The bankruptcy of credit institutions

Thesis "Features of bankruptcy from credit institutions" was chosen in view of Russia's transition to a market economy practices, the most important of which is the existence of a modern and efficient banking system. Creating a large number of commercial banks at this stage of development inevitably entailed and some negative consequences resulting from lack of capital, the experience of the banking, economic instability, lack of trust of individuals in the banking system as a whole. These effects were compounded by the fact that in the country there was no legislation to regulate in detail the bankruptcy of credit institutions.
            During the 16 years of its existence, the banking system of Russia has repeatedly faced with the crisis, "black" Tuesday 1994, a systemic banking crisis in August 1998,
            These circumstances made it necessary legal regulation of issues related to crisis management, that is, with the ability to prevent bankruptcy, as well as bankruptcy procedures to meet the claims of creditors. The Law "On Insolvency (Bankruptcy)" was adopted 25.02.1999, he laid the foundation of concepts such as signs of bankruptcy of credit institutions, measures to prevent bankruptcy and others.
The urgency of improving the mechanism of bankruptcy of credit institutions have now led to the adoption of the Act of August 20, 2004 № 121-FZ, which entered into force November 26, 2004 This law has led to a substantial reform of the domestic legislation. This reform can be described in two ways. On the one hand some of the issues resolved, sharply arisen in practice. On the other - their very decision is not always perfect, as in the law, and the practice of its application remain systemic contradictions.
Despite the fact that there is recent works devoted to this problem (eg White, LP, A. Belyakov, Lvov VS Tazihinoy TV, Tal GK and others)
can not believe that this theme is designed well enough.
The purpose of this paper is to determine the characteristics of bankruptcy of commercial banks in the Russian Federation. To achieve this purpose, the authors solved the following problems:
• The causes and effects of modern banking crises
• analyze international experience bankruptcy of credit institutions
• The features of the bankruptcy of credit institutions in Russia
• identified the functions and tasks of the administrator of credit organizations in the bankruptcy proceedings
• Analyze the evaluation of technology in bankruptcy of credit institutions.

            Structural thesis consists of an introduction, two chapters, divided into several sections, the common idea of ​​research, conclusions and bibliography.
            The first chapter discusses the need for crisis management by credit institutions in Russia. The first paragraph of the chapter causes and effects of modern banking crises. It examines the external economic factors, market reforms and their impact on the crisis processes in the banking system. In this section analyzes the types of banking crises, and their determinants.
Foreign experience bankruptcy examined by the author in the 2nd paragraph. It was studied and analyzed the experience of Austria. This is due to several factors: first, the Austrian legislation for the past 10 years has been brought into full compliance with the norms of European law and, therefore, is representative. And, secondly, it has a reputation of legislation that form the basis for effective cooperation of state control and senior management of the bank in the process of crisis management. As a result of this study, the author concludes that the high level of crisis management in banks in Austria is largely due to stringent regulatory requirements for bank management in the country and a high level of control over their implementation by the Ministry of Finance and the National Bank, which, of course, can be used in the experience of crisis management in Russia.
The analysis of the theoretical and factual data section shows that typical causes of banking crises that have existed in almost all developed countries are characteristic of Russia, and in this connection, the Russian banking system should be built and developed taking into account the world experience.
The third paragraph of this chapter discusses the theoretical and practical aspects of the bankruptcy of credit organizations in Russia. The author dwells on the role of the Central Bank for the development and strengthening of the banking system, as well as the oversight role of the Central Bank, in particular, the example of a system of indicators, ratios. Address measures to prevent bankruptcy, their importance for credit institutions. The author concludes that these measures are quite voluminous and thoroughly settled the system of measures aimed at preventing the bankruptcy of credit institutions.
            In the 2nd chapter of the work deals with the theoretical and practical aspects of the bankruptcy proceedings, the problems and their solutions. The first section gives a description of the bankruptcy proceedings as the final stage in the bankruptcy of a credit institution, there is systemic events of this procedure. This section analyzes the concept of the estate (as amended by the Law № 121-FZ) problems in assessing the debtor's property, the issues related to the establishment of the Law of priority of creditors and others.
            Paragraph 2 of Chapter 2 is devoted to the functions and tasks of the administrator. It addresses the rights, duties, responsibilities of the administrator, points to innovation law № 121-FZ, which refers to the 2 types of bankruptcy administrators: bankruptcy administrators in bankruptcy of credit organizations with a license of the Central Bank of Russian Federation for raising funds from individuals in deposits - by virtue of the law is the Deposit Insurance Agency, and the insolvency administrators in bankruptcy of credit institutions that did not have a license of the Central Bank of the Russian Federation to attract individuals' funds in deposits - in this as approved arbitration managers, accredited by the Central Bank.
            The third paragraph of chapter 2 analyzes the possibility and necessity of using performance technology with the bankruptcy of a credit institution.

General informatsyya of the payment system.

About the payment system
Historical information
Geography of activity
Indicators payment system NCC

About the payment system
Payment system NCC (National Credit Cards) was created in 1994 in the city of Togliatti of "National Credit Card", acting as a single processing center, and of AVTOVAZBANK, acting as a settlement bank.
Payment system NCC offers its customers technology to carry out the entire cycle of financial calculations - from receiving wages to pay for goods and services - cashless, using the technology of bank cards. During his time created a large network and base, which formed the interbank payment system NCC, which allows banks to provide customers with a wide range of services at the current level of technology.
Today cardholder NCC | UC can not only use all the services in the network on the map to NCC, but also withdraw cash throughout the Union Card service network in Russia, Ukraine, Belarus, Kyrgyzstan

Participants in the payment system NCC are banks offering services to its customers payments and credit cards with NCC, Visa, MasterCard, Union Card.

Customers of participating banks are:
- Enterprise-employers with the payment of wages to the technology cards PS NCC;
- Individual bank customers - cardholders NCC, through which they are paid, pay for purchases and conduct non-cash payments for personal services;
- Commercial and service enterprises (shops, salons, pharmacies, restaurants, etc.), receives PS NCC cards as payment for goods and services rendered.

In the system of NCC are debit (payroll cards, corporate) and credit card types, the principle of which is based on magnetic technology.


Historical information

August, 1994
Powered by JSC "National Credit Cards."
July 12, 1995
Of AVTOVAZBANK first plastic card issued NCC.
1995
Strong growth momentum imparted salary projects using plastic cards for employees of "AvtoVAZ".
2001
Management of the company has been chosen strategic course of development of the regions of Russia and the expansion of services of non-cash payments.
2004
The company officially received the status of Third Party Personalizer international payment system Visa International and to exercise personalization and card processing Visa. There is an opportunity for cardholders to use Visa card on the same account with the card NCC.
2005
JSC "National credit card" has acquired 100% stake in ZAO "processing company" Union Card "(PS Union Card).
2006
Actively promote its credit cards.
2007
A single technological processing center, which serves the members of the two payment systems - NCC and Union Card. June 1 released combined map NCC | UC. The card holder NCC | UC can not only use the services of the network NCC, but also withdraw cash in the whole system Union Card in Russia, Ukraine, Belarus, Kyrgyzstan.
2008
The new name, a new corporate identity - United Payment System NCC | UC. Introduces new standards for working with customers and partners. Began to work the new website. Launched a project issue and service cards MasterCard. Union Card Payment System and the Bank "Eurofinance Mosnarbank" together with the Chinese payment system China Union Pay started a joint project of the issue and service card payment system China Union Pay (CUP) in the territory of the Russian Federation within the framework of their June 2007 agreement.

Geography of activity

Today payment system NCC brings together 40 banks and their branches operating in the following areas: Samara, Ulyanovsk, Orenburg, Moscow, Tyumen, Chuvash Republic, Krasnodar region, Yakutia. In Moscow and St. Petersburg.

The geography of the new map NCC | UC - Russia, Ukraine, Belarus, Kyrgyzstan, Azerbaijan.


Indicators payment system NCC

40 commercial banks and their subsidiaries are included in the payment system NCC.
Around 3,000 companies - participants of the project on the basis of salary cards NCC | UC.
More than 7 billion - an average monthly turnover of money in payment system.
30-40% - annual growth of infrastructure.

More than 1.3 million cards in service.

Finance foreign corporates

In industrialized countries (USA, Canada, Japan), the corporate form of business organization is the key.

The scale of the corporate groups the following data. According to experts in the world today, there are about 40 thousand interbranch associations with signs of corporate structures, which include about 180 thousand affiliates in 150 countries. They control 50% of industrial production and trade of developed countries, about 80% of all patents and licenses on the latest equipment, technology and know-how.

The concentration and centralization of capital is the starting point for the formation of corporate entities.

By definition, Van Horne: "Corporation - an impersonal company, established by law, it can own property and to commit themselves" .1

S. Ross gives the following interpretation of the concept: "The Corporation - a business founded as a separate entity, consisting of one or more individuals or entities" 2

The main difference from other forms of corporate organization of business is that it exists independently of its owners. Disclaimer - an important advantage compared to the self-employed or a partnership. Corporation shall have the right to raise capital in cash on its behalf, without imposing on their owners to unlimited liability. Therefore, to meet the demands on the corporation can not confiscate private property of the shareholders. To a share of property of the corporation confirmed interest in its share capital, and each holder of its shares belong to the property, which corresponds to the share of its shares in the total volume. These shares can be transferred to others, which is another advantage of corporate ownership. In addition, the company continues its activities and on the retirement of individual shareholders from the implementation of the package to other investors.

In the practice of U.S. corporations can borrow money and own property, sue and be sued, enter into contracts. The corporation may be a general or limited partner in a partnership, as well as own shares in other public company. So her agency is more complex than other forms of business organization. Forming Corporation includes preparation of constituent documents (memorandum and articles). The memorandum contains a range of information, including the name of the corporation, its expected life activity (in most cases it is unlimited), the purpose of business, the names of its owners and managers, the number of authorized shares, the amount of paid-up share capital, etc. After obtaining permission from the state government manufactured articles of incorporation, claiming it as a legal person, and sets out the conditions of its activity.

In large corporations, shareholders (co-owners) and managers - usually different group of people. The shareholders elect the board (board of directors), which appoints leading managers, who are responsible for managing the affairs of the corporation for the benefit of shareholders. Nominally, the shareholders control the corporation through the election of the Board of Directors (Supervisory Board).

As a result of the separation of ownership and management of the corporate form of business organization has a number of advantages. Share capital represented by shares may be transferred to other owners, and therefore the period of existence of the corporation is not limited. Corporation carries out raising equity and debt capital in its own name. As a result, shareholders have limited liability for the debts of the corporation. The most that they can lose - is the money that they have invested in its shares. The relative ease of transfer of ownership, the limited liability of shareholders for its debts, for an unlimited period of life - the undeniable advantages of the corporate form of business organization. If corporations need additional equity capital, it has the right to issue new shares and to attract outside investors. Large U.S. corporations (ATT, Ceneral Motors and others) have hundreds of thousands of owners (shareholders). In such cases, ownership of shares of the share capital may change frequently, without impacting on the continued operation of the corporation. Corporate form has a major drawback, which is double taxation. As a legal entity is subject to income taxes (income). Cash provided to shareholders in the form of dividends are taxed again as their personal income. However, in this case, there is a disadvantage in certain circumstances. In practice, there are ways to avoid double taxation. For example, small corporations in the form of partnerships pay only income tax.

In acute need for capital, characteristic of a developed economy, manifest inconsistency sole ownership and partnership, bringing the corporation has become a major business organizations. Organization of a corporation has many varieties around the world. Rules of conduct on the market vary from country to country, but the main characteristics - the collective (public) ownership and limited liability - remain. Such firms are often called equity or public limited companies, depending on their specific nature and origin.

One of the leading forms of the organization of financial capital is a holding company. In modern conditions holdings operating in the West in all major sectors of the economy: industry, transport, trade, banking, financial services, etc. This form of business organization more viable, flexible and effective. Holding (derzhatelskaya) the company is derived from the English word «to hold * - keep. This particular type of financial company that is created to ownership of a majority of shares in other companies in order to monitor and control their activities. In modern conditions, almost all of the largest U.S. corporations, EU, Canada and Japan are holding a form of organization, that is, at the head of numerous companies within the group of companies, is holding controlling stakes in concentrating all divisions, which gives corporations the integrity and manageability.

There are two types of holding companies:

1) pure holding company that performs only control and management and financial functions;

2) mixed holding company engaged in functions other than those defined as entrepreneurial activity - production and trade, credit and finance, etc.

Holding companies are an important link in the so-called system of participation, through which financiers dominate the formally independent companies that have the capital, many times greater than their own. Holdings by acquiring a controlling interest in a company, are able to nominate their representatives to the Board of Directors and other management-controlled company.

To establish control over other companies holding companies (parent company) are widely used system in the equity share capital of other companies. The parent company is able to provide full control over the subsidiaries, not necessarily providing 100% of the share capital. The parent company, owning 51% of the subsidiary, also has a major impact on its operations. In practice, there are other forms of mutual ownership of capital: a circular, cross and other holdings. Most large corporations carry out overseas operations and are transnational companies (TNCs), and is holding business organization is particularly important, since the direct control of foreign affiliates (testing, inspection) is difficult. Therefore, the parent holding company of TNK does the following: development of economic and marketing strategy, coordination of financial policies of all subsidiaries of large-scale research and development projects, etc.

In the course of its corporate finance management can have quite different objectives:

avoid bankruptcy and financial losses (profits, income and capital);
leadership in the competition;
Maximizing the "price of the company" through the growth of the market value of the shares;
increase in production and sales;
maximize profits and minimize costs;
ensuring an adequate level of return on assets, equity and sales, etc.
The priority of a particular purpose is treated differently in the existing theory of the firm. The most common statement that the corporation must be operated in such a way as to ensure maximum revenue to its owners (owners). This is usually associated with an increase in earnings, high returns on capital with minimal risk. Unambiguous whether such a conclusion? Let us try to answer it.

In the traditional neoclassical economic model assumes that each firm must maximize profits (from the perspective of long-term it is received). In the ideal case where the alleged fairness of information, availability of qualified management and other aspects of the achievement of the maximum possible. So in reality the notion of "normal" profits that suits the owners of the firm. Profitability of different types of production is not the same, it does not cause aspiration of all businesses change their business more profitable. At the heart of this approach is very common pricing system for the products - the full costs plus the average rate of profit.

In addition, the current trend of capital flow between the sectors of the economy and business areas, which involves the alignment margins.

Other researchers suggest the possibility that the basis of the activities of the Group Management commitment is necessary to increase the volume of production and sales. Justified by the fact that many managers represent their position in society to a greater extent with the size of the firm, rather than its income, which is not always certain.

Most prevalent in the West, has received in recent years, "The theory of the firm to maximize the price." The developers of this theory is based on the assumption that none of the existing criteria: sales, profit, profitability, and others - can not be considered as a measure of the effectiveness of the decisions of the financial and investment character.

Choose the criteria should be:

well-founded;
based on the forecast of income owners of the corporation;
acceptable for investment decisions, including the search for sources of equity dividends and financing of the firm.
It is recognized that these conditions are met the criterion of maximization of shareholders' equity, ie, the market price of shares of the corporation. From the perspective of investors in the basis of this approach is the assumption that the well-being of the owners of the company is not in the current mass of profit growth, and to increase the market price of its shares. Therefore, any solution that gives rise in the market value of common shares to be taken by owners and managers of the corporation as their interest.

Criterion of maximizing the corporation's share price as the most feasible and the priority in financial management is applicable only in the event that the stock market has no restrictions (discrimination) in determining the price of financial instruments, ie the principle of "supply-demand".

Note that in the framework of the theory of market pricing of financial assets and the main ideas of the behavior of investors efficient market are as follows.

In this kind of market, any new information as it becomes available immediately reflected in the share price. Furthermore, this information may come to the stock market by accident, and it can not predict in advance when it will arrive and how much will be useful for issuers and investors.

It should be noted that the profit and risk impact on the price of an ordinary share is ambiguous. Higher income is dividend growth, and consequently, an increased demand for shares in the stock market. Conversely, an increase in risk lowers their prices (especially for conservative and moderate investors). There is a "reset" of the stock market by their owners, which leads to financial instability and the loss of corporate investor confidence in its securities.

Thus, the profit and risk - the two key executives of financial management. The ratio of these two variables at any given time determines the specific decisions of the financial manager (director). They aim to achieve two key objectives:

increase in profits or property (equity) capital;
preservation of liquidity, ie, the ability of corporations to fulfill its internal and external financial obligations to partners, government and staff. Before the financial manager is always a local problem - to maximize the dividend per share for each individual transaction.
Global goal - to achieve long-term sustainability of the dividend, the acceleration of capital turnover and increase of security firm from financial risk.

Output. Thus, the effective management of corporate finance is designed to resolve a contradiction arises mezhdustrategicheskimi goals and equity and financial resources to achieve them at the various stages of its development.

The structure of the U.S. banking abroad

July 27, 2012 UEFIMA.RU: U.S. banks have most of their offices in Latin America, the Far East, the Caribbean and London. The largest amount of assets have offices in London, which is a major international financial center and the focal point of the Eurodollar market. Latin America and the Far East have many branches in the investigation of the importance of U.S. trade with these regions.
Caribbean (Bahamas and the Cayman Islands) is an important place of international banking as a "tax haven", where there are no taxes or have restrictive regulation. Indeed offices Bahamas and the Cayman Islands - a "shell institution" because that function primarily as accounting offices and do not provide normal banking services.
An alternative to the structure of U.S. banks that operate abroad, there is a law on the Edge corporation, which is mainly for the international banking. Corporation established by law Edge (Act of 1919) allows U.S. banks to compete more effectively with foreign banks by the release of part of the U.S. banking regulation.
For example, a corporation under the law Edge, are exempt from the ban on the establishment of offices in other states. They may have branches in different states to promote trade with the different parts of the world: the separation of the West. Coast to manage the financing of trade with Japan, an office in Miami to finance trade with Latin America and so on.
U.S. banks (through their holding companies) may own a controlling share of foreign banks and foreign companies that provide financial services. International activities of banks - members of the Federal Reserve System, bank holding companies and corporations created under the Edge Act (covering the entire international financial activities, which are U.S. banks), regulate the rules of the Federal Reserve System (Regulation "K").
In late 1981, the Federal Reserve System in the United States adopted the creation of international banking channels (MBC), which can take time deposits from foreigners. These contributions do not fall under the reserve requirements under any restrictions on the payment of interest. IBC can also provide loans to foreigners, but prohibit the loans to residents. U.S. encourages the creation of IBC, freeing them from the payment of taxes, state and local taxes.
MBC actually treated as foreign branches of U.S. banks, which are not subject to domestic regulation and taxation. The purpose of the IBC is to encourage the U.S. and foreign banks to expand banking operations in the United States rather than abroad. From this position, MBC succeed. In two years, their assets have grown to almost 200 billion dollars.
The growth in international trade is not only stimulated U.S. banks to open branches abroad, but also to encourage foreign banks to open branches in the United States. Now there are about 500 branches of foreign banks operating in the United States and has over 20% of total U.S. bank assets.

U.S. banks set a record for earnings

U.S. banking sector as a whole has started 2012 on a positive note. For the first quarter, local lending institutions have managed not only to make a record for the last five years, $ 35 billion, but also significantly reduce their losses on loans. This positive trend has pleased the authorities that guarantee deposits of U.S. banks - for the first quarter, the Federal Deposit Insurance Corporation (FDIC) has expanded its balance sheet directly on the $ 3.5 billion
U.S. FDIC summarized the activities of national banks for the first quarter of 2012. The result is a record of calculations of total banking income at 35.3 billion dollars, which is 23% higher than the same period a year earlier. A large amount of credit organizations in the U.S. were able to earn only in the second quarter of 2007, before the onset of the global financial crisis. It is worth noting that the stability with which American banks manage to increase their own profits - increase performance lasts for the 11th consecutive quarter.
It is noteworthy that the current increase is due to the success of the whole sector, not individual companies. Once 67% of credit institutions were able to improve their financial performance. However the ball is still ruled by the largest representatives of the industry - on banks with assets of more than $ 10 billion fell 81% of earnings for the quarter of funds, although these organizations account for only 1.4% of all U.S. companies in the sector.
However, with the greatest pride in the FDIC reported a decrease in the number of "problem" banks. By the end of the first quarter in this category carried the 772 organizations FDIC bank, the bank has a 41 fewer than at the end of 2011. The decline was due to the improvement in bank balance sheets - fail during this time had only 16 banks. Reduction in the number of bankruptcies occurring the fourth consecutive quarter, has played into the hands of the very FDIC, which was able to increase its assets immediately to $ 3.5 billion, to 15.3 billion dollars
True, a barrel of honey in the form of higher profit was slightly marred fly in the ointment. Actively lending to legal entities (the growth of loans to 14%), banks are still reluctant to deal with private clients. FDIC has documented the decline in consumer credit, and in the most important areas - mortgages and credit cards. "This trend is mainly due to macroeconomic factors - the country's still-high unemployment rate, many of the houses are empty," - said RBC daily EIU analyst Steven Leslie. In his opinion, this is not the only problem the sector. "Banks can not increase profits for a long time without massive cost reduction and investment in technological component of the business. Previously, they could avoid this by increasing the value of their services, but now the regulators are very tough on this. Given the significant change in the law, to end the year as well as it began, U.S. banks will be extremely difficult, "- said Mr. Leslie