Banks - the main participants of the capital market
The Bank is a party relationship, which in certain transactions in the capital market acts as the lender or the borrower.
Depending on the economic substance of the main activities of commercial banks are divided into two groups.
Passive operations, ensuring the formation of the Bank's resources needed it, but the equity to provide liquidity and to obtain the planned income.
The passive operations are:
• raising funds on deposit accounts (current, time, savings, etc..)
• non-deposit funds (bank loans in the interbank market, the central bank loans, issuance of bank bonds, notes and other obligations).
Main passive operations - raising funds in the bank accounts of all kinds. These tools are called deposits and transactions - deposit.
Active operations - related to the placement of the bank's own funds and borrowings to generate income and to ensure their liquidity.
The active operations include:
• operations to provide loans (credit transactions);
• investments in securities;
• Formation of cash balances and reserves;
• formation of other assets (the formation of fixed assets - buildings, equipment, etc.).
A key form of active transactions - credit, which provide most of the income of many banks. It is an important source of income for the economy.
Bank loan - it is a form of credit, under which funds are provided on loan by banks. Bank loan - the necessary tools to stimulate the economy, without which it can not successfully run producers.
The main source of bank credit are:
♦ temporarily free funds of the state and individuals voluntarily transferred to financial intermediaries for further capitalization and profit. They are reflected in deposit accounts at commercial banks and respective owners provide a fixed income from interest on deposits;
♦ funds temporarily unemployed as the circulation of industrial and commercial capital.
The timing of use of bank loans are classified as:
♦ medium term, short term, long-term;
♦ on demand;
♦ past due loan period has expired;
♦ deferred, for which, at the request of the borrower was postponed maturity.
Depending on the secured loans are: secured and unsecured (unsecured).
Of secured loans by type of collateral distinguished:
♦ with other software.
Bank loan against securities collateral loans is called.
On how to allocate credit:
♦ one-off procedure;
♦ According to open credit line
♦ guaranteed - when commercial bank undertakes to provide a loan at once, when the client is necessary.
In the world of banking practice, the most common patterns of the loan is a line of credit, revolving (revolving) credit, current account, overdraft.
On methods of payment:
♦ in installments;
♦ ahead of time (at the request of the lender or the borrower);
♦ recourse payments;
♦ at the end of a specified period (month, quarter).
According to the nature and method of payment of interest:
♦ interest-rate range;
♦ the payment of interest at the same time obtaining credit (discount).
Depending on the number of creditors:
♦ issued by one bank;
Depending on the quality characteristics
♦ high quality;
♦ loss ratio, which is to be written off.
The National Bank of Ukraine shares the credits for the standard, non-standard and bad. This classification is reflected in the current banking regulations.
The effectiveness of the bank's lending operations is defined by its credit policy. Credit policy guidelines form of loans. Credit investments for the Bank to be reliable and cost-effective.
Credit risk is determined perhaps permissible maximum risk per borrower. The task of the Bank is to achieve an optimal balance of profitability and riskiness of its lending operations.
In the financial markets, the Bank also provides banking services, which are extremely profitable, almost risk-free activity. The group includes banking, insurance, brokerage, consulting, information, audit and trust services.
Thus, banks - active subjects of the market. In performing its functions and exercising the operation, the bank provides the functioning of the financial market and its segments - monetary, foreign exchange market, the loan capital.