The Central Bank of the Russian Federation (CBR; ),
doing business as
A trade name, trading name, or business name, is a pseudonym used by companies that do not operate under their registered company name. The term for this type of alternative name is a "fictitious" business name. Registering the fictitious name w ...
the Bank of Russia (russian: Банк России}), is the
central bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central b ...
of the
Russian Federation
Russia (, , ), or the Russian Federation, is a transcontinental country spanning Eastern Europe and Northern Asia. It is the largest country in the world, with its internationally recognised territory covering , and encompassing one-eig ...
. The bank was established on July 13, 1990.
The predecessor of the bank can be traced back to the State Bank of the Russian Empire founded in 1860.
The bank is headquartered on
Neglinnaya Street
Neglinnaya Street (Russian: Неглинная улица) is a street inside the Garden Ring of Moscow, Russia. It runs from the Bolshoi Theatre to the Trubnaya Square. The street was paved over the underground Neglinnaya River in 1819. Throu ...
in Moscow. Its functions are described in the
Constitution of Russia
The Constitution of the Russian Federation () was adopted by national referendum on 12 December 1993. Russia's constitution came into force on 25 December 1993, at the moment of its official publication, and abolished the Soviet system of gov ...
(Article 75) and in federal law.
History
State Bank of the Russian Empire
![Госбанк, СПб, ~1905](https://upload.wikimedia.org/wikipedia/commons/d/d2/%D0%93%D0%BE%D1%81%D0%B1%D0%B0%D0%BD%D0%BA%2C_%D0%A1%D0%9F%D0%B1%2C_~1905.jpg)
The decision to create a State Bank of the Russian Empire was made by Emperor
Peter III in May 1762, which was modeled on
Bank of England and would have the right to issue bank notes. However, due to the coup on 28 June 1762 and the murder of the Czar, the project was not implemented. The outbreak in 1768 of the
Russian-Turkish War
The Russo-Turkish wars (or Ottoman–Russian wars) were a series of twelve wars fought between the Russian Empire and the Ottoman Empire between the 16th and 20th centuries. It was one of the longest series of military conflicts in European histor ...
and
deficit of the state budget forced
Catherine II
, en, Catherine Alexeievna Romanova, link=yes
, house =
, father = Christian August, Prince of Anhalt-Zerbst
, mother = Joanna Elisabeth of Holstein-Gottorp
, birth_date =
, birth_name = Princess Sophie of Anha ...
, in turn, refer to the idea of issuing a paper money, and in December 1768 she formed the State Assignation Bank, which existed until 1818 and was replaced by the State Commercial Bank, but the first central banking body in Russia was established on as The State Bank (GosBank) of the Russian Empire (russian: link=no, Государственный банк Российской Империи) which was formed on the base of the
State Commercial Bank by ''
ukaz
In Imperial Russia, a ukase () or ukaz (russian: указ ) was a proclamation of the tsar, government, or a religious leader (patriarch) that had the force of law. "Edict" and "decree" are adequate translations using the terminology and concepts ...
'' of Emperor
Alexander II. This ukaz also ratified the statutes of the bank. According to the statutes, it was a state-owned bank, intended for short-term credit of trade and industry.
In early 1917 the bank had eleven branches, 133 permanent and five temporary offices and 42 agencies. On 7 November 1917 the Russian State Bank was disestablished and replaced by The People's Bank which existed until the establishment of the Soviet
Gosbank
Gosbank (russian: Госбанк, Государственный банк СССР, ''Gosudarstvenny bank SSSR''—the State Bank of the USSR) was the central bank of the Soviet Union and the only bank in the entire country from 1922 to 1991. ...
.
State Bank of the Soviet Union
The Central Bank of the Russian Federation
The Central Bank of the Russian Federation (Bank of Russia) was established 13 July 1990 as a result of the transformation of the Russian Republican Bank of the State Bank of the USSR. It was accountable to the
Supreme Soviet of the RSFSR
The Supreme Soviet of the Russian SFSR (russian: Верховный Совет РСФСР, ''Verkhovny Sovet RSFSR''), later Supreme Soviet of the Russian Federation (russian: Верховный Совет Российской Федерации, ...
. On 2 December 1990, the Supreme Soviet of the RSFSR passed the Law on the Central Bank of the Russian Federation (Bank of Russia), according to which the Bank of Russia has become a
legal entity
In law, a legal person is any person or 'thing' (less ambiguously, any legal entity) that can do the things a human person is usually able to do in law – such as enter into contracts, sue and be sued, own property, and so on. The reason for ...
, the main bank of the RSFSR and was accountable to the Supreme Soviet of the RSFSR. In June 1991, the charter was adopted by the Bank of Russia. On 20 December 1991 the State Bank of the USSR was abolished and all its assets, liabilities and property in the RSFSR were transferred to the Central Bank of the Russian Federation (Bank of Russia), which was then renamed to the Central Bank of the Russian Federation (Bank of Russia). Since 1992, the Bank of Russia began to buy and sell foreign currency on the
foreign exchange market created by it, establish and publish the official exchange rates of
foreign currencies against the ruble.
Role and duties
According to the constitution, it is an independent entity, with the primary responsibility of protecting the stability of the national currency, the
ruble
The ruble (American English) or rouble (Commonwealth English) (; rus, рубль, p=rublʲ) is the currency unit of Belarus and Russia. Historically, it was the currency of the Russian Empire and of the Soviet Union.
, currencies named ''rub ...
.
Before 1 September 2013, it was the main
regulator of the Russian banking industry, responsible for banking
licenses, rules of banking operations and accounting standards, serving as a
lender of last resort
A lender of last resort (LOLR) is the institution in a financial system that acts as the provider of liquidity to a financial institution which finds itself unable to obtain sufficient liquidity in the interbank lending market when other faci ...
for credit organizations. After pointed date functions and powers of CBR were significantly expanded and the central bank received the status of a mega-regulator of all financial markets of Russia.
It holds the exclusive right to issue ruble
banknotes
A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand.
Banknotes were originally issued ...
and
coin
A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order t ...
s through the Moscow and St. Petersburg mints, the
Goznak
Joint Stock Company "Goznak" (short for ''Государственный знак'', or State Insignia) is a Russian joint-stock company responsible for research and development as well as manufacturing security products including banknotes, coin ...
mint
MiNT is Now TOS (MiNT) is a free software alternative operating system kernel for the Atari ST system and its successors. It is a multi-tasking alternative to TOS and MagiC. Together with the free system components fVDI device drivers, XaA ...
. The central bank issues commemorative coins made of precious and non-precious metals as well as investment ones made of precious metals, which are distributed inside and outside the country. In 2010, in honor of its 150th anniversary it issued a 5-kilo commemorative gold coin
Alexander II.
Under Russian law, half of the bank's profit must be channeled into the
government's federal budget. The Central Bank of Russia is a member of the
BIS.
The Bank of Russia owns a 57.58% stake in
Sberbank
PJSC Sberbank (russian: Сбербанк, initially a contraction of russian: сберегательный банк, translit=sberegatelnyy bank, lit=savings bank, link=no) is a Russian majority state-owned banking and financial services compa ...
, the country's leading
commercial bank
A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit.
It can also refer to a bank, or a division of a large bank, which deals with co ...
.
The Bank of Russia owns as well 100% stake in
Russian National Reinsurance Company
Russian National Reinsurance Company (RNRC) is the largest Russian reinsurance company. Central Bank of Russia is a full shareholder of RNRC. The state-owned reinsurance company was set up in 2016. RNRC is No 1 in terms of the authorized share c ...
(RNRC), biggest national reinsurance company. RNRC was established in July 2016 for prevention possible problems with abroad
reinsurance of large
risk
In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environm ...
s under
International sanctions during the Ukrainian crisis
International sanctions have been imposed against Russia and Crimea during the Russo-Ukrainian War by a large number of countries, including the United States, Canada, the European Union, and international organisations following the Russi ...
, like constructing the
Crimean Bridge
The Crimean Bridge ( rus, Крымский мост, r=Krymskiy most, p=ˈkrɨmskʲij most), also called Kerch Strait Bridge or Kerch Bridge, is a pair of parallel bridges, one for a four-lane road and one for a double-track railway, spanning t ...
.
Anti-fraud activities
A key prospective witness in improper financial affairs was Lyubov Tarasova (russian: Любовь Тарасова) who was a senior auditor for the Central Bank of Russia and worked for the "Unicom" (russian: "Юникон") auditing firm which had been established on 20 August 1991 and was responsible for "checking the correctness of the documentation and the essence of business transactions that are in doubt" (russian: "проверка правильности документального оформления и сущности хозяйственных операций, вызывающих сомнение"), but was stabbed to death in her apartment in Moscow on 15-16 October 1997.
In 2017, within the framework of a joint anti-phishing project of the Bank of Russia and search engine
Yandex
Yandex LLC (russian: link=no, Яндекс, p=ˈjandəks) is a Russian multinational technology company providing Internet-related products and services, including an Internet search engine, information services, e-commerce, transportation, map ...
, a special
check mark
A check or check mark (American English), checkmark (Philippine English), tickmark (Indian English) or tick ( Australian, New Zealand English, and British English) is a mark (✓, ✔, etc.) used, primarily in the English-speaking world, to in ...
(a green circle with a tick and 'Реестр ЦБ РФ' (Bank of Russia Register) text box) appeared in the search results, informing the consumer that the website is really owned by a legally registered company licensed by the Bank of Russia.
Chairmen
Governors of the State Bank
The governor was appointed by the emperor of Russia.
Chairman of the board of the USSR State Bank
The chairman was appointed by the
Premier of the Soviet Union
The Premier of the Soviet Union (russian: Глава Правительства СССР) was the head of government of the Union of Soviet Socialist Republics (USSR). The office had four different names throughout its existence: Chairman of the ...
.
President of the Central Bank of Russia
The President of the Board of Directors of the Central Bank is the head of the
central banking system of the Russian Federation. The Head is chosen by the President of Russia; and serves for four-year-terms after appointment. A Head may be appointed for several consecutive terms (
Sergey Ignatyev was the Governor of the Central Bank for 11 years, and he was appointed three times, in the longest serving term in post-soviet Russia).
Subsidiaries
The Central Bank of Russia holds directly significant participatory interests in a number of Russian companies:
*
Sberbank of Russia
PJSC Sberbank (russian: Сбербанк, initially a contraction of russian: сберегательный банк, translit=sberegatelnyy bank, lit=savings bank, link=no) is a Russian majority state-owned banking and financial services compan ...
(50%+1 voting share of the stock);
*
Moscow Exchange
The Moscow Exchange (MOEX; rus, Московская биржа, r=Moskovskaya birzha, p=mɐˈskofskəjə ˈbʲirʐə, a=) is the largest exchange in Russia, operating trading markets in equities, bonds, derivatives, the foreign exchange market, ...
(11.779% of the stock);
*
Russian National Reinsurance Company
Russian National Reinsurance Company (RNRC) is the largest Russian reinsurance company. Central Bank of Russia is a full shareholder of RNRC. The state-owned reinsurance company was set up in 2016. RNRC is No 1 in terms of the authorized share c ...
(100% of the stock);
* Trust company of the Banking Sector Consolidation Fund (100% of the stock);
* Rosincas (Russian Association of Cash-in-transit).
Additionally, the Bank of Russia held earlier interests in some other Russian organizations. In particular, after the liquidation of
Gosbank
Gosbank (russian: Госбанк, Государственный банк СССР, ''Gosudarstvenny bank SSSR''—the State Bank of the USSR) was the central bank of the Soviet Union and the only bank in the entire country from 1922 to 1991. ...
(State Bank of the USSR), the CBR beneficially acquired complete or controlling interests in five so-called "Russian Foreign Banks" (until 1991 – "Soviet Foreign Banks"):
*
VTB Bank
VTB Bank (; formerly known as ''Vneshtorgbank'', , lit. 'International Trade Bank') is a Russian majority state-owned bank headquartered in various federal districts of Russia; its legal address is registered in St. Petersburg; as of 202 ...
(99.99% of the stock – until 2002, now - 60.9% owned by The Federal Agency for State Property Management (Rosimushchestvo) );
*
Donau Bank AG, Vienna;
*
East-West United Bank East-West United Bank is a bank based in Luxembourg, owned by Sistema. The bank offers private banking and corporate financing. East-West United Bank was established on 12 June 1974 as a "daughter" bank of the Soviet Union's Central Bank.
History
...
, Luxemburg;
*
Eurobank, Paris;
*
Moscow Narodny Bank, London;
*
Ost-West Handelsbank, Frankfurt am Main.
All of them were members of the USSR
Vneshekonombank system and were transferred to the CBR in 1992 by the Resolution of the Presidium of the
Supreme Soviet of Russia
The Supreme Soviet of the Russian SFSR (russian: Верховный Совет РСФСР, ''Verkhovny Sovet RSFSR''), later Supreme Soviet of the Russian Federation (russian: Верховный Совет Российской Федерации, ...
. For over five years – 2000 to 2005 – all stocks of the Russian Foreign Banks were being purchased from the Bank of Russia by
VTB Bank
VTB Bank (; formerly known as ''Vneshtorgbank'', , lit. 'International Trade Bank') is a Russian majority state-owned bank headquartered in various federal districts of Russia; its legal address is registered in St. Petersburg; as of 202 ...
.
) associated with
Saint Petersburg
Saint Petersburg ( rus, links=no, Санкт-Петербург, a=Ru-Sankt Peterburg Leningrad Petrograd Piter.ogg, r=Sankt-Peterburg, p=ˈsankt pʲɪtʲɪrˈburk), formerly known as Petrograd (1914–1924) and later Leningrad (1924–1991), i ...
included directors and shareholders of Tokobank (russian: Токобанк) including Sudhir Gupta, owner of Amtel Tire Holding and controlled Yunicbank (russian: Юникбанк), whose August 1998 head of the supervisory board was Stepan Kovalchuk (russian: Степан Ковальчук), the chairman of the board of Flamingo Bank (russian: банк «Фламинг»). Stepan Kovalchuk is a grand-nephew of Yuri Kovalchuk.
[
As part of the financial support to credit institutions, the Bank of Russia invests in them through the Banking Sector Consolidation Fund and acquires (on a temporary and indirect basis) shares in the equity of such banks. The first project of this kind was ]Otkritie FC Bank
PJSC "Bank Otkrytie Financial Corporation" or Otkrytie FC Bank (russian: Банк «ФК Открытие», translates as ''opening'' or ''discovery'') is one of Russia's largest full-service commercial banks. It has more than 440 offices of di ...
, in summer 2017.
Politics
In December 2014, amidst falling global oil prices, Western sanctions over the Ukraine crisis, capital flight
Capital flight, in economics, occurs when assets or money rapidly flow out of a country, due to an event of economic consequence or as the result of a political event such as regime change or economic globalization. Such events could be an increa ...
, and fears of recession, the bank had increased the one-week minimum auction repo
A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is a form of short-term borrowing, mainly in government securities. The dealer sells the underlying security to investors and, by agreement between the two par ...
rate up by 6.5 points to 17 percent.
This caused a run on the ruble, and on 29 January, the bank decreased the rate by two points to 15 percent.
In January 2015, the head of monetary policy, Ksenia Yudayeva, a proponent of strict anti-inflation policy, was replaced by Dmitry Tulin, who is "seen as more acceptable to bankers, who have called for lower interest rates".
In response to the 2021-2022 Russo-Ukrainian crisis, multiple countries imposed economic sanctions
Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they ma ...
against Russian banks. On 22 February 2022, US president Joe Biden announced restrictions of activities by US citizens involved with the Bank of Russia and others. In March, the Bank of International Settlements
The Bank for International Settlements (BIS) is an international financial institution owned by central banks that "fosters international monetary and financial cooperation and serves as a bank for central banks".
The BIS carries out its work th ...
suspended the Bank of Russia. In March 2022, the Depository Trust & Clearing Corporation
The Depository Trust & Clearing Corporation (DTCC) is an American post-trade financial services company providing clearing and settlement services to the financial markets. It performs the exchange of securities on behalf of buyers and sellers ...
blocked Russian securities from the Bank of Russia and Russia's finance ministry.
At the end of May 2022, three months into the invasion of Ukraine, the central bank cut interest rates in an effort to prop up the increasingly isolated Russian economy, suffering shortages and supply chain issues. The inflation rate rose to 17.8 percent in April. Also the ruble reached its strongest level against the U.S. dollar in four years, hurting exports.
Sanctions also included asset freezes on the Russian Central Bank, which holds $630 billion in foreign-exchange reserves
Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence ...
, to prevent it from offsetting the impact of sanctions. On 5 May 2022, President of the European Council Charles Michel
Charles Michel (; born 21 December 1975) is a Belgian politician serving as the president of the European Council since 2019. He previously served as the prime minister of Belgium between 2014 and 2019.
Michel became the minister of Developm ...
said: "I am absolutely convinced that this is extremely important not only to freeze assets but also to make possible to confiscate it, to make it available for the rebuilding" of Ukraine
Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inv ...
.
See also
* Bank for International Settlements
The Bank for International Settlements (BIS) is an international financial institution owned by central banks that "fosters international monetary and financial cooperation and serves as a bank for central banks".
The BIS carries out its work thr ...
* Banking in Russia
* Consumer Leverage Ratio
The consumer leverage ratio, a concept popularized by William Jarvis and Dr. Ian C MacMillan in a series of articles in the Harvard Business Review, is the ratio of total household debt, as reported by the Federal Reserve System, to disposable per ...
* Core inflation
Core inflation represents the long run trend in the price level. In measuring long run inflation, transitory price changes should be excluded. One way of accomplishing this is by excluding items frequently subject to volatile prices, like foo ...
* Economy of Russia
The economy of Russia has gradually transformed from a planned economy into a mixed market-oriented economy.
—Rosefielde, Steven, and Natalia Vennikova. “Fiscal Federalism in Russia: A Critique of the OECD Proposals.” Cambridge Journa ...
* Farm Credit System
The Farm Credit System (FCS) in the United States is a nationwide network of borrower-owned lending institutions and specialized service organizations. The Farm Credit System provides more than $304 billion in loans, leases, and related services t ...
* Federal Reserve System
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...
* Federal Reserve Statistical Release
* Free banking
* Gold standard
A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the l ...
* Gosbank
Gosbank (russian: Госбанк, Государственный банк СССР, ''Gosudarstvenny bank SSSR''—the State Bank of the USSR) was the central bank of the Soviet Union and the only bank in the entire country from 1922 to 1991. ...
* Government debt
A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit oc ...
* Goznak
Joint Stock Company "Goznak" (short for ''Государственный знак'', or State Insignia) is a Russian joint-stock company responsible for research and development as well as manufacturing security products including banknotes, coin ...
* Independent Treasury
The Independent Treasury was the system for managing the money supply of the United States federal government through the U.S. Treasury and its sub-treasuries, independently of the national banking and financial systems. It was created on August 6, ...
* International Reserves of the Russian Federation
International Reserves of the Russian Federation are liquid assets held by Central Bank of Russia, the Russian Federation's central bank or other monetary authority in order to implement monetary policies relating to the country's currency exchange ...
* Andrey Kozlov
* National Foreign Exchange Association
* Payment system
A payment system is any system used to settle financial transactions through the transfer of monetary value. This includes the institutions, instruments, people, rules, procedures, standards, and technologies that make its exchange possible.Bia ...
* Real-time gross settlement
Real-time gross settlement (RTGS) systems are specialist funds transfer systems where the transfer of money or securities takes place from one bank to any other bank on a "real-time" and on a " gross" basis. Settlement in "real time" means a paym ...
* Russian National Card Payment System
Notes
References
Further reading
*
External links
Bank of Russia
*
*
State Bank of the Russian Empire at the site of the Central Bank of the Russian Federation
*
State Bank of the Russian Empire at the site of the Central Bank of the Russian Federation
{{authority control
Economy of Russia
Banks established in 1860
1860 establishments in the Russian Empire
Government agencies of Russia
Russian entities subject to the U.S. Department of the Treasury sanctions