presentation on fin of russia

7/30/2019 Presentation on Fin of Russia

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Prepared for

Md. Shahriar Kabir Course Instructor

FIN 506: Financial Market & InstitutionsWMBA-IBA-JU

Prepared ByGroup 3, WMBA, IBA-JU

Mir Abubakor Sidique ID# 201103068

Md. Mahbubur Rahman ID# 201103045Mohammad Salim Shah ID# 201103079Md. Sultan Mollah ID# 201103057

Poritran Talukder ID# 201103098


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This study about a description on Financial Systemof Russia

Purpose of the studyRussia is the world's largest countryThe financial system of the largest country of the worldRole of the financial system in RussiaGain a thorough knowledge about the financial

system of Russia


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Methodology of study

Desk researchwebsite searchingDiscussions with the knowledgeable

peopleRelevant papers, reports andnewspapers

Various articles of financial system of RussiaData has been collected from secondary

sources for necessary analysis


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Components of Financial System of Russia

Financial Markets

Banking Sector & Other financialintermediaries

Central Bank

Exchange Rate Policy & MonetaryPolicy


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Key economic indicators

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

1998 19992000 2001 20022003 2004

b l n R b l

0

100

200

300

400

500

600

b l n U S D

GDP, bln RblIndustrial output, bln RblGDP, bln USDIndustrial output, bln USD

050

100150200250300

1 9 9

8

1 9 9

9

2 0 0

0

2 0 0

1

2 0 0

2

2 0 0

3

2 0 0

4

2 0 0

5

b l n U S D

0%5%10%15%20%25%

%

Export, bln USDImport, bln USDTrade balance, % GDP

0

50100

150

200

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

b l n U S D

-8%-6%-4%-2%0%2%4%6%

% G D P

Domestic Debt of RF External Debt of RFBudget Surplus, % GDP


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Financial Markets of Russia

Foreign Exchange MarketMoney MarketCapital Market

The FederalGovernment BondsRegional BondsCorporate Bonds


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Indicators of the capital market developmentin Russia appear positive

Capitalization of the stock market has grown 8times since the end of 2000

Credit rates for Russian enterprises havereduced two-three times since the beginning of 2000

Volume of provided credits grew 7.9 times in 5years

Investment raising on securities market grew 9.7

times in 2000-2004


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Equity Market Russian Trading System (RTS) & MoscowInterbank Currency Exchange (MICEX) mergedin December 2011The headline index for the Russian stock

markets is the RTS index.Total market capitalisation amounted to 67 % of GDP in 2010, up from depressed levels in 2008and 2009, but still well below the peak in 2007,when it reached 98 % of GDP


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Assets of the banking system

-

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

7 000 000

8 000 000

2000 2001 2002 2003 2004 2005

m l n r u

b l e s

Assets Capital


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Assets of the investment funds

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

I I I / 2 0 0 0

I V / 2 0 0 0

I / 2 0 0 1

I I / 2 0 0 1

I I I / 2 0 0 1

I V / 2 0 0 1

I / 2 0 0 2

I I / 2 0 0 2

I I I / 2 0 0 2

I V / 2 0 0 2

I / 2 0 0 3

I I / 2 0 0 3

I I I / 2 0 0 3

I V / 2 0 0 3

I / 2 0 0 4

I I / 2 0 0 4

I I I / 2 0 0 4

I V / 2 0 0 4

I / 2 0 0 5

I I / 2 0 0 5

J u

l . 2 0 0 5

m l n r u

b l e s


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Credit rates for non-financial organizations

0

5

10

15

20

25

30

35

2000 2001 2002 2003 2004 2005

up to 1 year period from 1 to 3 years period over 3 years period


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Non-Banking Institutions Russias nonbank financial institutions is evenlower than that of the banking sectorInsurance sector is highly fragmented

At the end of 2011 there were about 580insurance companiesMinimum own capital of a life insurancecompany rose from 60 million rubles (1.5 million

euros) to 240 million rubles (6 million euros)Maximum allowable share of foreign capital inthe sector from 25 % to 50 %.


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Dynamics of lending in real sector of economy

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

m l n r u

b l e s

all lendings incl. with more then a year period incl. ruble lendings with more then a year period


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Central Bank of Russia

Interest rates on CBR operationsReserve requirementsOpen market operations

Refinancing of credit organizationsCurrency interventionsSetting of money-supply targetsDirect quantitative restrictionsBond issues


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Monetary policy Liquidity absorptionLiquidity supplyReserve requirements


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Threats of the Russian securities market

Many Russian companies dont recognizedomestic market as a main investments source

Lack of liquid, quality assets for investment of

obligatory accumulative systems assetsLarge influence of speculative funds

Trade of Russian assets goes under foreign

jurisdiction


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Main strategy of financial

markets development

Increasing competitiveness of all financialmarket institutions including regulator itself aswell as financial intermediaries andinfrastructureCreating legal environment for advanced

financial instruments for risk hedging andsecuritizationDeveloping legislation and regulation foreffective protection of investors and clients of financial service providers


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ConclusionThe Central Bank of Russia faces a demandingtask in conducting monetary policyUnderdeveloped financial markets and large andvolatile capital flows

CBR was restrained in its monetary policy byexchange rate targeting and significant excessliquidity of the banking sector

Interest rate policy of the CBR has not been veryeffectivepolicy framework is gradually changing


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Thank You

To

All


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Q and A Session

presentation on fin of russia

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