Bank accounting and audit

2.3 Foreign experience of operations with securities in bank.

In the second half of the 19th century, the situation in the developed countries began to change: the portfolio of the commencement of the industry was attracted to the areas of high savings: metallurgy, transport (railways), shipbuilding, and so on. In the same period, due to the lack of savings, such forms of entrepreneurship as the open joint-stock company have widespread, has accumulated thousands of non-large savings and has enabled individual entrepreneurs to quickly launch complex investment projects. the development of private banks is directly related to their involvement in the investment portfolio, including the acquisition of new prospective clients. Some banks suddenly began to engage in two types of activities, and many of them broke through the cyclic crisis of the 19th and 20th centuries. As a result, some banks began to divide banking institutions into "pure commercial banks" and "investment banks" .As a result of rigid rules in other countries, banks maintain their universality.

More than two hundred years have passed since the formation of the stock market, which is the instrument of financing the national economy and is a large-scale system of various intermediaries that performs various functions in the stock market.

It is preferable to study the experience of countries such as USA, Germany and Japan in the developed countries in studying the current state of the stock market and commercial banks and forming conclusions.

The banking system in the United States has long been influenced by British traditions. During this period, commercial banks were engaged in traditional banking operations: deposits and crediting businesses and the population. In operations with securities, only specializing companies were involved. However, as a result of the practice of establishing a widespread banking holding at the beginning of the 20th century, there were emerging institutions acting as investment banks. In the years before the stock market crisis of 1929, US banks took part not only in the purchase and sale of direct securities, but also for the purchase of securities. Depression associated with the stock market in 1929-1933.

The US banks have demonstrated shortcomings in the stock market. Thus, in 1933, the Law of Glass-Stigall, which is of particular importance in regulating the stock market activity of commercial banks, was created. According to him, commercial banks can not participate in the circulation of shares and bonds of industrial and trading companies. They are forbidden to invest in their shares in industrial and trading companies (with the exception of expenditures for the prevention of losing insolvency).

It should be noted that the prohibition on the purchase and sale of securities has never affected governmental securities. In this market, American banks have always been the leading investors and dealers.

Thus, today the size of government securities portfolio of the bank is about 13%. Over the years, the United States has tried to abolish the Glass-Steagall act. Especially they grew up in the 1980's. However, this process came to an end after the adoption of the Financial Modernization Act (Graham-Leach-Blaylee Act), which entered into force in March 2000.²²

Securities market participants in the United States include corporations and governments issuing securities, persons and corporations buying and selling a security, the broker-dealers and exchanges which facilitate such trading, banks which safe keep assets, and regulators who monitor the markets' activities. Investors buy and sell through broker-dealers and have their assets retained by either their executing broker-dealer, a custodian bank or a prime broker. These transactions take place in the environment of equity and equity options exchanges, regulated by the U.S. Securities and Exchange Commission (SEC), or derivative exchanges, regulated by the Commodity Futures Trading Commission (CFTC). For transactions involving stocks and bonds, agents assure that the ownership in each transaction is properly assigned to and held on behalf of each investor.

Supporting these transactions, there are three central securities depositories and four clearing organizations that assure the settlement of large volumes of trades. Market data consolidators inform investors and regulators in real time of the bid and offer prices of each security through one of two securities information processing systems. The basis for these transactions is controlled both through self-regulatory organizations and the two securities commissions, the SEC and the CFTC.

A stock exchange is a physical or digital place to which brokers and dealers send buy and sell orders in stocks (also called shares), bonds, and other securities. Price discovery is optimized by bringing together at one point in time and place all buy and sell orders for a particular security.

Securities traded on a stock exchange include stock issued by listed companies, unit trusts, derivatives, pooled investment products and bonds. Stock exchanges often function as "continuous auction" markets, with buyers and sellers consummating transactions at a central location, such as the floor of the exchange.

To qualify for trading on an exchange, a security must first be listed, having met the requirements of the listing exchange.^[15]Trade on an exchange is restricted to brokers who are members of the exchange. In recent years, various other trading venues, such as electronic communication networks, alternative trading systems and "dark pools" have taken much of the trading activity away from traditional stock exchanges.

Exchanges for equities, options, futures and derivatives include:

• 
  Equities - multiple exchanges (NYSE, Nasdaq, BATS Global Markets and others) compete for order flow from brokers with different products and pricing
  
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  Options on equities - similar to equities but including the Chicago Board Options Exchange and the International Securities Exchange
  
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  Futures and derivatives - the Chicago Mercantile Exchange, including its acquisitions of similar exchanges, is the sole venue for many derivative contracts, which must be cleared at the same exchanges
  
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  Energy related derivatives - the Intercontinental Exchange (which now owns the NYSE among a number of acquisitions) dominates energy related derivative trading, again with its own clearing arrangements.
  

US government debt does not trade on exchanges. Rather there are a number of primary dealers which buy directly from the government and resell to other broker-dealers and institutional investors.²³

This article covers those who deal in securities and futures in US markets. Securities include equities (stocks), bonds (US Government, corporate and municipal), and options thereon. Derivatives include futures and options thereon as well as swaps. The distinction in the US relates to having two regulators. Markets in other countries have similar categories of securities and types of participants, though not two regulators.

Investments in securities are an important aspect of banks' operations and account for about 20% of the total assets of the banking system. The leadership role in the American stock market is the investment companies known as pension funds, life insurance companies and institutional investors. They account for more than half of all circulating securities and more than 60% according to some estimates.²⁴

Under the rules in Germany, only credit institutions have the right to trade in securities owned by private investors. Today, there are more than 2000 in Germany. Credit institutions include private commercial banks, credit unions, savings and other banks (state-owned banks - mortgages, mail, etc.).

In terms of the value of the securities market and the importance of equity capital, Germany occupies the third place in the world and most of all in Europe. At the same time, the share of the German securities market makes up 2.5% of global capital market capitalization, which is related to the late arrival and development of the market, as well as the "bank" of the German market.

Banks played an important role in the financing of enterprises. Moreover, today bank loans are the main way of increasing the reproductive activity of enterprises. In this regard, in economic literature, the German financial system, as opposed to the securities market-based states, is a classic example of the country-based country of the financial system that separates the stock markets of Germany and the United States²⁵

German commercial banks carry out operations with securities both on the stock exchanges and on the interbank market. In the course of work, the exchange of deals is carried out on stock exchanges and in the interbank market, except for working hours. However, in Germany securities commercial banks are on the market. According to Professor Eukov Zhukov, the German stock market is characterized by the following features:

- The market of bonds is more developed when compared to the stock market. The ratio of bonds to shares in Germany is 10: 1.

- Almost all debts between borrowed funds account for commercial banks and the government. That is, they are the principal issuers of bonds.

Commercial banks are the main investors in the German stock market. 60-70% of the bonds in the stock market are in the share of commercial banks. In recent years, the amount of government bonds in the stock market has increased.

The main factor in boosting Japanese banks' stock market activity is the liberalization of interest rates on short-term loans at the end of the 70-ies of the 20th century and the general financial liberalization of the 20th century. This allowed the banks to diversify their financial products and provide a range of services in the stock market. In addition, the adoption of the 1993 Law on Financial System Reform allowed banks and companies to enter international markets with their securities. The Japanese stock market was conditional on two major groups you can learn. These include: stock market and debt securities market. In many developed countries, we can see that the stock market is much higher than debt securities. Like other industrialized countries in the world, the stock market plays a key role in Japan, because the regulatory framework for issuing bonds (for example, a system of reciprocal financial relations, which envisages the minimum standards of diversity of business activity and the size of its business activity) and a qualification system (this system requires a certain level of expertise from an enterprise transformed into a competent institution). The procurement system provides a comprehensive description of the financial condition of the company, which is the emitter of bonds, the availability of profits, powers and so on.

Custodian banks, prime brokers, transfer agents, and central securities depositories provide a medium for performing trades and providing safekeeping of securities.

Below we will analyze the dynamics of the structure of debt liabilities issued by commercial banks of the Russian Federation.