Klimova Anna,
4th year student of Law Faculty
of the SU-HSE
Head of research: Fogelson U.B.
Thesises of the essay:
“The Principles of regulation of the Russian banking sector in comparison
with international standards”
The broadening of the commodity and services markets’ borders led to the necessity of
the execution of the international settlement between the contractors all over the world. This
tendency reflected on the rash integration of the states banking sectors to the international
financial market of the bank services rendering. Because of such integration the execution of the
banking supervision in every state needs clear and effective regulation that is determined in
normative and recommendatory acts of the special international organizations. Such organization
in the banking sector - the Basel Committee on Banking Supervision (hereinafter – “the Basel
Committee”) – has enacted the act named “Core principles for effective banking supervision“. In
this part of the essay will be carry out the brief research on the subject of correlation between the
above-said international principles and the Russian regulation of the banking sector.
The Central Bank (the Bank of Russia) (hereinafter – “the CB”) is a banking supervisory
authority in Russia. However, except of authorities of supervision in banking sector the CB
regulates the monetary policy of Russia. Such combination of such different functions in one
state body generate the idea of separation of the banking supervision authorities from the powers
of the CB1. But now these reforms are far from reality.
According to the articles 3 and 56 of the Federal Law “On the Central Bank of Russian
Federation” the main goals of regulation and supervision executing in the banking sphere are the
next:

Evolution, consolidation and maintaining of the banking system stability;

Defense of the depositors and creditors’ interests.
Let us analyze the observance in Russia of the “Core principles for effective banking
supervision” of the Basel Committee. For that we’ll choose 3 main principles: transparency,
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Proposals to separate banking sector supervision from the authorities of the CB and to pass it to the special purpose
federal body emerged some years ago and were confirmed in the Decision of Russian Government in 2006.
Nowadays in the State Duma of Russian Federation is discussed the legislation of creation a special regulation body
– self-regulating organization (with participation of the state and business entities that operates on the financial
markets) that will have an supervision authority on all financial markets. But not everybody supports this idea
because of the lack of evidentiary support of the efficiency of such organization.
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financial stability and liability of the supervisory authority. Firstly let’s disclose the principle of
transparency. It established as one of the first standards in the “Core principles” and consisted in
requirement of the transparent processes of the banking supervision (i.e., of decisions making).
Also the idea of the transparency is disclosed in the Principles 19 and 21: an effective banking
supervisory system requires that supervisors develop and maintain a thorough understanding of
the operations of individual banks and banking groups. The supervisory authority has to inform
the community about its day-to-day work. The requirement to inform a number of unspecified
persons means for the supervisory authority not only to present the information, but also to
clarify, to ground its actions (decisions). The similar principle of “reasoned arguments” results
from the standard of transparency of the banking supervision authority and will be fundamentally
disclosed in the main essay.
Let us answer to the question whether the principles of transparency and of reasoned
arguments observe in the supervision of banking activity? Despite of the absence of these
principles in the Russian legislation they take action in Russia because of special norms and
practice of application. Reporting of the CB is represented as information with public access and
presents annually to the State Duma of RF (including the official publication on the CB e-page) (
chapter 5 of the Federal Law “On the CB of RF”). Also in the article 77 of above-said Federal
Law is established a duty of the CB to give the answers on the requests of credit institutions in
the limited term – during a months – and to hold consultations with business entities on the most
important subjects. But the situation with the observance of the principle of reasoned arguments
is more difficult – in many norms of the Federal Law “On banks and banking activity” is
established that in the case of adoption of negative for the credit organization decision
supervision authority has to motivate it (i.e. under the article 16 the CB has to motivate the
refusal in registration of credit organization or refusal in the grant of license). But the past
practice of the CB it just shortly pointed the cause of the refusal, didn't ground the motives of the
refusal, didn’t disclose the circumstances that had influence on the refusal. Now the CB slowly
begins to apply in practice the Basel principle of reasoned decision, but insufficiently. The real
application of the principle will allow avoiding in many cases of bringing suits by means of
which credit organizations are trying to protest unmotivated decisions of the CB.
The principle of financial stability of the supervision authority is the next of the core
Basel principles. It is firmly connected to the principle of independence of the banking
supervision body with no financial resources there will be no opportunity to perform the
supervisionОн крепко связан с принципом независимости органа банковского надзора,
ведь без наличия средст не будет возможности осуществлять деятельность по надзору в
банковской сфере (принцип 1 Основных принципов). In compliance with the Federal Law
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“On the CB” the CB has registered capital in amount of 3 billion rubles (article 10) and also it
has a right to make profit from the banking operations and bargains connected with the
performance of the CB functions (article 11). The article 2 of the law also declared the next
norm: “The Bank of Russia undertakes the expenses for account of its own income”. In the
conclusion of analysis of these legal norms can be said about observance of the financial stability
principle in regards of the CB. But there must be mentioned that such observance is possible
only because the CB has other than banking supervision authorities which at large provide its
income.
The last of discussed Basel principles is the principle of supervision authority liability
(core principle 1). It consists in the fact that the efficiency of the banking supervision directly
depends on the reality of the liability of the authority. At that the banking supervisory body has
to bear material responsibility for its violations of the norms. In spite of the declared in the
Russian legislation norms that allow not only to challenge actions (inaction) of the CB, but also
to apply sanctions to the officials that are liable for the violations. In many cases the principle of
the liability is observed by the stated procedures of the decision-making, determined foundations
for every kind of decision and right to challenge illegal in business entity’s opinion decision (by
administrate procedure or by the court proceeding). But also some decisions of the CB give rise
to its criticism from business entities because of the absence of motivation in the decisions. The
situation can be changed by the more effective application of the reasoned arguments principle
by the CB.
International core principles of the Basel committee already are reflected in the Russian
legal system, although they are stated not directly but impliedly in the norms. But in practice
these principles often are not applied. That’s why the correctives in the system of banking
supervision are necessary for the purpose of real observance in Russia of the Basel requirements.
Proposals on such amendments will be examined in the resulting essay.
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