At the heart of the study of the discipline “Banking law” is the banking system C. In General, the banking system is understood as a set of different types of banks and banking institutions, through which funds are mobilized and provided to the clientele various services for receiving deposits and providing loans. This system is internally organized, interconnected, has a common goal and objectives.
The banking system exists in any country in a certain historical period and is an integral part of the credit system of the state. For the normal functioning of the banking system must meet the following requirements.
There should be a sufficient number of operating banks and credit institutions in the country. The system should be considered as constantly developing and constantly quantitatively and qualitatively changing.
There should be no unnecessary elements in the system. In this sector of the economy, there should be no banking institutions that have not started banking operations within the prescribed time limits, do not have properly issued licenses for banking operations or are not formed in accordance with the current legislation and the act of the founder on the establishment.
The country has a Central Bank, which acts as the main coordinator of credit institutions and effectively performs the functions of management of monetary and financial processes in the economy.
Along with the Central Bank there are a variety of commercial banks that cover all areas of the national economy
and foreign economic relations, carry out a wide range of banking and financial services for legal and physical-
There are banks and credit institutions in the country, which are not limited to the accumulation and distribution of funds of enterprises and organizations, but also contribute to the accumulation of capital, actively interfere in all spheres of the economy.
The banking system is part of a broader system — the economic system of the state.
Thus, banks are organically woven into the overall mechanism of regulation of economic life, closely interact with the budget and the tax system, the pricing system, with the policy of prices and incomes, with the conditions of foreign economic activity. However, the banking system is not a mechanical Association of various banks, but a specific economic structure that has a special purpose and performs special functions in the economy of the state.
The banking system is a legally defined, well-structured set of financial institutions that are engaged in banking activities. The specificity of the banking system is manifested in its functions, namely:
(a) money creation and regulation of the money supply;
b) transformational function;
C) stabilization function.
The function of creating money and regulating the money supply is that the banking system promptly changes the mass of money in circulation, increasing or decreasing it in accordance with the change in demand for money. This function involves all parts of the banking system (NBU and commercial banks), it applies to all areas of banking.
The transformational function is that banks, mobilizing free funds of some business entities and transferring them to other entities, have the ability to change (transform) the amount and timing of cash capital and financial risks.
The stabilization function ensures the constancy of banking and money market. Given that banking activities are characterized by high risks, that banks operate in a constant and increased threat of money loss and bankruptcy, risk management is an important task not only of individual banks, and the entire banking system. Banks, acting as intermediaries of the money market, take responsibility to investors for the Bank risk of their borrowers. The stabilization function of the banking system is ensured through the adoption of laws and other
regulatory acts regulating the activities of all its links, and the creation of an appropriate mechanism for monitoring and supervision of compliance with both the current legislation and the activities of banks.
The formation of the banking system began with the emergence of the first banks and dates back to the XV century, when the necessary was a network of special institutions regulating the intricate monetary circulation and carried out on a larger scale credit operations.
The concept of “Bank” comes from the Italian “banco” and means “table”, “bench money changers”. In ancient times, in Northern Italy in the areas where there was a brisk trade, set up special tables and money changers engaged in the purchase and sale of exchange of various coins.
In Europe, the birth of banking and the emergence of the first moneylenders associated with the princely courts and trading houses of the late middle ages. The maintenance of the princely courts in luxury, extravagance, the need to have a regular army caused an increasing need for Finance. Princes were ready to get into debt for this, but Christians “canonical prohibition on charging interest” forbade to take them. The money was considered “poor harvest”, the accrual of interest-usury, for this threatened with large fines. Into this gap rushed the Jews, which many countries have restricted the practice of crafts. The Jews were the mediators in the courts, mined for princes needed money, which led to the emergence of the first private banking houses.
On the other hand, rozpowszechniany of banking in Europe had become large and foreign traders who like trading the bankers in addition to commercial transactions carried out as an operation for exchanging money and signed the Bank agreement. Subsequently, the banking operations of merchants became their main business.
Later, during the manufacturing stage of capitalism, there were
Bank houses that provided credit to industrial and commercial capitalists at a moderate interest rate.