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The effectiveness of monetary policy, from the Keynesian point of view, is greatest when the money demand curve is relatively steep and the investment demand curve is relatively flat, since the point of their intersection determines the level of national income.
The steeper the money demand curve, the greater will be the impact of any given change in the money supply on the equilibrium rate of interest. Further, each given change in the interest rate will have the stronger effect on the volume of investment (and hence on the equilibrium NNP), the more flattened the demand curve for investment.
In theory, there is considerable disagreement about the exact shape of these curves, and therefore about the effectiveness of monetary policy.
Monetary policy has a very direct impact on such important macroeconomic indicators as GNP, employment and price levels. Depending on the economic situation, the Central Bank pursues a policy of cheap or expensive money.
Cheap money policy - the policy of increasing the supply of money in circulation by lowering the interest rate, which increases the investment component of total spending and the equilibrium level of net national product. The equilibrium net national product is the product at which the total volume of finished goods and services produced is equal to the total volume of finished goods and services purchased (volume, total expenditure).
The cheap money policy makes credit easy and affordable and is used when a given level of net national product is accompanied by significant unemployment and underutilization of productive capacity.
Dear money policy - the policy of reducing or limiting the growth of the money supply in the country by increasing the interest rate, which reduces the investment component of total spending and limits demand-pull inflation. The Central Bank resorts to it in conditions of demand inflation. This policy reduces the availability of credit and increases its costs.
A comparison of these two mechanisms is shown below:
Cheap money policy Dear money policy Problem: Unemployment and recession Problem: Inflation Central bank buys bonds Central bank sells bonds lowers the reserve ratio increases the reserve ratio lowers the discount rate increases the discount rate Money supply Money supply
increases decreases
Interest rate falls Interest rate rises Investment costs Increase Investment costs decrease
Real NNP increases by Inflation decreases by a multiple of the increase in investment
There is an inverse relationship between these two mechanisms. The growth in NNP caused by the cheap money policy, in turn, increases the demand for money, partially slowing down and blunting the efforts of the cheap money policy to lower interest rates. Conversely, a dear money policy lowers NNP. It is not this, in turn, that reduces the demand for money and weakens the original result of the policy of dear money, which was to raise interest. This feedback forms the core of the political dilemma of goals - the impossibility of simultaneously controlling both the money supply and the interest rate by means of monetary policy.
Thus, one should distinguish between short-term and long-term effects of monetary policy on the national economy. If in the short term the Central Bank, pursuing a policy of cheap money, stimulated the growth of NNP, then in the long term the effect of injections into the national economy is noticeably reduced.
On the issue of the consequences of monetary policy, the positions of neo-Keynesians and monetarists differ. Neo-Keynesians proceed from the premise that wages and prices are inflexible instruments, relatively stagnant, and NNP growth in the short term can be achieved by increasing the money supply; in the long run, such a policy will only lead to inflation. Monetarists, on the other hand, rely on the position that prices and wages are flexible instruments and believe that the policy of control over the money supply, both in the short and long term, can only affect the rate of inflation.
More on the topic 5.4. Macroeconomic Implications of Monetary Policy Monetary Policy Effectiveness:
- How do macroeconomic conditions affect investment policy?
- Macroeconomic stabilization and monetary#x2011;credit policy in the Keynesian model
- Annex 1.2. Formation of post-crisis monetary policy in terms of managing liquidity, inflationary processes, exchange rate and interest rate policy Basis for post-crisis monetary policy
US Federal Reserve
The organizational structure of the monetary authorities of the United States, their powers and methods of activity are based on extensive and ramified legislation, which reflects the historical features of the formation and development of the economy and the monetary sphere of the country. The control and regulatory activities of these bodies largely overlap and overlap, and this is one of the important features of the organization of monetary regulation in the United States.
In the United States, banks are divided into national banks operating on the basis of a license (charter) of the federal government, and state banks operating on the basis of a license (charter) of the state government. This feature leads to a double interpretation of the principle of a two-level construction of banking systems, adopted in most countries. Typically, the term "two-tier system" means that the first level is occupied by the Central Bank as the regulator of the monetary system, and the second level is occupied by all other lending institutions: commercial, savings, mortgage banks, etc. In the United States, the two-tier system includes the Federal Reserve System (FRS), national and state banks. The US financial and credit system has another feature. The Fed is not only the central bank, but also a professional association of the country's banks. All national banks are necessarily members of the FRS, which gives them some benefits and imposes obligations to comply with certain requirements of the FRS. State banks can be members of the Fed on a voluntary basis. But in any case, they are obliged to follow the instructions of the Fed. Accordingly, national banks form one level of the US banking system, and state banks form the second. Regulatory regulation is designed to perform the following tasks:
Ø ensuring the reliability and efficiency of the implementation of the monetary system of its economic tasks;
Ø ensuring the stability of the credit system and preventing the bankruptcy of commercial banks and other credit institutions;
Ø limiting the concentration of capital in the ownership of a few credit institutions, preventing the establishment of monopoly control of these banks over the money market.
The Federal Reserve System consists of three levels: the Board of Governors, 12 Federal Reserve Banks, about 6,000 banks - members of the Fed. In addition, the Fed has two committees: the Federal Open Market Committee and the Federal Advisory Council.
The center of the Federal Reserve System is the Board of Governors in Washington, DC. The main function of the Council is the formation of monetary policy. The Council consists of seven permanent members appointed by the President of the United States with the approval of the Senate for a term of 14 years. If members of the Council have completed their terms of office (except in the event of death or resignation), the president has the right to appoint only two new members of the Council during a four-year term in office. However, resignations of members of the Board of Governors are commonplace.
The Board of Governors ensures equal representation from Fed districts. The members of the Council have at their disposal a significant staff of employees: economists, lawyers, inspectors, administrators.
The Board has the exclusive right to set the level of required reserves of depository institutions, and also shares responsibility with the Federal Reserve Banks for conducting open market operations and determining the most appropriate bank discount rates.
The Federal Reserve Banks are the bearer of the directives of the Board of Governors and play an important role in the implementation of US monetary policy. They report weekly to the Council, which summarizes and processes incoming information and publishes a report at the end of each week. The most significant and influential reserve bank is the Federal Reserve Bank of New York. Branches of reserve banks operate in 25 cities. Each Federal Reserve Bank has its own board of nine non-employee directors. By law, three Class A directors representing Fed member banks and three Class B directors representing the public are elected in each region by Fed member banks. The Board of Governors appoints three Class C Directors who also represent the public. The Fed's Board of Governors also selects and appoints a Chairman of the Board of Directors and his Deputy from among the Class C Directors. The Reserve Bank Directors exercise control over the operations of their bank (under the patronage of the Board of Governors). Each of the regional banks also has a general auditor (chief inspector) who reports not to the bank, but to the Board of Governors.
The Federal Reserve Banks profit primarily from interest related to the Fed's share of securities holdings and, to a lesser extent, from interest income on the Fed's holdings of currency, interest on loans to depository institutions, and foreign exchange controls.
To join the Fed, each bank is required to purchase from the Federal Reserve Bank of its district a certain number of shares in an amount equal to 3% of its own share capital and retained earnings. At the request of the Fed, this amount can be doubled. As share capital and profits grow, the commercial bank is required to purchase shares in order to maintain the regulated 3% rate. In the 1970s there was a reduction in the members of the Fed due to unprofitability. In 10 years, more than 500 banks have left the Fed. The situation changed in 1980 after Congress passed the law on the deregulation of depository institutions and monetary control, in accordance with which the reserve requirements of the Fed were extended to all depository institutions in the country. The law contributed to a significant strengthening of the role of the Fed in the US credit system.
The Federal Reserve Banks accept deposits from banks and savings institutions and make loans to them, thus acting as a lender of last resort. In addition, Congress authorized the Federal Reserve Banks to issue cash, which forms the supply of credit money in the nation's economy.
Responsibility for the impact of the cost and adequacy of cash and credit on the process of selling and buying government securities rests with the Federal Open Market Committee (FOM). Formally, the FKOR was organized in 1935, although the Federal Reserve Banks created a body that coordinated operations on the open securities market as early as the early 1920s.
The Federal Open Market Committee consists of 12 permanent members:
Ø 7 members of the Board of Governors of the FRS;
Ø 5 Presidents of the Federal Reserve Banks (elected on a rotational basis, the President of the New York Bank is a permanent member of the FCOR). All 12 Reserve Bank presidents are required to attend committee meetings.
FCOR meets eight to nine times a year. At each meeting, a strategy for operations on the open securities market is developed, which is brought to the attention of the Fed governor. The Committee develops and forecasts economic and financial decisions. Committee decisions are implemented by the Foreign Trade Division of the New York Regional Bank.
According to the law on the Fed, in the US banking system there is a coordinating advisory body to link the entire banking sector with the FRS - the Federal Advisory Council. It consists of 12 members delegated by the Fed's regional banks. Four times a year, the board meets in joint session with the governors of the Federal Reserve System to exchange views on a wide range of issues of financial and credit relations. Members of the Federal Advisory Council inform the reserve banks of their districts about the meeting.
Currently, the Federal Reserve System performs the following functions:
Ш manages national monetary policy by influencing monetary and credit circulation in order to achieve full employment and stable prices;
Ш supervises banking institutions and regulates their activities to ensure the safety and soundness of the banking and financial systems;
Ø maintains the stability of the financial system and reduces risk in financial markets;
Ш provides financial services to the US government, the public, financial institutions, and also plays an important role in the management of the national settlement system.
Suppose the economy is going through a period of recession and unemployment. The governing monetary authorities decide that in order to stimulate aggregate demand, which could absorb free resources, it is necessary to increase the money supply. To do this, the Board of Governors of the Fed must take care of the growth of excess reserves of commercial banks. What concrete policy measures will achieve this goal?
1. Purchase of securities. The Board of Governors should instruct the Federal Reserve Banks to buy securities on the open market. This purchase of bonds will be paid for by an increase in the reserves of commercial banks.
2. Reduction of the reserve norm. The reserve ratio should be reduced, as a result of which the required reserves are automatically converted into excess ones and the value of the money multiplier increases.
3. Reducing the discount rate. The discount rate should also be reduced in order to encourage commercial banks to expand their reserves by borrowing from the Federal Reserve Banks.
Such a set of political decisions is called the policy of "cheap" money. Its task is to make credit cheaper and easier to access in order to increase aggregate demand and employment.
Suppose now that excessive spending is pushing the economy into an inflationary spiral. The Board of Governors should try to reduce aggregate demand by limiting the money supply. The key to solving this problem is to reduce the reserves of commercial banks. How it's done?
1. Sale of securities. The Federal Reserve Banks must sell government bonds on the open market in order to cut the reserves of commercial banks.
2. Increasing the reserve norm. An increase in the reserve ratio automatically deprives commercial banks of excess reserves and reduces the value of the money multiplier.
3. Raising the discount rate. An increase in the discount rate reduces the interest of commercial banks in building up their reserves by borrowing from the Federal Reserve Banks.
This set of measures, accordingly, was called the “dear” money policy. Its purpose is to limit the money supply in order to cut spending and curb inflation.
Monetary regulation was formed in the United States as a result of a long period of historical development and is currently one of the most important components of the US state economic policy. The activity of the system of monetary regulation is aimed at fulfilling the tasks of a regulatory and economic nature, which, in combination, should ensure the sustainable growth of the country's economy through the reliable and efficient operation of credit institutions. Regulatory and economic methods of regulation complement each other, since the use of regulatory methods is aimed at achieving a certain economic effect, and economic methods are based on the use of certain powers, and thus the achievement of the set goals is ensured. Thus, the main body of the US monetary sphere is the Federal Reserve System (FRS), which is built and functions both as a central bank and as the supreme body of the association of national and state banks. In order to ensure a stable state of the monetary sphere, the Fed uses the following monetary policy tools: changing the required reserve ratio, changing the discount rate and open market operations. It should be noted that the highly organized and effective system of monetary regulation that has developed and operates in the United States provides the necessary control over the activities of many credit institutions in the country, and this has a strong impact on the economic development of the United States.
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Introduction
1. Development of the monetary system and its role in the economy
2. Development of the monetary system on the example of the USA
3. Features of the monetary system in Western Europe
Conclusion
Literature
Introduction
One of the necessary conditions for sustainable equilibrium development of the national economy within the framework of a mixed economy is the formation of a clear mechanism for monetary regulation.
The monetary (monetary) system of the state is a very democratic tool for influencing a mixed economy that does not violate the sovereignty of the majority of subjects of the business system. Ideally, monetary policy should ensure price stability, full employment and economic growth - these are its highest and ultimate goals.
Monetary policy leads to a change in the values of the main macroeconomic parameters: GNP, inflation, unemployment. This is because through monetary methods it is possible to change the supply of money in the economic system. The mechanism of the impact of monetary policy on the main variables of the national economic complex, as well as the result of the correlation between the increase in the money supply and the state of the economy, is differently regarded in the Keynesian and monetarist theories used to make practical decisions by the monetary authorities.
The central emission bank of the state acts as a conductor of monetary policy. Such banks, for example, are the Central Bank of the Russian Federation (Bank of Russia), the Bank of England, the Bank of Japan, the National Bank of Moldova. In some countries, the functions of the central monetary institution are performed by a whole group of banks (in the USA, for example, the Federal Reserve System). Influencing the main object of monetary policy - the money supply, the central financial authority plays one of the leading roles in the state regulation of the market economy. Endowed by the state with the issuing right, the Central Bank implements a policy of stabilizing the economy, achieving a commodity-money balance.
The regulatory activity of the Central Bank is based on the analysis of the dynamics of macroeconomic indicators, including the gross national product and national income, the price index, the state budget deficit, and the total wage fund. It is aimed at exercising control over the state of the total money supply in the country and aims at the effective management of the total money turnover, including cash and non-cash components, by setting limits on the growth of the money supply.
Monetary policy at the macro level is a set of measures taken by the Central Bank in the field of money circulation and credit relations to give macroeconomic processes the direction of development necessary for the state.
The regulatory mechanism includes methods, tools for regulating cash and non-cash banking operations and specific forms of control over the dynamics of the money supply, bank interest rates, bank liquidity at the macro and micro levels.
The main goal of monetary policy is to help the economy achieve an output level characterized by full employment, lack of inflation and growth. In our country, at this stage, a rational monetary policy should minimize inflation and a decline in production, and prevent an increase in unemployment. Despite all her modesty, this task is quite difficult.
In my work, I tried to consider the main issues of the development of the monetary system, advantages and disadvantages, the monetary system of Western European countries, the development of the monetary system on the example of the United States.
monetary credit
1. The development of the monetary system and its role in the economy
The modern credit system is the result of a long historical development and adaptation to the needs of the development of a market economy. There are two concepts of the credit system:
1) a set of credit and settlement relations, forms and methods of lending;
2) a set of financial institutions actively used by the state to regulate the economy.
Credit relations are associated with the movement of loan capital and include various forms of credit. The credit system, as a set of financial institutions, accumulates free money capital, income and savings of various classes of society and lends them to enterprises, the government and individuals. The credit system mediates the entire mechanism of social reproduction and serves as a powerful factor in the concentration of production and centralization of capital, contributes to the rapid mobilization of free funds and their use in the country's economy. The modern credit system in Western countries was formed under the influence of such important processes as: the concentration and centralization of banking capital, which led to the emergence of giant banks; specialization of credit and financial institutions and the complication of the functional structure of the credit system; the merger or coalescence of banking and industrial monopolies and the formation of finance capital; internationalization of banking, the emergence of transnational banks and financial groups. Who in a developed market economy plays the role of intermediary credit institutions, which, on the one hand, accumulate temporarily free funds of market economy entities, and on the other hand, find channels for the commercially beneficial use of these funds. Any intermediary associated with lending operations acts in a dual role - both as a borrower who attracts loan capital, and as a lender who finds commercially profitable ways to allocate borrowed funds. This is where the division of all operations related to credit into passive and active arises; the first cover all actions to raise funds; second, actions to channel these funds into commercially profitable investments and operations. For both passive and active operations, interest is used as payment; whereas active operations are usually carried out with funds received from passive operations; the difference between these percentages (margin) is the main income of credit institutions.
a) a widely branched system of credit and financial institutions, including banking and non-banking organizations;
b) the securities market;
c) such credit intermediaries that have been preserved in a developed economy, which were typical of past, including feudal eras (usurers and related institutions).
The decisive role is now played by financial institutions and the securities market; it is they who accumulate and distribute over 90% of the total loan capital. In the structure of financial institutions, there are two main groups - intermediaries of a universal profile, dealing, in essence, with all or the vast majority of credit and financial operations of a passive and active nature, and intermediaries specializing in some specific operations. The main group of credit and financial institutions are banks. Banking is a specific form of entrepreneurial activity associated with the attraction and distribution of loan capital.
Functions of banks.
The main functions of banks include:
1) attraction of temporarily free money capital and their transformation into loan capital;
2) lending to enterprises, the state, individuals, transactions with securities;
3) making cash settlements and payments on the farm; 4) issue of credit means of circulation;
5) consultations and provision of economic and financial information. Raising temporarily free cash is one of the oldest banking functions. Banks concentrate a significant part of the accumulations and savings generated in the economy. The sums of money deposited in credit institutions bring investors income in the form of interest. Interest is not paid on current accounts; instead, the bank provides a variety of money transfer and withdrawal services for the client free of charge. The Bank contributes to the performance of the function of the loan to convert temporarily free money capital and savings into loan capital.
Providing a loan.
With the development of production, the growth of difficulties in the sale of goods, the scope of bank credit is expanding: it includes both the current production and circulation of goods, and long-term capital needs (purchase of equipment, shares, bonds, etc.). Until the 1950s, banks served mainly large clientele ("wholesale" operations). In connection with the increasing role of monetary savings in the personal sector, "retail" operations are developing - accepting small deposits, consumer loans, etc. Cash settlements and payments under economic transactions occupy a significant part of the operational time of the bank staff. In the USA, Great Britain, Canada and other countries, large sums of money are spent on mutual offset (clearing) of checks. In Germany, the Netherlands, France, Italy, some countries of Africa and Southeast Asia, another form of cashless payments has become widespread - fat turnover, i.e. transfer of funds to special accounts on the basis of special instructions (giroprikaz) without the use of cash. Issue of credit means of circulation. Banks lend to the clientele not only at the expense of accumulated temporarily free capital and savings, but also through deposit and check issue. They themselves create deposits in the process of issuing loans. When opening a loan, the bank credits money to a deposit with the right to issue checks within the limits of the account balance. In this case, the issuance of a loan precedes the opening of a deposit. On the basis of the deposit, checks arise. In addition, cash can be paid to the client at his request - banknotes. A bank's credit entry to a customer's current account, which is not accompanied by a preliminary deposit of money, is called an imaginary deposit, in contrast to a real deposit formed from a real deposit of money. In modern conditions, the distinction between real and imaginary deposits is gradually being erased: a cash deposit to a bank can be based on the creation of an imaginary deposit in another bank. It is almost impossible to separate imaginary contributions from real ones. The creation of deposits by banks and the issuance of credit money are of great importance for production. Advice and provision of economic and financial information. Banks concentrate information of a general economic and financial nature that is of interest to enterprises. Banks provide a variety of exchange and financial information, often of a confidential nature, primarily to enterprises associated with them by common interests and financial ties.
Types of credit institutions.
According to the ownership of capital, all banks and other financial institutions are divided into public and private. The state includes central banks, which are endowed with a monopoly on the issue of banknotes, the postal savings system and some special credit and financial institutions (for example, the American federal land banks, the US export-import bank). In some countries (France, Italy, etc.), the state also owns large commercial banks. The public sector in the credit system increases with the expansion of economic regulation. There are also interstate monetary and financial institutions: the International Monetary Fund, the International Bank for Reconstruction and Development, regional development banks, etc. Despite the nationalization of some credit institutions, the main functions of servicing the economy are performed by private institutions.
Credit institutions are divided into
1) central banks;
2) commercial banks;
3) special credit and financial institutions.
The emergence of central banks.
In the early stages of capitalism, commercial banks made extensive use of the issue of banknotes as one of the sources of capital mobilization. However, in the course of the development of the credit system, the issue of money was concentrated in a few large banks that enjoyed universal confidence, which ensured the widespread use of banknotes in the payment turnover. This process led to the monopoly securing the right to issue banknotes for one bank. Initially, such a bank was called the national, or issuing, then the central bank, which corresponded to its dominant position in the credit system.
Functions of central banks.
The main functions of modern central banks include: 1) issue of credit money;
2) accumulation and storage of cash reserves of other credit institutions;
3) storage of official gold and foreign exchange reserves; 4) lending to commercial banks;
5) granting loans and performing settlement operations for the government;
6) making settlements and transfer operations;
7) monetary and credit regulation of the economy;
8) control over the activities of credit institutions.
The issuing function is the oldest and one of the most important functions of a central bank. Under the gold standard, central bank notes were backed in two ways - commercial bills and gold. Now the issue of credit money is carried out mainly under government bonds. Because of this, the direct connection between the issue of banknotes and commodity circulation has weakened to a large extent, and its gold backing has been abolished. Despite the change in the composition of the money supply, central bank note issuance remains important, as cash is essential for retail payments and to provide liquidity to the credit system, which must have a means of final redemption of debt. The function of accumulation and storage of reserves of commercial banks has also undergone significant changes. At the beginning of the twentieth century. these reserves were kept at the central bank as a guarantee fund to pay off deposits. Later, the amount of cash reserves began to be regulated by law. For the first time, such an order was introduced in the United States when it was created in 1913. Federal Reserve System (FRS). Each bank - a member of the system is required to keep in a reserve account with the Federal Reserve Bank an amount in a certain proportion to the size of its deposits. Subsequently, the Fed gained the right to revise the required reserve ratio. Changing the reserve ratio has become one of the methods of monetary policy. The Central Bank is traditionally the custodian of the country's gold and foreign exchange reserves. The official gold reserve now plays the role of a reserve asset and a guarantee and insurance fund in international settlements. Central banks accumulate large reserves of gold. In some countries, this stock is managed by the Ministry of Finance, and the bank carries out technical operations with gold. Foreign currency reserves are also concentrated in central banks. These reserves are used for international payments, covering the balance of payments deficit and maintaining the exchange rate. Like the holding of bank reserves, lending to commercial banks has historically been linked to the issuance of central bank notes. Their issuance of banknotes and the concentration of official gold and foreign exchange reserves and deposits of credit institutions served as the basis for the expansion of credit operations. They became "lenders of last resort" in times of crisis and credit pressure. One of the oldest functions of central banks is to provide loans and settlement operations for government agencies. Central banks maintain accounts of government agencies and organizations, the treasury, local authorities, accumulate funds on these accounts and make payments from them; carry out operations with government securities; provide credit to the state in the form of direct short-term and long-term loans or the purchase of government bonds; carry out operations with gold and foreign currency on behalf of government bodies. The state budgets of the leading capitalist countries accumulate up to half or more of the GNP. These funds are accumulated in accounts at central banks and spent from these accounts. In a number of countries, some functions of the financial service of the state budget, in addition to central banks, are also performed by private banks. Central banks play an important role in servicing the public credit system, placing government loans. In addition to placing bonds among other holders, central banks spend huge amounts of money on buying government securities at their own expense, i.e. governments lend widely. The purchase of government securities is usually carried out by issuing money, which stimulates inflation. An important function of central banks is non-cash payments based on the offset of mutual claims and obligations, i.e. clearings. In a number of countries, central banks conduct nationwide clearing operations, acting as intermediaries between commercial banks located in different parts of the country. In addition to clearing settlements, central banks carry out money transfers on a large scale.
Monetary policy of central banks.
The set of measures aimed at changing the money supply in circulation, the volume of loans, the level of interest rates and other indicators of money circulation and the loan capital market, is called monetary policy. Its purpose is to regulate the economic situation by influencing the state of credit and money circulation. Monetary policy is aimed either at stimulating credit and money supply (credit expansion) or at containing and limiting them (credit restriction). With output falling and unemployment rising, central banks are trying to revive the economy by expanding credit and lowering the rate of interest. It is assumed that credit expansion can have a positive impact on the dynamics of capital investment, consumer demand and help bring the economy out of crisis. For example, an economic recovery is usually accompanied by "stock market fever", speculation, rising prices, growing imbalances in the economy. In such cases, central banks seek to prevent the “overheating” of the market by using credit restrictions: limiting credit, increasing interest rates, curbing the rate of issuance of means of payment, etc. The purpose of the central bank's monetary policy is to provide favorable conditions for financial capital. This goal is concretized in the tasks of the monetary control authorities: mitigation or elimination of cyclical fluctuations in production and employment of the labor force; regulation of economic growth rates; containment of inflation; alignment of the balance of payments. Attempts to eliminate the fundamental contradictions of production with the help of monetary policy, as a rule, do not reach the goal. Therefore, monetary measures are supplemented by direct forms of government intervention in the economy. However, in these cases, it is only possible to mitigate the severity of the crisis at the cost of disproportions in the economy. Monetary policy differs from other methods of state regulation by the indirect nature of the impact on the reproduction process. The most common is the following scheme of regulation: the money supply - the rate of interest - investment - national income. The central bank tries to directly change only the volume of money supply and credit. These operations affect the loan capital market, which finds expression in the dynamics of the rate of interest. The rate of interest, according to some economists, is important for investing capital. By changing the terms of investment, central banks ultimately influence production and employment. It was this scheme of monetary regulation that was put forward in the 30s of the XX century. bourgeois economist J.M. Keynes. The primary object of regulatory measures of the central bank is not the issue of money or the volume of credit, but the amount of amounts in the reserve accounts of credit institutions in this bank. There is a relationship between the amount of reserves and credit operations of banks, which is determined to a large extent by the legislation on minimum required reserves. With the growth of deposits (including imaginary deposits), the amount of reserves should increase. Therefore, if during a credit expansion banks become short of funds in their reserve account, they are forced to slow down or stop issuing new loans, sell part of the securities portfolio and take other measures to restore the ratio between reserves and the size of their operations. This may lead to a slowdown and even a halt in the growth of bank loans. For example, if banks have an excess of funds in a reserve account (compared to reserve ratios), they are able to expand loans and create new deposits. As a result, the inflow of bank capital to the market increases. By regulating the reserve position of banks, the central bank is trying to influence the state of the loan capital market.
Monetary policy methods are divided into two groups: general, affecting the loan capital market as a whole, and selective, designed to regulate specific types of credit or lending to individual industries, large firms, etc. Common methods include: accounting (discount) policy; open market operations; change in the norms of required reserves.
Accounting policy is the oldest method of credit regulation: it has been used by the Bank of England since the middle of the 19th century. This method was associated with the transformation of the central bank into a creditor of commercial banks. The latter rediscounted their bills with him or received loans against their own debt obligations. By raising the lending rate, the central bank encouraged other lending institutions to reduce borrowing. This made it difficult to replenish reserve accounts, led to an increase in interest rates and, as a result, to a reduction in credit operations. If the central bank lowered the discount rate, it made it easier for commercial banks to replenish reserve accounts and thus encouraged credit expansion. The importance of rediscount operations is determined by the relative freedom of movement of capital between countries: an increase in the rediscount rate helps to attract foreign capital into the country and reduce the balance of payments deficit; lowering the rate contributes to the outflow of capital from the country. Restrictions on the movement of capital and credits weaken the effectiveness of the rediscount policy in this area as well. In the 1930s and 1940s, central banks pursued Keynes' recommended policy of "cheap money," that is, low interest rates and abundant credit. In Great Britain from 1932 to 1951 the rediscount rate remained at the level of 2%, in the USA from 1937 to 1948 - 1%. A major role in maintaining low rates was played by the desire to provide Treasury lending on favorable terms during and after the Second World War. Since the 1950s, active accounting policies have revived in many countries. However, in general, the importance of this method of regulation has decreased compared to others.
Open market operations involve the central bank buying or selling government securities, banker's acceptances, and other credit obligations at market or pre-announced rates. In the case of a purchase, the central bank transfers the corresponding amounts to commercial banks, thereby increasing the balances in their reserve accounts. When securities are sold, the central bank debits these accounts. Thus, these operations are used as a method of regulating bank reserves, as well as interest rates and the rate of government securities. The increase in the government bond market and the transition to active buying by central banks in the 40s of the XX century. created the prerequisites for the transformation of open market operations into the main method of monetary policy. These operations are widely used in the USA, Great Britain, Canada. Their introduction in other countries is hampered by the lack of a sufficiently wide and active market for government bonds there; since the 50s they have been used in Germany, the Netherlands, Japan, Scandinavian countries.
Changing the norms of required reserves held by credit institutions in the central bank is a method of direct impact on the amount of bank reserves. This method was first introduced in the USA in 1933. Now it is used in many countries. In addition to the general methods of monetary regulation, selective ones are used in the practice of central banks. These include: direct limitation of the size of bank loans; control over certain types of loans. A direct limitation on the size of bank loans took the form of setting maximum limits on the accounting of promissory notes for individual banking institutions. Control over certain types of loans is often practiced for loans secured by exchange-traded securities, for consumer loans for the purchase of goods in installments, and for mortgage loans. Regulation of consumer credit is usually introduced during periods of tension in the loan capital market, when the state seeks to redistribute these capitals in favor of priority industries or limit consumer demand.
The 1970s and 1980s saw important changes in monetary policy. Typically, when setting the course of policy, central banks used data on the level and dynamics of interest rates as a guide. This practice was consistent with the tenets of Keynesian economic theory about the key role of interest in the investment process. Influenced by the ideas of the neoclassical trend in bourgeois political economy, since the mid-1970s, central banks have been paying great attention to regulating the size and growth rate of the money supply. According to the theory of monetarism, the main spring of cyclical fluctuations in the conjuncture and the inflationary process is the random change in the money supply. Monetary policy is one of the main macroeconomic instruments, based on the ability of the monetary system to influence the money supply and, accordingly, the interest rate. Based on the theoretical position of a self-regulating economic system. The bottom line is in two theses: money is the main driving force of a market economy; The central bank can influence the money supply. It is proposed to maintain the growth rate of the money supply at the level of 3-5% per year. Otherwise, the mechanism of private entrepreneurship is violated, inflation is growing. The impact on the economy is reduced to maintaining a constant growth rate of the money supply. In this regard, many countries introduced targeting of the money supply (from the English. target - goal), which consisted in setting targets - the lower and upper limits of various monetary aggregates for the coming period (quarter, year, etc.). In the USA and Germany, targeting was introduced in the early 70s, Canada - in 1975, France and Great Britain - in 1978. In most countries, targeting has degenerated into a mere formality: the "forks" of the growth limits of the money supply are adjusted to the actual growth rates for the previous period, and the central bank is not responsible for violation of these limits.
The boundaries of monetary regulation.
Central banks can exert a certain influence on the state of the loan capital market and, through it, on the economy. But they are not able to overcome the patterns of reproduction that give rise to crisis recessions and other violations of the economic mechanism. The actions of central banks are inherently contradictory, since they are simultaneously aimed at achieving different, often incompatible goals. Cheaper credit and attempts to stimulate production, as a rule, contribute to the disruption of proportions in the economy and increase inflation. The policy of strict regulation of the money supply does not give the desired results, since inflation is a complex multifactorial process that cannot be contained by monetary measures. In the context of a currency crisis and falling exchange rates, central banks are trying to improve the state of the balance of payments by raising interest rates and attracting capital to the country. The rise in the cost of credit contradicts the orientation towards the growth of production.
Commercial banks and their operations. Commercial banks are universal institutions. They carry out credit, stock, intermediary, settlement operations, serve various clientele - from the largest corporations to small borrowers and depositors. Bank operations are divided into three main groups: passive (raising funds); active (placement of funds); commission and intermediary (on behalf of the client on a commission basis) and trust.
Passive bank operations. The bank's resources consist of its own, borrowed and issued funds. Equity includes equity and reserve capital, as well as retained earnings. Equity capital is mobilized by placing shares on the securities market. reserve capital is formed by deductions from current profits. It is designed to cover unforeseen losses, losses from falling securities prices. The retained earnings account is an intermediate, transit account. It accumulates profit that is not distributed among shareholders in the form of dividends and is not credited to the reserve. The allocation of profits to a reserve often serves as a method of reducing tax payments, since many types of reserves are tax-exempt. Own funds are borrowed funds in the form of deposits (deposits), as well as checking and correspondent accounts. The source of the banks' resources are also issued funds, formed by the creation of imaginary deposits by banks and acceptance-availability operations. Acceptance - consent to payment of monetary and commodity documents - is made in the form of an inscription of the bank, for example, on a bill, check. Aval, i.e. a payment guarantee is issued either by a guarantee inscription on a bill of exchange, or by issuing a special document. On an accepted bill of exchange, the bank makes payment at the expense of the client, who transfers the necessary amount to him in advance, and in case of an emergency operation, the bank makes payment only in the event of the debtor's bankruptcy. Acceptance-aval operations are simultaneously and in equal amounts reflected in the bank's balance sheet assets (claims on the client, on whose orders these operations are made) and in liabilities (the bank's obligation under the accepted document).
Bank's active operations. In the assets of banks, credit (accounting and loan) operations with securities (stock) are distinguished. They account for up to 80% of the total balance. In addition, banks carry out cash, acceptance transactions, transactions with foreign currency, real estate, etc. The ratio of the main types of banking operations is changing under the influence of the economic situation, the industrial cycle, foreign policy events, etc. Credit transactions are classified into loans without collateral (blank) and secured; on-call (on demand), short-, medium- and long-term; repaid by a lump sum and in installments, etc. Stock transactions of banks - a variety of operations with securities: the purchase of securities for their own portfolio (investments), the initial placement of newly issued securities among holders, the purchase and sale of securities on behalf of a client (servicing the secondary circulation of securities securities), loans secured by securities.
Commission-intermediary and trust operations. The most important intermediary operations: collection, letters of credit, transfers and trade commissions. A special place is occupied by trust operations, which are outwardly similar to intermediary operations, but go beyond them, and leasing operations. Collection operations - operations through which the bank, on behalf of its client, receives money on monetary and commodity-settlement documents. Checks, bills of exchange, securities, foreign currency, etc. are accepted for collection. A letter of credit is an instruction to pay a certain amount to a person or company upon fulfillment of the conditions specified in the letter of credit. Transfer operations consist in the transfer of money deposited in a bank to a recipient located elsewhere. Leasing operations are the purchase of machinery and equipment and leasing them to a tenant company, which pays the cost of rent as the property is used.
Special credit and financial institutions are engaged in lending to certain areas and branches of economic activity - industry, agriculture, foreign trade, cooperation, etc. As a rule, one or two main operations can be distinguished in their activities. These institutions dominate relatively narrow sectors of the loan capital market and, as a rule, have a specific clientele. Investment banks are engaged in issuing and founding activities, i.e. carry out operations on the issue and placement on the market of industrial securities. Savings institutions attract small savings and income, which without the help of the credit system cannot function as capital. The most important of the special credit and financial institutions are insurance companies. They are characterized by a specific form of raising funds - the sale of insurance policies. Pension funds are created by companies and government agencies to pay pensions. Investment companies place their obligations (shares) among small holders and use the funds received to purchase securities of enterprises in various sectors of the economy. Financial companies include a variety of institutions that lend to the sale of goods in wholesale and retail trade.
2. The development of the monetary system on the example of the United States
The modern monetary system includes the following elements; monetary unit; price scale; types of money; emission system; state or credit apparatus for regulating monetary circulation.
An integral part of the US monetary system is the national monetary system, although it is relatively independent.
A monetary unit is a legally established currency that serves to measure and express the prices of all goods. The monetary unit, as a rule, is divided into small multiples. In the United States, the decimal division system is 1:10:100. (1 US dollar equals 100 cents).
The following are in circulation in the United States: banknotes of 100, 50, 20, 10, 5, 2 and 1 dollars (the issue of banknotes of 500 and more dollars has been discontinued); $100 Treasury notes; silver-copper and copper-nickel coins of 1 dollar, 50, 25, 10, 1 cent. If in industrialized countries, as a rule, government paper money in the narrow sense of the word (treasury notes) is not issued, then in some developing countries they have a fairly wide circulation.
The issuing system is represented by the treasuries in accordance with the legally established issuing right. The main channel for issuing money in these countries is the deposit and check issue: an increase in deposits in customer accounts and, accordingly, the mass of checks serving the payment turnover. It involves commercial banks and other credit organizations. The right to issue banknotes is granted to the Federal Reserve System (Central Bank), and small currency notes, silver dollars and small change - to the Treasury.
Due to the fact that monetary policy is closely connected with credit policy, under the conditions of modern capitalism, state monetary and credit regulation of the economy is carried out. Targeting has been introduced in the USA since the 1970s. setting targets in regulating the growth of money supply in circulation for the coming period, which are followed in their policies by central banks. Since 1975, the Federal Reserve System (FRS) has periodically reported to Congress on the planned rate of growth or contraction of the money supply for the coming 12 months.
One of the most serious difficulties faced by the US economy was inflation. This problem became especially acute in the 1970s. For example, in the United States, inflation rates have tripled in a decade from 4% to 13% per year. The reason for this situation in the United States was the loss of confidence in the way the American economy is managed. The position of the dollar in foreign currency markets has weakened, and in the markets of credit resources, the rates of interest for their provision have significantly increased.
The strengthening of inflationary processes forced economists to conduct a number of studies in this area. As a result of the work carried out, scientists concluded that it is necessary to establish control over monetary aggregates. In other words, experts concluded that the velocity of money, expressed as the ratio of the nominal volume of production to the value of the population's demand for money, is a fairly stable and predictable indicator.
where: V - the speed of circulation of the money supply;
Y - nominal production volume;
M - the value of the money supply in circulation.
Based on the formula, it was proposed to fight inflation. If the velocity of circulation is stable, then the desired volume of production can be achieved by setting the appropriate values for the amount of money in circulation. It should be noted that in practice this process is more complicated, since the choice of a monetary variable affects the level of interest rates, which, in turn, affects "the degree of attractiveness of keeping funds in accounts", that is, the velocity of money. The amount of nominal income can be expressed as follows:
Y - growth of nominal income;
P - inflation rate;
y is the growth rate of real output.
It was recognized that the current growth rates of real output will approach the potential growth rates of the volumes of resources involved in economic activity, as well as their productivity. Monetary policy will not be able to seriously influence the long-term trend of output growth, or this influence will be negative, as the monetary system is destabilized and obstacles are created to investment in the economy. Under such conditions, a change in the growth rate of nominal income will mean a similar change in the rate of inflation. Therefore, the elimination of inflation and the restoration of control over pricing requires a slowdown in the growth of the money supply. The US monetary policy is based on the above concept. Based on it, in 1978, the US Congress passed legislation obliging the Federal Reserve System (FRS) to set limits on the growth of money and credit supply. The "Full Employment and Balanced Growth Act" was also adopted. It indicated the goals of monetary policy: ensuring a high level of employment and maintaining price stability. To achieve this, the Fed was required to annually announce the amount of money supply and credit resources for the next year, which should affect the expected functioning of the economy and inflation rates.
While recognizing that it is not always possible to maintain the desired balance between money supply growth and economic growth rates, the law does not oblige the Fed to strictly adhere to the declared parameters of the money supply. However, if there is a discrepancy, the Fed must explain their reasons. Money supply and credit emission are announced in February of each year and adjusted in a report submitted to Congress in June. This report also refers to preliminary estimates of these values for the next year.
This policy has three main goals: first, limiting price increases. Second, public notice of the Fed's future strategy so that businesses and individuals can align their economic behavior with the intentions of the central bank. Thirdly, strengthening the accountability and responsibility of the Central Bank for the decisions it makes and the achievement of the intended goal.
It should be noted that the experience of American economists in the field of fighting inflation can be useful in carrying out anti-inflationary measures.
Monetary policy in the classical sense took place in the United States only between October 1979 and October 1982. The Federal Open Market Committee announced changes in monetary policy due to the possibility of rising inflation and uncertainty about the effectiveness of setting target interest rates. The use of the interbank interest rate as a tactical target was discontinued, and the growth rate of the narrow monetary aggregate M1 (includes cash in circulation and demand deposits in commercial banks) became a new intermediate target.
The new approach to monetary policy is based on the monetarist assumption that inflation is always and everywhere the result of an increase in the growth rate of the money supply relative to the growth rate of real production. However, an attempt to implement a monetary targeting policy by indirect methods had unfavorable results, and in the USA it was abandoned in October 1982 after three years of use. Practice has shown that the influence of the monetary authorities on the money supply is carried out mainly through the demand for money, and for this there are more effective tools, such as interest rates, although in all cases an element of uncertainty remains.
While refusing to follow the simple rule of money supply growth, the regulators nevertheless still experience the influence of monetarism in the conduct of monetary policy in the sense of its persistent anti-inflationary direction.
The question of effective intermediate goals of monetary policy is still debatable. US governments and central banks, based on the fact that none of all possible intermediate goals of monetary policy can be considered ideal, took control of a number of parameters of the economic system. These are indicators of the money supply, the conditions and volumes of loans provided, the exchange rate, the dynamics of price indices, etc.
3. Features of the monetary system in Western Europe
The success of monetary policy depends on the chosen principles of monetary regulation. As already noted, in modern conditions there is no one dominant doctrine. Theoretical models take on synthetic forms, which makes monetary policy more flexible.
An essential feature of the monetary regulation of banks in Western countries was the focus on the principles of monetary policy, which is based on the method of monetary targeting. Monetary policy was built on the basis of simple calculations of the regression relationship between the volume of money supply and inflation rates. The money supply targeting system as a form of monetary policy of the central banks of developed countries took shape only in the 1970s. and was used in established market economies, where the profitability of the real sector is not lower than the profitability of the financial sector.
The profitability of the financial sector was limited by strict state regulation of interest on loans and deposits, control over foreign exchange transactions, restrictions or prohibitions on credit transactions in the stock market. Refinancing was carried out mainly through the accounting and rediscounting of promissory notes. The prevailing economic proportions made it possible to reveal the existence of a relationship between the growth rates of the money supply, real and nominal GNP, to determine the money demand function, and under these conditions to formulate monetary policy based on the "simple rule of money supply growth." However, as practice has shown, it was not effective enough, and it was abandoned already in the early 80s. Central banks were unable to keep the growth of the money supply within the specified parameters even with a sufficiently developed toolkit.
Even greater problems in the use of the monetary targeting system arise in countries with economies in transition. The following can be singled out as objective factors: firstly, the demand for money is unpredictable (and this underlies the entire concept of monetary targeting); secondly, the money demand function is unknown; thirdly, the use of monetary planning for short-term financial stabilization purposes, while in monetary theory it is a guideline for medium- and long-term policies, and, finally, the difficulty of controlling the money supply due to undermining confidence in the national currency and the so-called dollarization of the economy.
The modern credit system, which is the main element of the loan capital market, consists of the following main institutional links, or tiers:
I. Central bank, state and semi-state banks.
II. Banking sector:
¦ commercial banks, .
the savings banks,
¦ investment banks,
mortgage banks,
¦ specialized commercial banks, banking houses.
III. Insurance sector;
the insurance companies,
¦ pension funds.
IV. Specialized non-bank credit and financial institutions:
investment companies,
financial companies,
- charitable foundations
¦ trust departments of commercial banks,
savings and loan associations
¦ credit unions.
Such a scheme is typical for most industrialized countries - mainly for the United States, Western European countries, and Japan. It is usually called four-tier or three-tier (in some cases, the insurance sector is combined with the fourth tier, which goes under the general name of specialized non-bank financial institutions).
However, in terms of the degree of development of certain links, individual countries differ significantly from each other. The United States credit system is the most developed, therefore, all industrialized countries of the West were guided by it in the formation of the credit system in the post-war period.
In the credit system of Western European countries, the banking and insurance sectors have been widely developed, and to a lesser extent, the specialized sector in the form of investment and financial companies, trust departments, and charitable foundations. A wide network of semi-state or state credit institutions has been formed here, including commercial and savings banks, insurance companies, etc. (France, Italy, Spain, Scandinavian countries).
The credit system of Western European countries in its structure is close to the US credit system, but each country has its own characteristics. Thus, in Germany the banking sector is based mainly on commercial, savings and mortgage banks. Moreover, unlike other countries, the institution of mortgage banks here (although it acts as an anachronism of the 19th century) is very developed and occupies a large share in the credit system and in the loan capital market. At the same time, the system of investment banks in Germany is less developed than in the US, England, Canada. This is partly due to the fact that its commercial banks serve as investment banks.
France is characterized by the division of the banking link mainly into deposit (commercial) banks, business banks that perform investment functions, and savings.
After a slight decline in economic activity in the postwar years at the end of the 20th - beginning of the 21st century. there was a relative stabilization of the economic situation in the UK. In particular, the concentration of banking and industrial capital increased. A feature of the country's financial structures is a large share of banking capital, flexible organizational structures of financial and industrial groupings, which often represent consortiums that control a wide variety of sectors of the economy.
The financial sector employs about 4 million people (12% of the country's labor force). London remains the world's largest financial center after New York, although British banks do not play their former role in financial and capital markets today. In this capacity, it is defined by four markets: gold, currency, short-term and medium-term credit and insurance. With Europe's most efficient financial infrastructure, London holds the world's leading position in terms of turnover in the international financial and capital markets and in terms of the number of active foreign banks. The British capital is the 3rd largest stock exchange in the world in terms of operations. The London capital market accounts for up to 60% of world trade in foreign shares, more than 30% of world currency transactions are carried out in the City. The largest volume (approximately 20% of the world market) of insurance and reinsurance operations passes through London. The strength of Britain's financial capital today far exceeds the potential of its economy.
The world's oldest Central Bank Bank of England (established at the end of the 17th century) is currently changing its organization and functions, which are divided into direct professional duties (deposit and loan, settlement and issuing operations) and control functions with the participation of the state. The specificity of the relationship between the state and its Central Bank allows the government to pursue a free monetary policy with more flexible means, and gives the City financial oligarchy confidence that its interests will be defended under any government and any economic course.
In terms of equity capital, the 1st place in the UK banking and credit system is occupied by the bank Holding Hong Kong and Shanghai Banking Corporation (HSBC - Holding Hong Kong and Shanghai Banking Corporation). This bank, together with the American Citibank and Bank of America, is the top three largest banks in the world.
The characteristic features of the modern monetary systems of Western European countries are:
¦ the abolition of the official gold content and the exchange of banknotes for gold; demonetization of gold;
¦ transition to credit money that cannot be exchanged for gold;
¦ the issuance of banknotes into circulation not only in the form of bank lending to the economy, but also to a large extent to cover the costs of the state (issue security is mainly government securities);
¦ predominance of non-cash circulation in money circulation;
¦ Strengthening the state monopoly regulation of money circulation.
Formed during and after the global economic crisis of 1929-1933. currency blocs ensured the preservation in developing countries of monetary systems dependent on metropolitan countries that controlled the issuing institutions and their operations. The size of the emission was determined by the state of the balance of payments, and not by the needs of the economy. During and after the Second World War, on the basis of pre-war currency blocs, currency zones were created, the characteristic features of which are: maintaining a firm exchange rate against the main currency; storage of national currencies in the banks of the hegemonic country; preferential procedure for currency settlements within the zone.
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Faculty of Economics and Management Department of State and Municipal Management
COURSE WORK
in the discipline "Economics of the public sector"
State monetary policy
Head of work Senior Lecturer
Comptroller
Executor
student of group "_"_20_g.
Ministry of Education and Science of the Russian Federation
FEDERAL STATE BUDGET EDUCATIONAL INSTITUTION OF HIGHER PROFESSIONAL EDUCATION
Faculty of Economics and Management
Department of State and Municipal Administration
Assignment for term paper
State monetary policy
Initial data:
Legislative and regulatory legal acts of the Russian Federation, statistical data from Rosstat, the Ministry of Economic Development, the Ministry of Finance, as well as publications of domestic and foreign economists on the problem under study.
List of issues to be developed:
a) reveal the essence of monetary policy;
b) analyze the implementation of Russia's monetary policy;
List of graphic material:
Tables, diagrams, figures reflecting the main aspects of monetary policy.
annotation
In this course work "The monetary policy of the state" considers the issues of monetary policy on the example of the Russian Federation.
The structure of this work is as follows.
The first chapter discusses the theoretical foundations and features of monetary policy, tools and objectives of monetary policy, models, as well as world experience in implementing this policy.
The second section analyzes the monetary policy for the period from 2008 to 2011, discusses the features of the implementation of monetary policy in the Russian Federation.
The work was printed on 44 pages using 26 sources, contains 5 tables, 7 figures and 1 appendix.
Introduction
One of the necessary conditions for the effective development of the economy is the formation of a clear monetary policy mechanism that allows the Central Bank to influence business activity, control the activities of commercial banks, and achieve stabilization of monetary circulation.
Monetary policy is a very effective tool for influencing the country's economy, which does not violate the sovereignty of the majority, the subjects of the business system. Although in this case there is a restriction of the scope of their economic freedom (without this, no regulation of economic activity is possible at all), but the state influences the key decisions made by these entities only indirectly.
Ideally, monetary policy is designed to ensure price stability, full employment and economic growth - these are its highest and ultimate goals. However, in practice, with its help, it is also necessary to solve narrower tasks that meet the urgent needs of the country's economy.
We must not forget that monetary policy is an extremely powerful and therefore extremely dangerous tool. With its help, it is possible to get out of the crisis, but a sad alternative is not ruled out - the aggravation of the negative trends that have developed in the economy. Only very balanced decisions made at the highest level after a serious analysis of the situation, consideration of alternative ways of influencing monetary policy on the economy of the state, will give positive results. The central emission bank of the state acts as a conductor of monetary policy. Without the correct monetary policy pursued by the Central Bank, the economy cannot function effectively.
Today, in Russia, an effective monetary policy is designed to minimize inflation, promote sustainable economic growth, maintain exchange rate ratios at an economically justified level, stimulate the development of export-oriented and import-substituting industries, and significantly replenish the country's foreign exchange reserves. The task is quite difficult.
In this paper, the theoretical foundations of monetary policy will be considered, the monetary policy pursued by the Bank of Russia for the period from 2008-2011 will be analyzed, and a forecast for 2013-2015 will be given. and proposed the main ways to improve its efficiency.
Introduction ................................................ ................................
1 Essence, goals, instruments and models of monetary policy
states ................................................. ...............................
1.1 Essence, goals and instruments of monetary policy
states ................................................. ...............................
1.2 Models of the government's monetary policy...............................................
1.3 World experience in the implementation of monetary policy..................................
2 Analysis of the effectiveness of monetary policy in the Russian
Federation at the present stage .............................................................. .....
2.1 The role, functions and instruments of the Central Bank of the Russian Federation ..............................
2.2 Characteristics of the monetary policy of the Bank of Russia,
carried out in 2008 - 2009 .............................................. ..........
2.3 Monetary policy in 2010-2011 ..............................................
3 Prospects for Development and Measures to Improve the Monetary Policy of the Russian Federation..................................................................................
3.1 Macroeconomic development scenarios, goals and instruments for
2013 and the period of 2014 and 2015 .............................................. ......
3.2 Measures to improve Russia's monetary policy...
Conclusion................................................. ................................................. .......
List of sources used ..............................
Appendix A - Structural subdivisions of the Central Bank of the Russian Federation .............................................. .........................
1.1 Essence, goals and instruments of the state monetary policy
The monetary policy of the state is understood as a set of measures of economic regulation of money circulation and credit aimed at ensuring sustainable economic growth by influencing the level and dynamics of inflation, investment activity and other important macroeconomic processes.
The monetary, or monetary, policy of the state is a set of government measures in the field of money circulation and credit in order to regulate the supply of monetary resources to ensure non-inflationary economic growth.
Monetary policy is part of the overall macroeconomic policy that affects monetary factors of instability.
Monetary policy is to change the money supply in order to stabilize aggregate output (stable growth), employment and price levels.
The fundamental objectives of the state monetary policy are:
Sustainable growth rates of national production;
Stable prices;
High level of employment of the population;
Equilibrium of the balance of payments.
Also, the objectives of monetary policy can be divided into primary, intermediate and tactical. Figure 1 demonstrates this.
Figure 1 - Objectives of monetary policy
Monetary policy is carried out by the Central Bank of the country.
The effectiveness of monetary policy depends on the choice of instruments (methods) of monetary regulation.
The main general instruments of monetary policy are:
Establishment of a mandatory reserve ratio;
Regulation of the official discount rate;
Open market operations;
administrative measures.
The discount rate policy (discount policy) is expressed in the regulation of the rediscount rate in the Central Bank of bills (written obligations of debtors to pay a certain amount at a predetermined date in a specified place) received from commercial banks. Those, in turn, receive bills of exchange from industrial, commercial and other companies. When determining their loan interest, commercial banks are guided by the discount rate of the Central Bank.
The change in the value of the discount rate depends on the state of the economic situation: in a recession, the rate decreases and credit expands, and when the economy rises and there is a threat of overheating of the economy (that is, the threat of production going beyond effective demand in the market), the rate increases, and the volume of lending decreases.
According to the system of required reserves, commercial banks are required to keep a certain part of their credit resources in interest-free accounts of the Central Bank. The amount of reserves is set by the Central Bank in relation to deposits of commercial banks and ranges from 5 to 20%. Like the discount rate, the amount of reserves is adjusted depending on the economic situation. During an economic recovery, an increase in the reserve ratio limits the lending capacity of commercial banks and, consequently, their credit expansion. A decrease in the reserve ratio during an economic downturn means an expansion of the credit resources of banks and the volume of their credit operations, commercial banks are the main object of regulation of the required reserve ratio, and other institutions usually follow the interest rate policy of commercial banks.
The regulation of the money supply through operations on the open market is expressed in the sale and purchase of government bonds by credit banking institutions. By selling bonds on the open market, the Central Bank thus reduces the credit resources of commercial banks and other credit institutions. These operations of the Central Bank reduce the supply of credit by banks and, therefore, contribute to an increase in interest rates in the market. And vice versa, by buying up part of such securities, the Central Bank expands the credit resources of commercial banks and other lending institutions.
The direct administrative influence of the state on the credit and banking system is one of the main means of monetary regulation carried out by the Central Bank. In practice, it finds expression in direct instructions to credit institutions in the form of various directives, instructions, as well as the application of sanctions. These measures mainly apply to commercial and savings banks.
The Central Bank controls the activities of commercial banks (especially suspicious transactions), conducts regular audits of credit institutions. Of great importance in credit regulation is the legislative and regulatory practice carried out by public authorities - parliament, government, local administration.
Closely related to credit regulation is the regulation of cash in circulation, also carried out by the Central Bank. His policy in this area is closely linked with the above four methods of credit regulation, and consequently, the sphere of circulation of credit (deposit) money. There are complex relationships between credit regulation and regulation of the money supply. For example, if the Central Bank carries out active operations for the sale of securities, then this action leads to a reduction in the supply of deposit money, and vice versa, the purchase of such securities is tantamount to expanding the deposit part of the money supply in circulation. The influence of the interest rate policy of the Central Bank and the system of required reserves is similar. Modern macroeconomic theory includes several concepts competing with each other, trying to explain the mechanism of the functioning of the market system and give recommendations on the management of the national economy, including in the field of monetary relations.
Representatives of various economic schools offer different ways to influence macroeconomic parameters with the help of monetary policy. The most famous are the Keynesian and monetarist concepts of monetary policy.
The Keynesian concept arose in the 1930s. In practice, it was applied in the United States by the administration of President F. Roosevelt to overcome the economic crisis, which was called the Great Depression. This kind of policy after World War II was also widely used in Western European countries.
The Keynesian concept provides for the active role of the interest rate in stimulating investment and entrepreneurial activity. J.M. Keynes proposed to use the "policy of cheap money" during periods of economic recession by lowering the discount rate of interest. Conversely, during periods of economic recovery, he proposed using a "dear money policy" by raising the discount rate in order to prevent the overheating of the economy and high inflation, which, as a rule, accompanies an economic boom.
Thus, according to Keynesian theory, monetary policy should be carried out in connection with certain phases of the economic cycle and promptly respond to the state of the national economy. However, it should be noted that although the Keynesians consider the possibility of the impact of the interest rate on the size of investment and on real GDP, they simultaneously point out the possibility of the so-called "liquidity trap". The meaning of the “liquidity trap” is that in the face of an increase in the parameters of the money supply (that is, with a large scale of liquidity offered) and, consequently, with a decrease in the interest rate, investors still do not have a desire to expand the demand for money. This situation occurs when investors have no expectation in profits.
In this case, the causal relationship between the lowering of the interest rate and the increase in the money supply, on the one hand, and the expansion of investment activity, business activity and the scale of GDP, on the other hand, is broken. Therefore, Keynesians believe that monetary policy is still not as effective as fiscal policy.
In the 70-80s of the twentieth century, almost all countries with a market economy faced the phenomenon of stagflation, when economic recession and stagnation in the economy were accompanied by high rates of unemployment and inflation.
In such a case, an active policy of cheap money, which was directed against recession and unemployment, led to the fact that inflation was even more exacerbated. In turn, high inflation hindered the desire to expand investment activities, and investors refrained from implementing investment projects. Consequently, the policy of cheap money did not achieve its goal.
At the same time, an anti-inflationary policy of expensive money could further exacerbate the recession and unemployment, as high interest rates curbed investment demand.
Under these conditions, the positions of the neoclassicists begin to strengthen in economic theory. In particular, there is an expansion of the influence of such a trend in neoclassical economic theory as monetarism. The most important representatives of the monetarist trend in economics are the American economists Irving Fisher and Milton Friedman.
Monetarists believe that active state intervention in the economy is inappropriate and should be limited only to the regulation of the money supply. Justifying their opinion, monetarists draw attention to the existence of so-called time lags in the economy. Time lags are periods of time between the adoption of certain economic decisions, including by the government and the central bank, and changes in the real situation in the economy. The time lag can be 6-9 months long. This is the period when economic actors will respond to the actions of government bodies. It is quite possible that the measures taken by the state will be belated.
Monetarists argue that monetary policy should not be associated with the phases of the economic cycle and it is necessary to move to a long-term policy of influencing the parameters of the money supply. In their opinion, there is a closer relationship between the amount of money in circulation and GDP parameters than between investment and GDP, and the dynamics of GDP follows the dynamics of changes in the money supply. The relationship between the parameters of nominal GDP and the amount of money in circulation in economic theory is described using the equation of exchange, the author of which, as noted earlier, is I. Fisher. According to monetarists, a change in the scale of the money supply can play an active role in influencing the price level, investment, unemployment, and GDP parameters.
In order to keep the country's economy in the mode of economic growth, it is necessary to annually increase the money supply in circulation, regardless of the phases of the cycle, by the amount of the average annual GDP growth rate calculated over a long period of time.
M. Friedman calculated that for the United States this average annual increase over a period of about a hundred years was equal to three percent. He substantiated and formulated the monetary rule, which found expression in the Friedman equation.
M - the average annual growth rate of money, calculated over a long period of time.
Y is the average annual GDP growth rate calculated over a long period of time.
P is the average annual growth rate of expected inflation.
The monetary rule assumes a strictly controlled increase in the money supply in circulation within 3-5% per year. With an increase in the money supply in excess of the specified parameters, inflation will “unwind”. Therefore, monetarists believe that inflation is the result of an ill-conceived policy of the state. If the rate of injection of money into the economy is less than 3% per year, then this will lead to a slowdown in the growth rate of real GDP, or even negative growth may be observed.
In turn, if the state adheres to a constant rate of growth of the money supply in the indicated parameters, then entrepreneurs in the money market will always find the money they need for investment, to replenish working capital, to pay wages. If at the same time the price of money (interest rate) is relatively high, then this will cut off a significant part of speculative transactions. According to monetarists, in order to fight inflation, it is necessary to make the monetary unit steadily expensive in order to prevent the expansion of speculative demand and make savings efficient. Entrepreneurs, knowing that the interest rate will be stable over a long period of time, and being sure that they will always find the amount of money they need in the money market, will be able to more accurately calculate their income from investment projects. Therefore, a higher price of money will not distract them from actions in favor of the implementation of investment investments and will ensure economic growth.
Modern theoretical models of monetary policy are a synthesis of different approaches to the impact of monetary instruments. At the same time, the monetarist approach prevails in long-term policy. At the same time, in order to quickly maneuver, the state does not refuse to influence the interest rate.
1.3 World experience in the implementation of monetary policy
The world economy has accumulated vast experience in the functioning of monetary and financial institutions, which makes it possible to assess their role in the overall monetary regulation of the economy, maintaining market liquidity, efficient payments, and the transfer of savings into investments. In the conditions of Russia, the country is of particular interest in familiarization with foreign experience in solving a number of problems of financial and economic stabilization, in particular, on the example of the most developed
countries of the world - Great Britain, Germany, Japan, USA and Mexico, which is one of the most developed countries in Latin America.
The Central Bank of Great Britain (Bank of England) is the government's adviser on monetary policy and its conductor. In the postwar years, he used almost all the main methods of monetary policy. In the 1940s monetary policy in accordance with the Keynesian recipes was seen as an addition to the financial one and was aimed mainly at the maximum reduction in the cost of public debt: a policy of "cheap money" was pursued, i.e. keeping interest rates low. The main instruments of monetary policy were the establishment of a fixed ratio of cash reserves to bank deposits and open market operations.
In the 1950s-1960s. monetary policy was carried out on the basis of neo-Keynesian concepts of counter-cyclical regulation. The peculiarities of the monetary regulation mechanism were frequent changes in the official discount rate, tightening or loosening of direct restrictions on bank loans depending on the state of the economic situation, the state of the balance of payments, the scale of inflation, as well as the use of operations with government bonds to stabilize their rates and lower the price of public debt. .
In 1971 the conservatives who came to power proclaimed a "new approach" to monetary regulation, based on neo-conservative concepts. Direct credit restrictions were noted and measures were taken to increase competition in the banking sector. This was accompanied by a sharp increase in the money supply and prices. Since the mid 1970s. there was an increase in the influence of neoconservative concepts on monetary policy: limits were set for the growth of the money supply, a number of measures were taken to stimulate the placement of government debt obligations outside the banking system, financial policy began to be considered primarily from the point of view of its impact on the money supply.
Since coming to power in 1979. conservative government of M. Thatcher, the direction of monetary policy began to be determined by the deviation of the growth rate of the money supply from the established limits. The main method of control of the Bank of England over the growth of the money supply was its operations for the purchase and sale of bills, and mainly commercial, not treasury ones, and the placement of government obligations outside the banking system.
In the 1990s The main instrument of monetary policy in the UK, as in other developed countries, has become open market operations.
Since January 1, 1999 The Bank of England is a member of the European System of Central Banks, which is headed by the European Central Bank, being a member with a special status: it does not have the authority to participate in decision-making on issues of a single monetary policy.
Great Britain uses its own currency and pursues an independent monetary policy.
As part of the conduct of monetary regulation, the German Federal Bank, like other central banks of the world, uses certain methods, among which a special place is occupied by the policy of reserve requirements. The Federal Bank, in accordance with the Law on the Central Bank, may set interest rates on obligations on demand deposits in the amount of no more than 30%, on term deposits no more than 20%, on savings deposits - no more than 10%, and on obligations to foreign institutions the bank may set interest rate up to 100%. The real change in the norms of required reserves is carried out by the Federal Bank if it is necessary to increase or decrease the money supply in the country, however, this can only be carried out in agreement with the European Central Bank and within the framework of the common monetary policy of the EU. In particular, the minimum reserve ratio at the beginning of the third stage of the economic and monetary union was 2.0%. Subsequently, this norm changed within the limits of 2-2.07% (January 2007).
Of no small importance is such an approach as an accounting or discount policy, which is used to pursue a policy of "cheap" and "expensive" money in accordance with the economic situation of the country. For example, in recent years, central bank monetary policy has been aimed at stimulating economic activity by setting low interest rates. Therefore, the policy becomes more aggressive, which led to a reduction in the discount rate in 2009 from 2.75 to 2%. In European countries, the possibility of a decrease in interest was due to the obligation of central banks to strive to achieve the benchmarks set for the growth of domestic consumer prices. In particular, in accordance with paragraph 247 of the Federal Law, such approximate rates were: as of January 1, 2009 -1.97; as of July 1, 2009 - 1.22; January 1, 2010 - 1.14; . -1.13 and as of January 1, 2011 - 1.21%. In this regard, there was an increase in the M3 aggregate by 8.7%, and loans - by 5%. When pursuing an open market policy, the Federal Bank carries out the purchase and sale of government securities.
The Federal Bank also uses in its arsenal such a method of regulation as targeting. Every year, he publishes a target corridor for a year to increase the amount of money. The basis for establishing the amount of money is the assumption of an increase in production potential, the normative development of prices and changes in the velocity of money. Having information about the amount of money, the German economy is provided with benchmarks, within which the bank considers it appropriate, on the one hand, to allow for possible growth, and on the other, to severely limit inflation. At the same time, given that the monetary unit is also in circulation in other EU countries, all this is carried out on the basis of the developments of the European Central Bank.
Turning to the experience of Japanese economists in the field of monetary regulation, it is necessary to note the following points that could be useful for solving our problems in the field of monetary regulation.
Manufacturing corporations in Japan had weak financial capacity in the early post-war decades, so the banking system played a huge role in creating the conditions for accelerated industrial growth in the 50s and 60s.
It should be noted that the main feature of the functioning of the banking system in Japan during almost the entire post-war period was a high degree of government control. Relying on such an instrument as Central Bank loans to the private financial sector on preferential terms, the state bureaucracy actually regulated both interest rates and lending directions, which made it possible to relatively successfully implement state priorities. At the same time, the mechanism of such regulation was based on the extremely high demand for money from the non-financial sector and the constant excess of loans over the amount of funds in bank deposits. Subsequently, the gradual increase in the role of self-financing and, accordingly, the lesser dependence of industrial corporations on bank lending eventually undermined the possibilities of administrative management by the Central Bank and became one of the reasons for the liberalization of the monetary market.
In the past ten years, the main feature of the modern Japanese capital market has been an artificial structure and strict regulation of interest rates. At the same time, the liberalization of interest rates in the last decade was determined not so much by considerations of efficiency as by the need to place a huge number of government bonds on the market and pressure from outside, and long-term loan rates are not quite marketable to this day.
As for the tools of the monetary policy of the Central Bank, such classical means as manipulating the discount rate and reserve ratios, as well as operations on the open securities market in Japan, during several post-war decades, were of very little importance, yielding in this capacity to direct quantitative rationing of credit in conditions of an artificially low level of interest.
Recently, however, the situation has changed somewhat: the easing of tension in the loan capital market, its internationalization, as well as the emergence of alternatives in the form of a growing stock market, to a large extent eliminated the objective economic basis of administrative regulation and forced the Bank of Japan to reconsider its attitude to traditional, classical instruments. . Interest rate flexibility has increased and the discount rate has been raised to market levels. Since 1971, the Bank of Japan began operations in the bill market, and later began active operations with government bonds, switching to an open subscription system for them. Finally, a market for short-term government securities was formed and massive operations began in other short-term capital markets. All this indicates a qualitative change in the model of regulation of the credit and financial sector with an emphasis on indirect methods of such regulation, mediated by the liquid positions of banks, acting as direct subjects of credit expansion.
Consider the specific goals and mechanism of monetary policy. The approach to this policy was based on the idea of selective support - a kind of "artificial selection of enterprises". The initiative in carrying out reforms in this area was taken by the government. And here it actively used the double effect of lowering interest rates: on the one hand, the administrative setting of interest rates at an extremely low level (from 1962 to 1977) artificially exceeded the rate of accumulation, redistributing funds in favor of the banking sector, and on the other hand, the regulation of lending rates and the shortage of loan capital thus created allowed the Central Bank and the government, in essence, to direct it to the largest corporations in the field of heavy industry and export industries. The main thesis of the policy pursued is that neither the Bank of Japan nor the government considered it possible to leave the decision on the direction of the redistribution of funds, and, accordingly, the scarce resources available, to the spontaneous market process. It was precisely the ability of the highest state apparatus to avoid excessive dependence on the momentary interests of initial accumulation and to use all the power of state coercion to comply with the established "rules of the game" that apparently became one of the reasons for the country's rapid and healthy economic recovery in the 50s and 70s. years.
Similar features can be found in the mechanism of control over the money supply by the Bank of Japan. Without relying on indirect control, the Bank resorted to direct intervention in the processes in the bank lending markets, primarily in the short term. "The Bank of Japan directly controlled the formation of the bulk of the money supply. Attempts to influence investment demand through money supply regulators have a limited effect when they lowering interest rates or liberalizing the supply of credit cannot, in and of themselves, stimulate productive investment. In Japan, the high level of investment demand was based on "business confidence in the future of the economy, which determined a high rate of return on capital. Therefore, the policy of lowering the interest rate in the market of credit resources and the rationing of credit had as their main goal the redistribution of funds from the population and small businesses in favor of the largest corporations capable of making effective investments.
2 Analysis of the effectiveness of monetary policy in the Russian Federation at the present stage
2.1 Role, functions and tools of the Central Bank of the Russian Federation
The Central Bank of the Russian Federation (Bank of Russia) is the main bank of the Russian Federation. It was created and operates on the basis of the Federal Law of July 10, 2002 No. 86-FZ “On the Central Bank of the Russian Federation (Bank of Russia)” (as amended on 10.01.0E) [SZ RF. 2002. No. 28. Art. 2790; 2003. No. 2. Art. 157.], his property is federal property. The Bank of Russia exercises the authority to own, use and dispose of its property, including its gold and foreign exchange reserves.
The development of monetary policy by the Bank of Russia is carried out in accordance with Art. 45 of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)". The Bank of Russia annually no later than August 26 submits to the State Duma a draft of the main directions of the unified state monetary policy for the coming year and no later than December 1 - the main directions of the unified state monetary policy for the coming year. The project is preliminary presented to the President and the Government of Russia.
The Central Bank is vested with the right to monopoly issue banknotes, regulate money circulation and the exchange rate, and store gold and foreign exchange reserves. The most important function of the Central Bank is the development of a common monetary policy. Its strategic task is to create conditions for non-inflationary development of the economy /
The Bank of Russia has three main objectives of its activities, enshrined in the Law "On the Central Bank of the Russian Federation (Bank of Russia)":
1) protection and stability of the ruble;
2) development and strengthening of the banking system of the Russian Federation;
3) ensuring the efficient and uninterrupted functioning of the payment system.
The Central Bank of the Russian Federation performs the following functions:
In cooperation with the Government of the Russian Federation develops and implements a unified state monetary policy;
Monopoly issues cash and organizes cash circulation;
Is a lender of last resort for credit institutions, organizes a system of their refinancing;
Establishes the rules for making settlements in Russia;
Establishes the rules for conducting banking operations;
Maintains accounts of budgets of all levels of the budget system of the Russian Federation by carrying out settlements on behalf of authorized
executive authorities and state non-budgetary funds, which are responsible for organizing the execution and execution of budgets;
Carries out effective management of gold and foreign exchange reserves of the Bank of Russia;
Decides on the state registration of credit institutions, issues licenses to credit institutions to carry out banking operations, suspends their operation and revokes them;
Supervises the activities of credit institutions and banking groups;
Registers the issue of securities by credit institutions;
Carries out all types of banking operations and other transactions necessary to perform the functions of the Bank of Russia;
Organizes and implements currency regulation and currency control in accordance with the legislation of the Russian Federation;
Determines the procedure for making settlements with international organizations, foreign states, as well as with legal entities and individuals;
Establishes accounting and reporting rules for the banking system
Establishes the procedure and conditions for the implementation by currency exchanges of activities to organize the conduct of operations for the purchase and sale of foreign currency;
It analyzes and forecasts the state of the Russian economy, publishes materials and statistical data.
The Central Bank of the Russian Federation is a single centralized system with a vertical management structure. The system includes: the central office, territorial offices, settlement
cash centers, computer centers, field institutions and educational institutions, vaults, as well as other enterprises, institutions and organizations, including security units, necessary for the successful operation of the bank. The structure of the Central Bank of the Russian Federation is clearly shown in Figure 2.
Figure 2 - Scheme of the structure of the Central Bank of Russia
The national banks of the republics that are part of the Russian Federation are territorial institutions of the Bank of Russia. They do not have the status of a legal entity and do not have the right to make decisions of a regulatory nature, as well as issue guarantees and sureties, promissory notes and other obligations without the permission of the Board of Directors of the Bank of Russia.
The tasks and functions of the territorial institutions of the Bank of Russia are determined by the Regulations on these institutions approved by the Board of Directors. Currently, the Central Bank of the Russian Federation is considering the possibility that they can be created in economic regions that unite the territories of several constituent entities of the Russian Federation. According to the Regulations of the Bank of Russia, "a territorial institution of the Central Bank of the Russian Federation (TU) is a separate subdivision of the Central Bank of the Russian Federation, which performs part of its functions in the territory of a constituent entity of the Russian Federation."
The territorial institutions of the Bank of Russia are its main departments in the territories, regions and autonomous districts of the Russian Federation, the cities of Moscow and St. Petersburg, the National Banks of the republics within the Russian Federation. The territorial institutions of the Bank of Russia do not have the status of a legal entity. By decision of the Board of Directors of the Bank
In Russia, territorial institutions can be created for economic regions that unite the territories of several constituent entities of the Russian Federation.
The supreme body of the Bank of Russia is the Board of Directors. This is a collegial body that determines the main areas of activity of the Bank of Russia and manages it. The Board of Directors includes the Chairman of the Bank of Russia and 12 members of the Board.
Members of the Board of Directors work here on a permanent basis. They are approved by the State Duma on the proposal of the Chairman of the Bank, who is also the Chairman of the Board of Directors.
The Board of Directors, in cooperation with the Government, develops a unified state monetary policy and ensures its implementation.
The structure and staffing of the central office of the Bank of Russia, as well as the charters of its other structural divisions, are approved by this Council. The Board of Directors not only heads and organizes the work of the Bank of Russia, but also regulates the activities of the country's commercial banks.
Along with it, the National Banking Council functions outside the bank. It includes representatives of the President, representatives of the highest bodies of legislative and executive power, and experts. The total number of the council does not exceed 15 people. Council members are approved by the State Duma on the proposal of the Chairman of the Bank of Russia.
The functional structure implies the existence in the bank of separate divisions (departments, departments) that implement the functions of the bank in accordance with the division of its activities into separate parts. If the volume of tasks solved by these departments is large enough, then additional, smaller structural units - departments - can be created inside them. This functional structure is presented in Appendix A.
For the normal functioning of the monetary system, the Central Bank of the Russian Federation uses the following tools and methods of monetary policy:
Interest rates on Bank of Russia operations;
Required reserve ratios deposited with the Bank of the Russian Federation (reserve requirements);
Open market operations;
Bank refinancing;
Currency regulation;
Cash management;
Direct quantitative restrictions;
Issue of own securities.
2.2 Characteristics of the monetary policy of the Bank of Russia, carried out in 2008 - 2009
The form of monetary emission of the Bank of Russia - foreign exchange interventions - is closely tied to the foreign currency entering Russia. The recipients of such "emission" non-cash rubles are mainly large resident exporters who are obliged to sell part of their foreign exchange earnings, who become owners of excess amounts of money in rubles. Such resident organizations and lending institutions servicing them experience certain difficulties in placing on the monetary market or reinvesting their free ruble resources. With the mechanism of monetary regulation that has developed in Russia, they cannot receive the necessary funds for a period sufficient to carry out the investment process. The rubles emitted by the Bank of Russia in the process of foreign exchange interventions do not reach them, and the imperfection of the banking system, distrust between credit institutions and small enterprises, the high cost of bank loans do not allow them to acquire the necessary credit funds in the banking services market.
As a result of the low capitalization of the banking system, reliance on self-financing, and insufficient development of the corporate bond market, there was no active use of national savings. Therefore, both public and private savings went abroad, including in the form of accumulated state reserves, which were subsequently borrowed to invest in Russian companies. Those. due to the fact that the domestic interbank market was focused on external refinancing (the share of loans from non-resident banks exceeded 70% of the total volume of loans received by banks from other credit institutions), the almost complete suspension of foreign loans to Russian banks as a result of the global financial crisis negatively affected the functioning of the entire money market.
As a result, a low level of confidence in the ruble was formed due to a decrease in the inflow of foreign currency into the country and a significant, comparable to our reserves, level of external corporate debt of companies and banks, which, according to the Central Bank of the Russian Federation as of 01.10.2008, amounted to. about $388.9 billion in foreign currency and the equivalent of $108.7 billion in rubles. In the 4th quarter of 2008 Russian companies and banks had to return to non-residents on previously taken loans about 47.5 billion dollars (42.5 - debt, 5 - percent), but in 2009. - already 115.7 billion dollars (100.1 - debt, 15.6 - interest). Therefore, the money that in the fall of 2009. were allocated to support the banking system, largely ended up in the foreign exchange market, not reaching the economy, reducing the country's reserves. (The gold and foreign exchange reserves of the Russian Federation for the period from 08/01/2008 to 10/24/2008, i.e. for almost 3 months, decreased by 18.6% - 111.2 billion dollars (from 595.9 to 484.7 billion dollars) .
However, in general, the level of monetization of the Russian economy is low (about 40%). Therefore, the main problem, and, in fact, the cause of the crisis is the shortage of rubles. At the same time, one of the most important economic parameters is the volume and dynamics of the money supply (M2), which represents the volume of cash in circulation (outside banks) and balances in national currency on the accounts of legal entities (except banks) and individuals, which largely determines demand in the economy. As of September 1, 2008, the growth of the M2 money supply just before the development of the crisis amounted to only 9.5% (with benchmarks of 30-35%), with inflation over the same period of 9.7%. By the beginning of September, the real volume of the money supply practically did not increase. As of September 1, 2008, M2 amounted to 14,530.1 billion rubles, and its growth in September as of October 1, 2008, under the influence of capital outflow, became negative - 1.1%, amounting to 8.3% since the beginning of the year (M2 as of October 1, 2008). .2008 - 14,374.6 billion rubles).
Table 1 - Money supply in 2009 (billion rubles)
According to Table 1, during 2009, the money supply was declining for almost the entire period compared to the beginning of the year, and the growth for the year was 16.3%.
At the same time, as can be seen from Table 2 and the diagram built on its basis (Figure 3), until 2008. there was a constant increase in the money supply. In 2000
2008 the seasonal growth of the M2 aggregate averaged about 19.7%, and also about 44% per year. Therefore, the reason for the reduction in the money supply during the period
The crisis was caused by the chosen direction of monetary regulation and, to a large extent, “savings” of budget expenditures in order to combat inflation. At the same time, the experience of 7 years of economic growth showed the absence of a direct dependence of consumer price growth on the rate of increase in the money supply (M2) (as well as the opposite trend) and that the growth of the money supply with an increase in the degree of monetization contributed, along with the strengthening of the ruble, to a decrease in inflation.
Table 2 - Main parameters of the monetary policy and economy of the Russian Federation in 2000
Figure 3 - Dynamics of money supply and inflation in 2000-2008
As can be seen from Table 2 and the diagram built on its basis (Figure
3), until 2008 there was a constant growth in the money supply. In 2000-2008 the seasonal growth of the M2 aggregate averaged about 19.7%, and also about 44% per year. Therefore, the reason for the reduction in the money supply during the crisis was the chosen direction of monetary regulation and, to a large extent, the "savings" of budget expenditures in order to combat inflation. At the same time, the experience of 7 years of economic growth showed the absence of a direct dependence of consumer price growth on the rate of increase in the money supply (M2) (as well as the opposite trend) and that the growth of the money supply with an increase in the degree of monetization contributed, along with the strengthening of the ruble, to a decrease in inflation.
In addition, one of the weaknesses of the Russian monetary system is the revaluation of the ruble against other currencies, including dollars (the “currency band” problem). Due to the serious revaluation of the ruble in the face of falling oil prices and a reduction in the inflow of foreign exchange earnings into the country, it became necessary to go for a significant weakening of the ruble against foreign currencies. This weakening caused a trend towards dollarization of the country, partial abandonment of the ruble due to its depreciation in calculations, and other undesirable phenomena. Over the past 4 months of the crisis, the population has acquired 70 billion dollars, and 1/4 of deposits in banks have become foreign currency. Attempts to contain such a depreciation of the ruble led to the cost of large amounts of gold and foreign exchange reserves. Therefore, it is necessary to gradually and carefully bring the ruble to the market exchange rate and avoid strong distortions in the future.
The most important problem of the Russian financial system is its small scale. The ratio of banking system assets to GDP as of 01.01.2008 is about 61%, while in developed countries it is over 100%. The banking system is not sufficiently developed, the reasons for this are the personal poverty of a significant part of the population (about 30-40%), which contributes to a decrease in savings, as well as enormous regional development disproportions, in which about 60% of all financial resources are concentrated in Moscow. A significant reason for the backwardness of the economy and financial markets is the lack of market capitalization of a significant amount of the country's resources, which creates the need to develop the country's financial infrastructure, send money to the most backward regions, increase the money supply and government spending adequately to economic growth, lend against assets, create effective mechanisms for refinancing banking systems .
Based on the foregoing, we can conclude that a serious reason that gives rise to problems in the monetary sphere of Russia is the lack of high-quality legal norms that establish an interconnected system of institutions that form a single agreed mechanism for regulating monetary relations, delimiting their competence, determining the order of interaction and distribution of responsibility between them.
Let us consider in more detail the directions of monetary policy during the financial crisis and the measures to overcome it.
At the beginning of the financial crisis in 2008, the monetary policy of the Bank of Russia as a whole was characterized by a lack of consistency and clarity of methodological approaches. This was expressed in a vague definition of the main objectives of the interest rate policy, the lack of development of a methodology for assessing the demand for money and conceptual approaches to the formation of the money supply, inefficient management of gold and foreign exchange reserves, the absence of systemic measures to form an international financial center on the Russian territory, insufficient policy coherence with the state of the financial market and banking sector. In particular, when developing the main directions of monetary policy, the Bank of Russia does not determine its objects and features of the transmission mechanism.
During the period when Russia entered the global recession, the Bank of Russia, in cooperation with the Government, developed various measures taken to ensure the stability of the financial system, which can be divided into two groups: interest rate policy and other measures.
The activation of the interest rate policy was one of the first measures taken by the Bank of Russia in response to the changed conditions for the development of the economy and the high level of inflation. Interest rate policy of the Central Bank of the Russian Federation in 2008-2009. can be divided into two stages. At the first stage, the Bank of Russia raised the refinancing rate six times. At the same time, prior to the first rate increase during the crisis, the Central Bank of the Russian Federation lowered rates on a number of instruments for providing liquidity to credit institutions, without changing the refinancing rate. This measure was designed to facilitate banks' access to liquid resources. As a result of the increases, the refinancing rate increased from 11% to 13% per annum, and the rates on CBR loans to commercial banks increased by a comparable amount. The main reason for the increase in interest rates was the desire of the Central Bank of the Russian Federation to increase the cost of resources attracted from it by credit institutions and then invested in foreign exchange assets.
As the situation on the financial markets stabilized, the Bank of Russia began to gradually ease its monetary policy. In April-December 2009, the RF Central Bank reduced interest rates seven times. During this period, the refinancing rate was reduced from 13 to 8.75% per annum (see Table 3, Figure 2), and the rates on Bank of Russia operations - by 3.5-4.5 percentage points. However, as the Bank of Russia itself admits, its interest rate policy does not yet have a decisive impact on the structure of market rates, and, consequently, on the real terms of borrowing in the Russian economy, which is due to the presence of excessive and diverse rates on transactions with banks and the absence of clearly defined benchmarks. in interest rate policy
Table 3 shows the refinancing rates of the Central Bank for different periods of time.
Table 3 - Dynamics of the refinancing rate of the Central Bank of Russia
|
Validity |
Refinancing rate, % |
Figure 4 - Dynamics of the refinancing rate of the Central Bank of Russia
With the help of the instrument of reserve requirements, the Bank of Russia gave a quick response to the need to expand the money supply. In conditions when bank liquidity had to be quickly adjusted, and the financial market did not allow it, reserve requirements proved to be especially useful. To this end, the Bank of Russia has decided to temporarily reduce from September 18, 2008 reserve requirements by 4 percentage points for each category of reserve liabilities. From October 15, 2008, reserve requirements amounted to 0.5% for all types of liabilities with their subsequent increase starting from May 1, 2009 to 1%, from June 1, 2009 to 1.5%, from July 1, 2009. up to 2%, from August 1, 2009 to 2.5%.
Changes in the conditions for the implementation of monetary policy determined the need for the Bank of Russia to increase the priority of achieving the goal of maintaining banking stability through open market operations. On September 18, 2008, the Bank of Russia lowered fixed interest rates on its 1-day liquidity provision operations (direct REPO, "currency swap", Lombard loans) from 9% to 8% per annum, and the minimum interest rate on Lombard credit auctions for a period of 2 weeks has been changed from 8 to 7.5% per annum. Interest rates on loans from the Bank of Russia secured by non-marketable assets or guarantees were also reduced: for up to 30 days - from 10 to 9.5% per annum, for up to 90 days - from 8 to 7.5% per annum, for a period of 91 up to 180 days - from 9 to 8.5% per annum.
In addition, the Bank of Russia softened the conditions for receiving funds using certain types of collateral: abolished 1.25% discounts on direct REPO operations with OFZ and OBR, increased the values of the Bank of Russia adjustment coefficients used to calculate the value of Bank of Russia bonds, as well as the adjustment coefficients of the Bank of Russia used to calculate the value of collateral for Bank of Russia loans secured by non-marketable assets and guarantees from credit institutions were increased by 0.2.
In order to reduce the volatility of short-term interbank lending rates, since September 2008, the Bank of Russia began to set a limit on the amount of funds placed at the first direct REPO auction. In order to restore the efficiency of the bond market and provide additional liquidity to credit institutions in October 2008, direct REPO operations were restored for a period of three months without setting the lower and upper limits of the discount, which implies the absence of pre-compensatory contributions.
However, it was not possible to keep the rates in the indicated sizes for a long time. On February 9, 2009, in order to take additional measures to contain inflationary trends and ensure the stability of the ruble exchange rate, the Bank of Russia decided to raise interest rates on lending operations and direct REPO transactions.
For direct REPO operations (at fixed interest rates)
for a period of 1 day - 11% per annum, for a period of 7 days - 11% per annum;
The minimum interest rate on Lombard loan auctions for a period of two weeks is 9.5% per annum;
For loans secured by non-marketable assets or guarantees for up to 90 calendar days - in the amount of 11% per annum, for a period of 91 to 180 calendar days - in the amount of 11.5% per annum.
Despite the active use of the refinancing instrument, the use of its types provided for by law in the crisis phase turned out to be insufficient, and therefore on October 20, 2008 the Central Bank tested a new tool to support the financial system - providing unsecured loans to Russian credit organizations for a period of not more than six months, and from December 30, 2008 for a period not exceeding one year. According to experts, this kind of refinancing was urgently needed by credit institutions to combat the liquidity crisis. According to a review of the banking sector, in the worst month of 2008 - October - credit institutions had to borrow from the Central Bank an unprecedentedly large amount - 1.2 trillion. rubles, which in terms of volume corresponds to about a third of the equity capital of all Russian banks. These borrowings allowed credit institutions to compensate for losses incurred due to the revaluation of the securities portfolio and the outflow of deposits, as well as the costs of issuing loans.
Given the active withdrawal of funds by investors from Russian assets and the associated increase in demand for foreign currency, the actions of the Bank of Russia were aimed at preventing an excessive weakening of the ruble and maintaining the value of the dual-currency basket. In this regard, in August-December 2008 the Bank of Russia carried out sales of foreign currency on the domestic market. As a result, the volume of international reserves dropped sharply and their total volume as of January 1, 2009 fell to $427.1 billion. Many experts assessed the spending of international reserves to support the ruble as an "inadequate policy." However, this policy continued until January 2009 in order to avoid sharp fluctuations in the ruble exchange rate. In order to avoid devaluation, on January 23, 2009, the upper limit of the currency band for the value of the dual-currency basket was set at 41 rubles. The results of the devaluation became noticeable already in the first quarter of 2009. Since the beginning of February, the Bank of Russia has not sold foreign currency on the foreign exchange market. Moreover, in order to prevent strong fluctuations in the exchange rate on certain days, he had to buy foreign currency. Thus, according to the data in Table 4 and Figure 5, the value of foreign currency by 2009 for seven years (since 2003) reached its maximum value: 30.24 per dollar and 43.39 per euro (at the end of the year) .
Table 4 - Dynamics of foreign exchange rates against the ruble for the period 2000-2009
Figure 5 - Dynamics of official foreign exchange rates against the ruble in 2000-2009
Such an instrument of monetary regulation as the establishment of benchmarks for the growth of the money supply manifested itself during the crisis in the following. The processes of transformation of ruble savings into foreign exchange assets, the decline in the money supply, which affect the dynamics of budget revenues, which are the source of the formation of the reserve fund and the national welfare fund, determined the need to clarify the net credit to the general government before the end of 2008. Other indicators of the monetary program (including net credit to banks and other net unclassified assets), taking into account the measures taken by the Government of the Russian Federation and the Bank of Russia to support the financial sector.
In addition, the Bank of Russia issued bonds on its own behalf. In September 2008, a new OBR issue was placed, however, due to the fact that during the indicated period credit institutions began to experience a lack of liquidity, the volume of OBR placements at the auction was two times lower than the volume of purchases by the Bank of Russia of its bonds in the secondary market. In October 2008, the debt of the Bank of Russia to credit institutions practically did not change. Only the auction held on October 2 was recognized as successful, with the placed volume of only about 10 million rubles. at a weighted average rate of 6.3% per annum. In November 2008-February 2009, the instruments of the Bank of Russia for absorbing liquidity also remained of little demand.
As a result of the measures discussed above, the situation in the banking sector has stabilized: it has been possible to avoid the bankruptcy of many banks, to stop the outflow of household deposits, and to continue lending to the economy. The outflow of household deposits from banks peaked in October (then it amounted to 6% and practically stopped in November). In December, the inflow of funds from the population into deposits resumed. The liquidity situation has normalized.
Thus, the package of anti-crisis measures implemented by the Bank of Russia at the height of the crisis, as a whole, corresponded to the standard scheme of foreign authors, but was to a certain extent inconsistent. In general, it was possible to prevent the spread of "banking panic" and partially restore the confidence of economic entities in the national banking system. Among the stabilization anti-crisis measures, it is necessary to single out: strengthening the resource base of banks and saturating the banking system with additional liquidity, increasing the capital of systemically important banks, increasing to 700 thousand rubles. the state guarantee of the safety of deposits of individuals, the decision to prevent the bankruptcy of banks through reorganization, mergers and other measures, the implementation of a “smooth” devaluation of the national currency, permission not to temporarily revalue bank assets at the current market value, strengthening the protection of the legal rights of creditors.
2.3 Monetary policy in 2010-2011
In 2010-2011 The Bank of Russia pursued its monetary policy based on the need to create favorable conditions for the long-term economic development of the country. The low level of inflation and the stability of the national currency were the basis for making effective decisions in the field of savings, investments and consumer spending - the basics for sustainable economic growth. Therefore, the main goal
the unified state monetary policy pursued by the Bank of Russia jointly with the Government of the Russian Federation for this period was a steady decline in inflation and maintaining it at a low level, while it was supposed to reduce inflation to 8.7-9.2% in 2010 and 78 .5% in 2011.
To achieve its goals, the Central Bank of the Russian Federation used all the monetary policy instruments available to it, which made it possible to quickly respond to changes in the intensity and direction of financial flows within the framework of the monetary policy goals.
The system of monetary policy instruments was supposed to ensure the stability of the money market and, at the same time, encourage credit institutions to manage their own liquidity more efficiently.
If banks needed additional liquidity, they could use the set of instruments offered by the Bank of Russia for these purposes. During the day, these could be secured intraday loans provided by the Bank of Russia without charging a fee, as well as auctions of one-day direct REPO held in the morning and afternoon. In addition, on a weekly basis, the Bank of Russia carried out operations to provide liquidity to banks for longer periods. At the end of the trading day, credit institutions had access to standing instruments of the Bank of Russia - overnight loans and FX swaps, the interest rates for which were set at the level of the refinancing rate.
The Central Bank of Russia regulated refinancing rates taking into account the real state of the economy, inflation dynamics, the situation in various segments of the money market and was focused on consolidating the emerging positive trends.
Since the beginning of 2010, the Bank of Russia has twice decided to reduce the refinancing rate on January 15, 2010 from 16% to 14% per annum, and on June 15, 2010, from 14 to 13% per annum. Its next decrease occurred only at the end of December 2011 - it was lowered to 12%.
When managing liquidity, in Q2 2011 credit institutions actively used the mechanism of intraday lending and overnight loans of the Bank of Russia, the largest volume of which fell on April 2011. In general, the volume of intraday loans provided by the Bank of Russia increased from 2.3 trillion. rub. in the first quarter of 2011 to 2.6 trillion. rub. in the II quarter, and overnight loans - from 5.9 to 14.3 billion rubles. respectively. At the end of each calendar month, there was a traditional increase in demand for intraday loans from credit institutions and the volume of "overnight" loans provided.
Against the backdrop of a downward trend in inflation dynamics, from 06/26/2010 the Bank of Russia reduced the refinancing rate and interest rates on overnight loans and FX swap transactions from 12 to 11.5% per annum, and from 23 October - to 11%. However, the refinancing rate in the period 2010-2011 did not have a significant impact on monetary indicators, primarily due to the fact that, in conditions of excess liquidity, commercial banks did not experience a significant need for borrowing from the Central Bank.
In 2010, the decision of the Bank of Russia to reduce the required reserve ratios, which were adopted in order to gradually level out competitive conditions for Russian and foreign credit institutions, played a major role in resolving the problem of shortage of ruble liquidity in the money market in 2010.
On July 8, 2010, the required reserves ratio for deposits of individuals in the currency of the Russian Federation was reduced from 7% to 3.5%, as a result of which the amount of released funds amounted to more than 150 billion rubles. In addition, since July 1, 2010, the Central Bank of the Russian Federation granted the right to average the required reserves to credit institutions within the averaging ratio of 0.2 established by the Board of Directors of the Bank of Russia. The use of this mechanism also contributed to the increase in the liquidity of credit institutions.
The required reserves ratio for liabilities to individuals in the currency of the Russian Federation and the required reserves ratio for other liabilities of credit institutions in the currency of the Russian Federation and liabilities in foreign currency did not change in 2011. During this period, credit institutions actively used the averaging of required reserves, that is, they fulfilled a part of the required reserves by maintaining the corresponding average monthly balance of funds on the correspondent account and correspondent sub-accounts of the credit institution with the Bank of Russia. The number of credit institutions that were granted the right to average the required reserves constantly increased and in June 2011 reached 681 (or 55.2% of the total number of operating credit institutions).
Central Bank of the Russian Federation in the period from 2010-2011. gradually reduced the norm of mandatory requirements for credit institutions so that they began to lend more extensively to the real sector of the economy and, above all, to the manufacturing sector. However, commercial organizations were not particularly eager to lend to the domestic industry due to the high risk and complexity of assessing the economic situation. Thus, the reservation itself is an ineffective instrument of monetary policy, since there is little that adds to the existing persistent reluctance of banks to funnel money into the economy.
In 2010, the situation on the domestic foreign exchange market was formed under the influence of an increase in the supply of foreign currency from exporters as a result of the continuing rise in oil prices, as well as an increase in the investment attractiveness of ruble assets against the backdrop of a weakening US dollar on the world market. In this situation, the Bank of Russia sought to maintain the balance of supply and demand in the domestic
foreign exchange market, carrying out large-scale purchases of foreign currency during periods of increased upward pressure on the ruble exchange rate. Based on the results for the Russian Federation on foreign currencies, from February 1, 2010, the Bank of Russia switched to using as a new operational benchmark the cost of a dual-currency basket denominated in rubles, consisting of US dollars and euros in proportions established by the Bank of Russia. At the same time, the formation of the US dollar exchange rate against the ruble in the domestic foreign exchange market during the day and a period of several days acquired a freer character, and operations to limit intraday and short-term fluctuations in the US dollar exchange rate against the ruble were carried out by the Bank of Russia based on the boundaries of fluctuations in the value of the dual-currency basket. Since August 1, the bi-currency basket consisted of 0.35 euros and 0.65 dollars. USA. Over 10 months, the volume of purchases of foreign currency by the Bank of Russia amounted to more than 11 billion dollars.
In July-September 2010, the Bank of Russia carried out both the sale of government bonds from its own portfolio and the purchase of government securities. In general, the volume of net sales of government securities by the Bank of Russia for the third quarter remained at the level of the previous quarter (2.6 billion rubles) .
In the first half of 2011 The Central Bank of the Russian Federation continued to conduct monetary policy within the framework of the managed floating ruble exchange rate regime.
In order to keep the volatility of the ruble exchange rate against foreign currencies significant for the Russian Federation at a relatively low level, in 2011 the Bank of Russia continues to use the ruble value of the basket of euros and US dollars as an operational benchmark.
In 2011, the ratio of supply and demand in the domestic foreign exchange market was determined by the high current account surplus of the balance of payments, due to the inflow of significant additional export earnings into the Russian economy due to the favorable external economic situation, as well as cross-border capital flows. Under these conditions, the operations of the Bank of Russia in the domestic foreign exchange market were mainly aimed at preventing an excessive increase in the effective exchange rate of the ruble under the influence of an excess supply of foreign currency. The result of these transactions was a net purchase of foreign currency. In particular, in January-September 2011. The Bank of Russia acted as a net buyer of foreign currency.
The growth rate of deposits in foreign currency (in dollar terms) in the first half of 2011 amounted to 10.2%, which is two times lower than the growth rate of deposits in the national currency.
The dynamics of net foreign assets of the banking system was an important source of the increase in the money supply, taking into account deposits in foreign currency. With an increase in the total volume of this monetary aggregate by 1083.7 billion rubles. net foreign assets increased by 1,366.8 billion rubles, while domestic credit to the economy decreased by 204.6 billion rubles. (in 2010 - an increase of 717.2 and 1169.7 billion rubles and a reduction of 857.9 billion rubles, respectively).
For the period 2010-2011. The increase in the nominal effective exchange rate of the ruble played a significant role in reducing inflation. Last year, the nominal effective exchange rate appreciated by 3.2%. In the first five months of this year, it increased by another 1.5%. In early June, the Bank of Russia raised the ruble exchange rate against the dual-currency basket by about 0.6% more.
In order to absorb free liquidity, the Bank of Russia continued to carry out operations with its bonds in the quarter of 2011.
OBR was sold mainly at auctions. The largest investments in OBR (80.2 billion rubles) were made by credit institutions at the auction on June 15 (after the buyout of the third OBR issue under the offer), while the total volume of OBR sales at auctions in April-June 2011 amounted to 108.2 billion . rub. at market value. The weighted average yield formed at OBR auctions in April-June 2011 ranged from 4.53 to 5.20% per annum (in Q1 - from 4.60 to 5.14% per annum). According to daily quotations issued by the Bank of Russia, the volumes of purchases by OBR credit institutions in the secondary market significantly exceeded the volumes of their sales.
In 2011, the Bank of Russia also sold government bonds from its own portfolio without an obligation to repurchase in the amount of 0.43 billion rubles.
In general, from 2010-2011. the operations of the Central Bank of the Russian Federation on the open market contributed to a gradual increase in the liquidity of the OBR market and, as a result, to the expansion of the sterilization capabilities of the Bank of Russia.
The monetary policy pursued by the Central Bank of the Russian Federation in the period from 2010-2011 turned out to be relatively ineffective in its goal, which is clearly seen from Table 5.
Table 5 - Forecast and actual inflation indicators for 2010-2011
It should be noted that since 2010, the banking system has been receiving funds mainly through foreign exchange interventions, but their inflow was so large that the Central Bank had to sterilize part of these receipts, and mainly through operations on the open market.
In general, speaking about the effectiveness of monetary policy in Russia in the period from 2008-2011, we can say that it still remains at a low level, since the declared targets do not coincide with the actual results, but there are prospects.
3 Prospects for development and measures to improve the monetary policy of the Russian Federation
3.1 Macroeconomic scenarios, goals and instruments for 2013 and the period of 2014 and 2015
As part of the forecasts of the IMF and other international organizations, which assume a slight increase in global economic growth in 2013, a moderate acceleration of economic growth in the countries that are Russia's main trading partners is possible, with a similar trend continuing in 2014-2015. According to the IMF forecast, the growth rate of production of goods and services in the world will increase from 3.5% in 2012 to 3.9% in 2013. According to forecasts, in 2013 inflation will continue to decline in foreign countries, including Russia's main trading partners. Its acceleration is not expected in 2014-2015 either.
The projected increase in business activity in the world will support the current level of consumption of oil and other Russian exports, which will mitigate the risks of deterioration in the country's balance of payments.
Key interest rates in the leading economies will remain low in 2013, which will help create conditions for capital inflow into the Russian economy. The movement of cross-border capital flows will depend on the state of foreign financial systems and the conjuncture of the global financial market, the mood of global investors. Risks of capital outflow will remain.
The Bank of Russia considered three options for the conditions for conducting monetary policy in 2013-2015, one of which is in line with the forecast of the Government of the Russian Federation. The scenarios are based on different dynamics of oil prices.
Under the first option, the Bank of Russia assumes a reduction in 2013 of the average annual price for Russian Urals oil on the world market to USD 73 per barrel. This is shown in Figure 6.
Figure 6 - Urals oil price (US dollars per barrel)
Under these conditions, in 2013 the real disposable money income of the population may decrease by 0.4%, investments in fixed assets - by 2.1%. The decline in GDP may be 0.4%.
The second option considers the forecast of the Government of the Russian Federation, which is the basis for developing the parameters of the federal budget for 2013-2015. It is assumed that in 2013 the price of Russian oil may reach $97 per barrel.
This option reflects the development of the economy in the context of the implementation of an active state policy aimed at improving the investment climate, increasing competitiveness and business efficiency, stimulating economic growth and modernization, as well as increasing the efficiency of budget spending. According to this variant, in 2013 the increase in real disposable money income of the population is projected at the level of 3.7%. The volume of investments in fixed assets may increase by 7.2%. Under these conditions, the volume of GDP may increase by 3.7%.
Under the third option, the Bank of Russia assumes an increase in the price of Urals oil in 2013 to $121 per barrel.
In the context of increasing income from the export of Russian goods in 2013, an increase in investment activity is expected. The growth rate of investment in fixed assets may accelerate to 7.6%, and real disposable money income of the population - up to 4%. The increase in GDP is expected at the level of 4%.
In 2014-2015, the increase in GDP, depending on the forecast option, may be 2-5%.
The forecast of the balance of payments shown in the figure for 2013-2015 according to the second option is based on the assumption of an insignificant change in the price of Urals oil on the world market (from 97 to 104 US dollars per barrel). In the first and third options, oil prices are expected to deviate from the specified range by a quarter up and down.
Figure 7 - Forecast of the balance of payments of the Russian Federation for 2013-2015
In accordance with the scenario conditions for the functioning of the economy of the Russian Federation, the Government of the Russian Federation and the Bank of Russia have set the task of reducing inflation in 2013 to 5-6%, in 2014 and 2015
Up to 4-5% (on the basis of December to December of the previous year). The specified target for inflation in the consumer market corresponds to core inflation at the level of 4.7-5.7% in 2013, 3.6-4.6% in 2014 and 2015.
Calculations under the monetary program for 2013-2015 were made on the basis of indicators of demand for money that correspond to inflation targets, the forecast dynamics of GDP and other macroeconomic indicators, as well as the balance of payments forecast and the parameters of the draft federal budget .
Depending on the forecast options, the growth rate of the M2 monetary aggregate in 2013 may be 9-18%, in 2014 and 2015 - 14-19% per year.
The Bank of Russia has developed three variants of the monetary program. The second version of the program is based on macroeconomic indicators used in the formation of the draft federal budget for 2013 and the planned period of 2014-2015. The growth rate of the monetary base in a narrow definition, corresponding to inflation targets and estimates of economic growth dynamics, can reach 7-14% annually in 2013, in 2014-2015, 11-14% in 2014-2015 .
The first version of the program assumes an increase in net credit to the enlarged government by 0.5 trillion. rubles in 2013, by 0.4 trillion. rubles - in 2014, by 0.3 trillion. rubles - in 2015. According to the calculations under the program, if this scenario is implemented in 2013-2015, the increase in net credit to banks may amount to 1.0-1.6 trillion. rubles per year due to the activation of the operations of the Bank of Russia to provide liquidity to the banking sector. Under these conditions, by the end of 2015, the volume of gross credit to banks may exceed 60% of the monetary base.
The second variant of the monetary program assumes moderate dynamics of world oil prices within the forecast period. In 2013, the increase in NIR, corresponding to the indicators of the forecast of the balance of payments, will amount to 0.6 trillion. rubles, in 2014 - 0.5 trillion. rubles, and in 2015 - 0.3 trillion. rubles.
Under the third option of the monetary program, based on the scenario of high oil prices, the projected increase in NIR in 2013 will be 2.9 trillion. rubles, in 2014 - 2.7 trillion. rubles, in 2015 - 2.4 trillion. rubles.
Under this scenario, in 2013 net credit to banks is expected to decrease by 0.2 trillion. rubles.
The main objectives of the exchange rate policy for 2013 and the period of 2014-2015 will be to further reduce the direct intervention of the Bank of Russia in the exchange rate mechanism and create conditions for the transition to a floating exchange rate regime by 2015.
In 2013 and 2014 The Bank of Russia will continue to implement its exchange rate policy without hindering the formation of trends in the dynamics of the ruble exchange rate due to the action of fundamental macroeconomic factors, and without setting any fixed restrictions on the level of the national currency exchange rate. At the same time, during this period, the Bank of Russia will increase exchange rate flexibility gradually, softening the process of market participants' adaptation to exchange rate fluctuations caused by external shocks .
After the transition to a floating exchange rate regime, the Bank of Russia intends to abandon the use of operational benchmarks of the exchange rate policy associated with the levels of the exchange rate. At the same time, even after the transition to this regime, the Bank of Russia admits the possibility of conducting interventions in the domestic foreign exchange market, the volume of which will be determined taking into account the situation on the money market.
The system of instruments will continue to take into account the peculiarities of interaction between the Bank of Russia and regional credit institutions, the characteristics of the monetary policy transmission mechanism, and the state of the Russian financial market.
The basis of the current system of monetary policy instruments - the interest rate corridor of the Bank of Russia will remain in the period under review, while the Bank of Russia will consider the possibility of narrowing it in order to increase the effectiveness of interest rate policy. Deposit operations and standing refinancing operations for a period of 1 day will be used as instruments that ensure that short-term interbank market rates are within the interest band.
The use of refinancing instruments for terms of more than 1 week will be aimed primarily at maintaining financial stability. In order to limit the impact of these operations on the corresponding segment of the market interest rate curve and prevent distortion of interest rate policy signals, the Bank of Russia will consider the advisability of switching to their implementation at a floating rate. In this case, it is not excluded that the system of instruments of the Bank of Russia will be supplemented with swap transactions with foreign currency and precious metals for up to 1 year in order to expand the access of credit institutions to refinancing for these periods.
The Bank of Russia will also continue to use required reserve ratios as an instrument of monetary policy, making decisions to change them depending on the macroeconomic situation and the state of liquidity in the banking sector.
In addition to working to improve its own system of instruments, the Bank of Russia attaches great importance to interaction with government agencies on the implementation of monetary policy and the development of financial markets. Cooperation will continue with the Russian Ministry of Finance and the Federal Treasury on the development of a mechanism for placing temporarily free budget funds in the banking sector, the task of which is to minimize the seasonal impact of budgetary flows on the volume of liquidity in the banking sector.
3.2 Measures to improve Russia's monetary policy
The main goal of monetary policy within the framework of the financial stabilization program is to maintain low current inflation rates and create conditions for the growth of investments, ensuring favorable dynamics of the national currency exchange rate, contributing to the improvement of the balance of payments.
To achieve this goal, the efforts of the monetary authorities should be focused on solving the following tasks:
Limitation of the money supply to the volume necessary for the implementation of economic activity;
Optimization of the structure of the money supply and its distribution between sectors and subjects of the economy;
Preventing the outflow of capital abroad;
Maintaining foreign exchange reserves at a given level.
The solution of these problems requires the implementation of a set of measures listed below. In order to control inflation and maintain the dynamic stability of the national currency, it is necessary to limit the growth rate of the money supply and fluctuations in interest rates on loans and deposits to the economy. Operational regulation of bank liquidity and interbank market rates will ensure the stability of settlements and reduce speculation in the money market. Limiting the growth of the national currency during periods of inflation, direct lending to the state budget deficit, a phased transfer of claims on the government for domestic debt into medium-term government securities and with a positive real interest rate that ensures their yield at the level of government securities should not be allowed.
Short-term lending to the cash gap in state budget revenues and expenditures through the purchase of state short-term securities will create conditions for prompt support of the state budget in market forms, and it is also necessary to set a ceiling for the growth of the money supply and net domestic assets of the Central Bank in order to limit the growth of the money supply - this is a guaranteed restriction inflation rates and the predictability of its change.
It is necessary to set the discount rate of the Central Bank of the Russian Federation at a level not lower than the standard in force in neighboring countries; this, in the end, should lead to a decrease in inflation, an increase in investment activity, and stabilization of production.
Also, the most important tool for improving monetary policy should be the improvement of the system of refinancing commercial banks to stabilize the supply of money to the country's economy. This can be achieved through the following measures:
1) ensuring the creation of a corridor of base refinancing rates for banks on the basis of auction and pawn loans, which will make it possible to move from quantitative to price methods of regulating bank liquidity and reduce rates on loans to the economy;
2) improving the procedure for quickly responding to changes in the volume of bank liquidity and fluctuations in interbank market rates through open market operations will ensure a fine adjustment of the level of interbank market rates in a given corridor of base refinancing rates;
3) streamlining the procedures for providing a standby loan to individual banks experiencing a short-term lack of liquidity will ensure the stability of the banking system during liquidity crises in large banks that have an impact on the economy;
4) limiting the issue of short-term obligations of the Central Bank as the issue of government securities expands, will save public funds for the purpose of regulating the money market (300-400 billion rubles a year). And the last step
improvement should be the improvement of the system of reserve requirements for commercial banks;
5) differentiation of the mandatory reserve systems for bank deposits, aimed at increasing the share of long-term deposits as a resource for increasing investment activity in the country, will increase banking liquidity, stimulate the growth of long-term deposits and reduce the mass of "hot money", increase investment in the economy;
6) the implementation of a phased revision of the mandatory reserve norms towards their reduction as the inflation rate decreases and the demand for credit resources for long-term investments grows, this should result in a balance of business activity and money supply in the economy, increasing the mobility of money supply;
7) creation of a system for monitoring the situation in the money market and the capital market and, on this basis, the implementation of modeling and forecasting of financial flows in conjunction with the processes of the country's macroeconomic development; this contributes to an increase in the efficiency of state regulation of the money market.
In order to achieve the goals that the Central Bank has set for itself for 2013-2015, it is reasonable to use the measures described above.
Conclusion
The main conductor of monetary policy in the Russian Federation is the Bank of Russia, which currently most actively uses four main instruments of monetary policy: regulation of the volume of refinancing of commercial banks, changes in the required reserve ratios, open market operations and foreign exchange interventions. With the help of these tools, the Bank of Russia strives to achieve the main goal of monetary policy - a smooth decline in inflation. The conducted analysis of monetary policy in Russia in the period from 2000-2006. showed an insufficient connection between the policy actually pursued by the Bank of Russia and the goals declared by it in program documents. The deviations of the declared targets from the actual results are too large to speak about the effectiveness of the monetary policy pursued.
The most important way to solve the problem of overcoming inflation in recent years has been the implementation of monetary policy, aimed primarily at limiting aggregate demand by measures designed to limit the possibility of providing loans to commercial banks and thereby have an impact on reducing the volume of effective demand. An active monetary policy has made it possible to achieve certain results in a smooth decline in inflation, although the price of these successes is very high.
This is, first of all, a huge decline in production, one of the reasons for which is a decrease in effective demand. The ongoing monetary policy had an impact only on the sphere of circulation and did not provide for a direct positive impact on the sphere of production.
In this regard, it is necessary to turn to the use of credit as an important lever for the growth of production and supply of goods, which will help reduce inflation.
Insufficient lending activity of Russian banks makes monetary policy instruments ineffective. In this regard, the Bank of Russia needs to start using them, first of all, not to smoothly reduce inflation, but to increase the investment activity of commercial banks. But before that, the Bank of Russia should theoretically study the influence of each instrument on the regulation of the economic situation, and only then begin to use them in practice.
Annex A
(mandatory)
Structural divisions of the Central Bank of the Russian Federation
Currently, the following structural divisions operate in the Central Bank of the Russian Federation:
Consolidated economic department. Department of Research and Information. Department of Cash Circulation
Department for Regulation, Management and Monitoring of the Payment System of the Bank of Russia
Settlement Regulation Department. Accounting and Reporting Department
Department of Licensing Activities and Financial Recovery of Credit Institutions. Department of Banking Supervision. Department of banking regulation. Financial Stability Department. Main inspection of credit institutions. Financial Market Operations Department
Department for ensuring and controlling operations in financial markets. Department of financial monitoring and currency control. Department of balance of payments
Department of Methodology and Organization of Service of Accounts of Budgets of the Budgetary System of the Russian Federation. Legal department. Department of Field Institutions. Department of Information Systems
Department of personnel policy and ensuring work with personnel. Finance Department. Internal Audit Department
Department of International Financial and Economic Relations. Department of External and Public Relations. Administrative department. Central Real Estate Department of the Bank of Russia
Central Department of Expertise and Planning of Capital Expenditures of the Bank of Russia. Main Directorate of Security and Information Protection
List of sources used
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2 Russian Federation. Laws. Federal Law On the Central Bank of the Russian Federation: [Federal Law: adopted by the State Duma on July 10, 2002] // Collected Legislation of the Russian Federation. -2001. N 86-FZ
3 Russian Federation. Laws. On banks and banking activity N 395-1 - FZ of 02.12.1990: feder. Law: [Adopted by State. Duma February 7, 1990: approved. Federation Council 21 1990]. - [Electronic resource]. - Access mode: http: //www. consultant.ru
4 Russian Federation. Laws. Federal Law No. 39-FZ of April 22, 1996 "On the Securities Market" (as amended on December 6, 2007, as amended and supplemented on January 1, 2008) //
