Banking systems are an integral part of various economic models. Moreover, between them there may be significant differences.
Banking system
Before proceeding to the study of what types of banking systems of the world are, it is worth understanding the definition itself. This terminology is used to describe the totality of non-bank credit organizations and the banks themselves, which operate within the framework of a single legal and financial-credit mechanism.
This system includes both the national bank and private entities, including various credit and settlement centers. The key function of the national bank is reduced to the implementation of the state currency and issue policy. It is the center of the country's reserve system.
The banking system may be related to those specialized companies that support the activities of credit institutions.
System components
In the framework of the topic “Banking system - concept, types, levels, elements” it is worth considering the institutional components that form the system.
You can start with credit organizations. This is a legal entity whose main purpose is to make a profit through banking operations. To carry out such activities, a license is required, which is issued by the central bank. Moreover, all operations of such organizations are carried out in strict accordance with national legislation.
If we talk about Russia, then the laws of the Russian Federation allow you to open credit organizations using any form of ownership. It is also possible the formation of various associations and unions focused on protecting the interests of their members, while leaving aside the tasks associated with profit.
Understanding what the banking system is, its elements and types, it is worth identifying the following institutional component, which is its component. It's about a bank. This term should be 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 funds of various persons in deposits;
- placement of these funds at their own expense and on their own behalf on the terms of urgency, payment and repayment.
It is important to understand the following fact: if an organization does not even have one of the operations listed above, it is considered a non-banking structure.
Foreign bank. This term is used in some countries to define a credit institution, which 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 distinguishing feature, it is possible to determine the possibility of individual banking operations, which are provided for by national legislation.
Market model
The types of banking system include various forms of its organization. One of the common types is market. This system has the following characteristic features: the state is not a monopolist in the field of banking and its impact on various credit structures is limited to the establishment of basic parameters and principles of development.
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 results of the activities of the above-mentioned organizations, and private credit institutions, in turn, are not responsible for operations carried out 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, lead to the need to form a central bank or organization that will perform its functions. One of the main tasks of such a bank is to monitor other structures that take part in credit relations.
The following fact deserves attention: the status of a central bank is so special that it is distinguished as a separate banking type of financial system or, more precisely, the level. It is for this reason that market systems are in fact always always multi-level.
Accounting Distribution Model
This type of banking organization is used mainly in those countries where the democratic system is unpopular.
Such a system is characterized by a state monopoly on the establishment of banking institutions and 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 result, with this model, the range of credit organizations is rather narrow. This means that the provision of banking services is carried out either by a small number of credit organizations that specialize in industry, or by a single state bank.
System levels
Considering the types of construction of the banking system, it is necessary to take into account the fact that some of them are based on the principle of determining the order of relations that are formed between various credit organizations.
We are talking about multi-level and single-level banking systems.
The single-level model is used mainly in countries with a totalitarian system, where one state bank operates . Such a model is also relevant at the initial stage of development of the banking system.
As for the multi-level system, it is characterized by the differentiation of credit organizations by levels. Moreover, the central bank is always in first place, regardless of the number of allocated levels and credit organizations in general.
The system operating in Russia
If we pay attention to the types of the banking system of the Russian Federation, we can conclude that in the CIS there is a multilevel model. Moreover, this system has the following structure: Bank of Russia, various credit organizations, as well as representative offices and branches of foreign banks.
But this is not limited to the Russian banking system. The types that it includes imply the action on the territory of the state of specialized organizations that do not carry out banking operations. Moreover, such organizations are focused on supporting the activities of credit institutions and banks.
Given that the modern banking system of Russia is a system of type corresponding to the market model, the line of credit activity that operates 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 within which the banking system was implemented. Their types are markedly different depending on the region.
The American model is characterized by the parallel effect of the federal reserve system, as well as investment, savings, commercial banks and judicial savings associations.
The Japanese banking system looks a little different. The 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, thanks to which the banking system can be organized, types that involve several levels make sense to define as more progressive.