlement network is regulated by the Provision on the Rules of Exchange of Electronic Documents between the Bank of Russia, Credit Institutions (Branches) and Other Clients of the Bank of Russia in Effecting Settlements through the Bank of Russia Settlement Network, adopted in March 1998.

The divisions of the Bank of Russia settlement network participate in electronic settlements as the bodies registering and supervising payments.

Credit institutions, their branches and other clients of the Bank of Russia that have correspondent or other accounts with the divisions of the Bank of Russia settlement network may use electronic settlements. This helps accelerate money turnover and reduce the amount of funds in settlements.

The term "electronic payment document" (EPD) is used in effecting electronic settlements in the Bank of Russia settlement network. The EPD is a document that serves as a legal basis for conducting operations with the accounts of credit institutions (branches) and other clients of the Bank of Russia, opened with a Bank of Russia institution, bearing an electronic digital signature and having equal legal force, stipulated in an agreement with the Bank of Russia, with paper based payment documents signed by the authorised persons with their own hand and stamped.

At present the electronic payment documents presented for execution to a Bank of Russia institution must contain the requisites in accordance with which operations with accounts are conducted. Two kinds of EPD may be exchanged:

—full-format EPD containing all requisites of a payment document, including textual requisites;

-abndged-format EPD containing the requisites necessary for conducting operations with accounts in a Bank of Russia institution.

The transfer of funds using fall-format EPD does not require accompanying payment documents on paper, while the transfer of funds using abndged-format EPD must be accompanied by an exchange of paper based payment documents, filled out in accordance with the established procedure.

During 1999 the Bank of Russia plans to phase in a paperless technology in its settlement system, using full-format electronic payment documents only in the exchange of electronic documents between Bank of Russia institutions and between the Bank of Russia and credit institutions.

After January 1,1998, the Bank of Russia charges a fee for its settlement services. Some kinds of settlement operations are conducted by the Bank of Russia free of charge.

Interbank settlements effected through correspondent accounts opened by credit institutions with one another play a part in the general payment turnover.

The rules of settlement operations with correspondent accounts of credit institutions opened with other credit institutions are formulated in the Bank of Russia Provisions on Effecting Non-Cash Settlements by Credit Institutions in the Russian Federation, which came into effect in 1998.

The operations conducted with correspondent accounts of correspondent banks are divided into two types: operations to service clients and own interbank operations.

The development of correspondent relations depends on various factors, such as mutual payment flows, price and demand in the credit market, the possibility of participating in trading in the regional government securities markets and on currency exchanges and the risk levels.

Specifically, settlements in correspondent relations are effected with credit institutions in CIS and other countries.

Settlements through clearing institutions are one of the means of interbank settlements.

The development of clearing settlements depends on the financial condition of credit institutions and the state of the money markets. Eight settlement credit institutions have been granted permanent licence as clearing houses.

Clearing operations are based on a clearing model requiring the participating banks to make preliminary deposits in their accounts with the clearing institution.

Nearly 2,000 credit institutions and their branches and other corporate clients effect settlements through non-bank clearing institutions.

The Bank of Russia has a decisive role to play in elaborating the principles of organising clearing operations and monitoring compliance with these principles.

Intrabank settlements are gaining acceptance. They include settlements between a head office of a credit institution and its branches and between branches of a credit institution. The procedure for conducting settlement operations with inter-branch settlement accounts in Russia is established by the Bank of Russia Provisions on Conducting Non-Cash Settlements by Credit Institutions in the Russian Federation.

A mid-term strategy for the development of Russia's payments system was elaborated in 1996. It sets forth as the main objectives of the reform of the system further modernising settlements, upgrading banking technologies, introducing new instruments of payment, raising the standard of services provided to credit institutions and other organisations and creating conditions for liquidity management.

To raise the banking technology of implementing settlements onto a qualitatively new level, new methods are being developed, new rules and regulations are being enforced, new technologies are being introduced and new organisational principles are being established. Efforts are also being made to accelerate the introduction of electronic documents and build an advanced automated real-time system of settlements.

To this end, steps are being taken to determine the status and functions of individual subsystems for the implementation of settlements, enable credit institutions to manage their liquidity more accurately, develop and introduce formats of electronic documents and settlement documents on paper, stimulate the functioning of clearing institutions, improve conditions for the introduction of bank payment cards in order to reduce the amount of cash in circulation, and elaborate regulatory rules in these areas.

The Bank of Russia division responsible for ensuring methodologically and organisationally the efficient and uninterrupted functioning of the national payments system is the Methodology and Organisation of Settlements Department.

In accordance with its Statute, the Department ensures the implementation of the main tasks involved in developing and upgrading the methods of non-cash payments in the Russian Federation, elaborating a concept of development of the Bank of Russia payments system and organising supervision of the Bank of Russia settlement divisions and other settlement systems.

THE BANK OF ENGLAND

The Bank of England was incorporated by act of Parliament in 1694 with the immediate purpose of raising funds to allow the English government to wage war against France in the Low Countries (see). A royal allowed the bank to operate as a joint-stock bank with limited liability. No other joint-stock banks were permitted in England and Wales until 1826. This special status and its position as the government's banker gave the bank considerable competitive advantages.

The bank was located first in Mercers' Hall and then in Grocers' Hall, but it was moved to its permanent location on Threadneedle Street in the 1730s. By that time it had become the largest and most prestigious financial institution in England, and its bank notes were widely circulated. As a result, it became banker to other banks, which, by maintaining balances with the Bank of England, could settle debts among themselves. The bank was threatened by the economic instability that accompanied the, but its standing was also considerably enhanced by its actions in raising funds for Britain's involvement in those conflicts.

During the 19th century the bank gradually assumed the responsibilities of a central bank. In 1833 it began to print legal tender, and it undertook the roles of lender of last resort and guardian of the nation's gold reserves in the following few decades.

The bank was privately owned until 1946, when it was nationalized. It funds public borrowing, issues bank notes, and manages the country's gold and foreign exchange reserves. It is an important adviser to the government on monetary policy and is largely responsible for implementing the chosen policy by its dealings in the money, bond, and foreign exchange markets. The bank's freedom of action in this regard was considerably enhanced when it was given the power to determine short-term interest rates in 1997