Deposit insurance agency and Russias banking system improvement

Development of the banking system recently occurs in the conditions of theworld financial system crisis. This circumstance was reflected in methods of regulation of banking activities and, first of all, in methodsof legal regulation. The taken measures were directed at easing the process of overcoming the crisis, at creation of the mode allowingproviding preservation of solvency and liquidity of commercial banks at a necessary level to maintain the stability of the banking system.In this connection, the governments of many countries activated the works on creation or modernization of mechanisms of nationalbanking systems promoting maintenance and effective protection of interests of bank investors who start to experience difficulties or gobankrupt. When the system of deposit insurance appeared, the cases of mass simultaneous deposits withdrawals in banks because of thefear of banks bankruptcy were rare. However, the situation which has developed in the world during the recession when many bankswere at the edge of bankruptcy showed in all countries that worldwide deposit insurance systems have no accurate internationally recognizedreference points, which would help estimate their efficiency. In the article the author's position consisting in the necessity of definitionof functions and powers concerning the actions of banks-participants, deposit insurance agencies and the Bank of Russia is presentedand given reason at carrying out of reorganisation and financial improvement of banks. The aims set before the deposit insurancesystem define functions and powers of the body controlling the system - the deposit insurer. The system of deposit insurance can dealwith a limited number of simultaneous bank bankruptcies, but cannot independently resolve the system bank crisis. For this purposeactive intervention of supervising and regulating bodies is necessary. The success of the insurer of deposits at settlement of bankruptestablishments with the least costs depends on its powers and the problem nature. Transfer of the turnaround manager function to thedeposit insurance agency is an important constructive element of the deposit insurance system in Russia. That has in turn revealed anumber of problems connected with, first, mutual relations between the agency and the regulation and supervision body - the CentralBank, second, performing the supervising function over the activities of banks, third, timely informing the agency on the financial conditionof banks, regulation of information streams. On the basis of the conducted research, the author has come to a conclusion that atthe given stage to take away the Central Bank's supervision function and to assign it to the deposit insurance agency completely is impossible,since it is the mechanism which has long been settled and it can lead to a collapse in the banking system. Transfer of a part ofthe corresponding powers by the Bank of Russia downwards will definitely not add stability to the banking system. Therefore the deposit insurance agency is gradually becoming the most active and effective participant of the supervision mechanism over the commercialbanks activities.

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