The International Monetary Fund oversees the world monetary system.

Not only the retention of a significant part of assets in liquid form is taken into account, for example:

rapid sale of assets to the central bank (mostly in the form of government securities) or sale on the secondary market of the relevant types of assets; raising borrowed funds from other banks (usually for a short period), often in the form of short-term loans; concluding agreements on opening credit lines for the appropriate amount; raising funds borrowed from the central bank in order to meet liquidity needs in the short or long term.

The central bank plays the role of the lender of last resort.

Determining the level of liquidity of the bank, it is necessary to take into account the following factors:

volume of time deposits, ie it is necessary to determine what share of bank deposits can be considered as basic deposits (those that will remain at the disposal of the bank) and what part of deposits will probably be withdrawn from the accounts, often without prior notice; the presence of assets in liquid form or assets that can be quickly converted into liquid (the higher the percentage, the better the liquidity); the degree of dependence of the bank on funds purchased on the interbank market or borrowed funds of the central bank (the higher the degree of this dependence, the riskier the liquidity of the bank); the volume of the bank’s liabilities for future loans (the larger their volume, the riskier the bank’s liquidity); the ability of the bank’s management to manage the level of liquidity, as well as the bank’s compliance with internal policies and principles of liquidity management.

The bank’s liquidity analysis consists of two parts:

clarification of the bank’s compliance with the established indicators and liquidity standards; conducting an expert assessment according to the following criteria.

Rating 1 (strong):

high level of liquid assets; a liquidity ratio that exceeds all established standards is constantly maintained; high level of attracted funds in the form of fixed deposits; the ability to quickly raise funds for a modest fee; liquidity ratios are better than other banks. Rating 2 (satisfactory): sufficient level of liquid assets; liquidity standards of assets are constantly observed; the level of attracted funds in the form of fixed deposits is higher than average; there is a certain possibility to raise funds on the first demand; liquidity ratios are higher than average compared to other banks.

Rating C (mediocre):

currently the level of liquid assets is at least sufficient; regulatory requirements for asset liquidity are met; acceptable level of basic deposits in relation to the total amount of deposits; https://123helpme.me/write-my-lab-report/ limited ability to raise funds immediately; liquidity ratios are average compared to other banks.

Rating 4 (marginal):

there is a certain lack of liquidity; non-compliance with asset liquidity ratios in certain periods of time; dependence on borrowed funds or non-permanent sources of funding; inability to immediately raise borrowed funds, except for raising funds through the central bank; liquidity ratios are consistently lower than the average of other banks.

Rating 5 (unsatisfactory):

significant shortage of liquid assets; liquidity standards of assets are not constantly observed; significant dependence on funds that are not major deposits; lack of opportunity to raise funds, except for raising funds through the central bank; extremely low liquidity ratios compared to other banks.

When determining the overall rating of the bank’s liquidity, violations of the established liquidity standards (one or more at a time) must be taken into account. At the same time, the state of the bank’s liquidity moves to the category of “unsatisfactory”.

Analysis of administrative and economic management (management)

When assessing the effectiveness of the bank’s management, it is impossible to use the same ratios used in the analysis of capital, asset quality, income and even liquidity. Management methods can be assessed by the rating system, taking into account the rating of the previous four areas, as the effectiveness of management directly depends on the quality of assets, capital, income and liquidity of the bank.

In case of deterioration of the bank’s performance, it is first necessary to find out the conditions under which this deterioration was caused, even if the management of the troubled bank is carried out by a new administration, which is not responsible for the weak financial position of the bank.

In addition to the rating of capital, asset quality, revenue and liquidity, which must be taken into account in the analysis of bank management, it is necessary to pay attention to the following factors:

the bank’s management must demonstrate technical competence, organizational and administrative skills (which can be identified during the approval of the bank’s managers by the central bank); the bank’s management must be responsible for compliance with banking legislation and established norms and standards; the bank’s management must be able to respond immediately to changes in the economy, in particular in the banking system; the bank’s management must bear full responsibility for the development and compliance with the bank’s internal rules of operation; the bank’s administration needs to take care of the constant improvement of the level of qualification of its employees to improve the bank’s work; the bank’s management should be responsible for the revealed selfish actions and especially for granting loans on favorable terms to the bank’s employees; the bank’s management must fully satisfy the region where the bank is located in banking services.

Given that the assessment of administrative and economic management (management) is the most subjective among other aspects of the rating system, in addition to taking into account the previous four components, it is necessary to conduct an expert assessment of the bank’s management according to the following criteria.

Rating 1 {strong):

all other components have an excellent or satisfactory rating; impeccable compliance with laws and regulations; availability of adequate internal rules of the bank, which are fully complied with; the integrity, competence and ability to manage the bank are obvious.

Rating 2 {satisfactory):

most components are at least satisfactory; general observance of laws and regulations; the rules of operation are mostly adequate and properly enforced; lack of obvious shortcomings in the methods of bank management.

Rating 3 {mediocre):

most components of the system are mediocre or satisfactory; the requirements of current legislation and regulations are not partially met; it is necessary to improve the developed rules of the bank and their compliance; there are some concerns about management methods and doubts about the competence of bank managers.

Rating 4 {marginal):

the rating of other components fluctuates between mediocre and unsatisfactory; there are serious violations of the law and (or) non-compliance with regulations; there is no clearly established procedure or it is not followed; obvious facts of fraud, unsatisfactory management were revealed.

Rating 5 {unsatisfactory):

the rating of other components of the system is marginal or unsatisfactory; serious violations of legislation and (or) regulations were revealed; there are no rules of work or they are not followed; poor management is obvious or the competence of the management is in doubt, the facts of fraud are revealed.

06/29/2011

Conceptual bases of balance of payments. Abstract

The state of the state balance of payments is one of the basic indicators for determining the directions of currency regulation policy. It largely characterizes the international economic position of the state, gives an idea of ​​its financial capabilities and credit needs of foreign financial institutions, in particular in IMF loans

The balance of payments is a structure of macroeconomic indicators that reflects the results of foreign economic activity of the state for the relevant period and sources of its financing.

The term “balance of payments” is mostly associated with flows of goods and services, ie with the trade balance. However, foreign economic relations are more differentiated. They are reflected in a whole system of accounts, covering all receipts from abroad and payments abroad. Transfer of wages of relatives working abroad to the homeland, various types of transfers (gratuitous receipts and expenditures), overflows and accumulations of capital, changes in interstate mutual debt, etc. – all these are components of the country’s balance of payments.

The state of the state balance of payments is one of the basic indicators for determining the directions of currency regulation policy. It largely characterizes the international economic position of the state, gives an idea of ​​its financial capabilities and credit needs of foreign financial institutions, in particular in IMF loans.

Determining the right approaches to regulating the balance of payments, ways to cover its deficit, the strategy of using reserves helps to increase the currency liquidity of Ukraine, which is one of the determining factors in maintaining and developing its statehood.

Until 1993, the balance of payments in Ukraine in the form typical of international practice was not compiled. Data on the country’s international requirements and obligations were provided in separate forms in the country’s trade balance, financial resources balance and currency plan. In accordance with the joint Resolution of the Cabinet of Ministers of Ukraine and the National Bank of Ukraine of September 17, 1993, the National Bank of Ukraine assumed responsibility for compiling the generalized balance of payments of Ukraine. The requirements of the International Monetary Fund are also taken into account.

It will be recalled that the International Monetary Fund, the statute of which provides for the formation of a multilateral system of payments on current settlements, achieving balance in the balance of payments of member countries, etc., was established in 1944 in Bretton Woods at an international financial and economic conference. A mechanism for regulating the balance of payments of IMF member countries was developed, as well as the role of their central banks in the world and national monetary systems was determined. Ukraine became a member of the IMF in September 1992.

The International Monetary Fund oversees the world monetary system. The “Principles of Supervision” approved by the Fund in 1977 state that the assessment of member countries’ exchange rate policies should be based on a comprehensive analysis of the member state’s overall economic situation. At the same time, both foreign and domestic economic policy measures should help stabilize the balance of payments.