Central Bank of Russia

The Central Bank of the Russian Federation (Центральный банк Российской Федерации), which brands itself as Bank of Russia (Банк России) and is also commonly referred to in English as the Central Bank of Russia (CBR),  is the central bank of the Russian Federation. The bank was established on July 13, 1990. It claims the legacy of the State Bank of the Russian Empire (1860-1920) and of the Soviet Gosbank (1921-1992), even though both institutions covered a significant larger territorial scope.

The bank is headquartered on Neglinnaya Street in Moscow. Its functions are described in the Constitution of Russia (Article 75) and in federal law.

History


The Central Bank of the Russian Federation (Bank of Russia) was established 13 July 1990 as a result of the transformation of the Russian Republican Bank of the State Bank of the USSR. It was accountable to the Supreme Soviet of the RSFSR. On 2 December 1990, the Supreme Soviet of the RSFSR passed the Law on the Central Bank of the Russian Federation (Bank of Russia), according to which the Bank of Russia has become a legal entity, the main bank of the RSFSR and was accountable to the Supreme Soviet of the RSFSR. In June 1991, the charter was adopted by the Bank of Russia.

On 20 December 1991 the State Bank of the USSR was abolished and all its assets, liabilities and property in the RSFSR were transferred to the Central Bank of the Russian Federation (Bank of Russia), which was then renamed to the Central Bank of the Russian Federation (CBRF, Bank of Russia).

Since 1992, the Bank of Russia began to buy and sell foreign currency on the foreign exchange market created by it, establish and publish the official exchange rates of foreign currencies against the ruble.

On 15 July 2024 the CBRF closed the statistics of the over-the-counter currency market; at the time it was under pressure from international sanctions over the Russian invasion of Ukraine.

Role and duties
According to the constitution, it is an independent entity, with the primary responsibility of protecting the stability of the national currency, the ruble.

Before 1 September 2013, it was the main regulator of the Russian banking industry, responsible for banking licenses, rules of banking operations and accounting standards, serving as a lender of last resort for credit organizations. After pointed date functions and powers of CBR were significantly expanded and the central bank received the status of a mega-regulator of all financial markets of Russia.

It holds the exclusive right to issue ruble banknotes and coins through the Moscow and St. Petersburg mints, the Goznak mint. The central bank issues commemorative coins made of precious and non-precious metals as well as investment ones made of precious metals, which are distributed inside and outside the country. In 2010, in honor of its 150th anniversary it issued a 5-kilo commemorative gold coin Alexander II.

Under Russian law, half of the bank's profit must be channeled into the government's federal budget. The Central Bank of Russia is a member of the BIS.

The Bank of Russia owns a 57.58% stake in Sberbank, the country's leading commercial bank. The Bank of Russia also owns a 100% stake in Russian National Reinsurance Company (RNRC), the biggest national reinsurance company. The RNRC was established in July 2016 to prevent possible problems with reinsurance of large risks under international sanctions during the Ukrainian crisis, like constructing the Crimean Bridge.

Anti-fraud activities
A key prospective witness in improper financial affairs was Lyubov Tarasova (Любовь Тарасова) who was a senior auditor for the Central Bank of Russia and worked for the "Unicom" ("Юникон") auditing firm which had been established on 20 August 1991 and was responsible for "checking the correctness of the documentation and the essence of business transactions that are in doubt" ("проверка правильности документального оформления и сущности хозяйственных операций, вызывающих сомнение"), but was stabbed to death in her apartment in Moscow on 15-16 October 1997.

In 2017, within the framework of a joint anti-phishing project of the Bank of Russia and search engine Yandex, a special check mark (a green circle with a tick and 'Реестр ЦБ РФ' (Bank of Russia Register) text box) appeared in the search results, informing the consumer that the website is really owned by a legally registered company licensed by the Bank of Russia.

Governors
The President of the Board of Directors of the Central Bank is the head of the central banking system of the Russian Federation. The Governor is chosen by the President of Russia; and serves for four-year-terms after appointment. A Governor may be appointed for several consecutive terms (Sergey Ignatyev was the Governor of the Central Bank for 11 years, and he was appointed three times, in the longest serving term in post-soviet Russia).

Subsidiaries
The Central Bank of Russia holds directly significant participatory interests in a number of Russian companies: Additionally, the Bank of Russia held earlier interests in some other Russian organizations. In particular, after the liquidation of Gosbank (State Bank of the USSR), the CBR beneficially acquired complete or controlling interests in five so-called "Russian Foreign Banks" (until 1991 – "Soviet Foreign Banks"): All of them were members of the USSR Vnesheconombank system and were transferred to the CBR in 1992 by the Resolution of the Presidium of the Supreme Soviet of Russia. For over five years – 2000 to 2005 – all stocks of the Russian Foreign Banks were being purchased from the Bank of Russia by VTB Bank. As part of the financial support to credit institutions, the Bank of Russia invests in them through the Banking Sector Consolidation Fund and acquires (on a temporary and indirect basis) shares in the equity of such banks. The first project of this kind was Otkritie FC Bank, in summer 2017.
 * Sberbank of Russia (50%+1 voting share of the stock);
 * Moscow Exchange (11.779% of the stock);
 * Russian National Reinsurance Company (100% of the stock);
 * Trust company of the Banking Sector Consolidation Fund (100% of the stock);
 * Rosincas (Russian Association of Cash-in-transit).
 * VTB Bank (99.99% of the stock – until 2002, now - 60.9% owned by The Federal Agency for State Property Management (Rosimushchestvo) );
 * Donau Bank AG, Vienna;
 * East-West United Bank, Luxemburg;
 * Eurobank, Paris;
 * Moscow Narodny Bank, London;
 * Ost-West Handelsbank, Frankfurt am Main.

Politics
[[File:Russian inflation rate.webp|thumb|300px| {{legend|#EE220C|Russian inflation rate}}

]] Russian bonds.webp to tame inflation during their wars (Russo-Georgian War, Russo-Ukrainian War, 2022 Russian invasion of Ukraine)

]] In December 2014, amidst falling global oil prices, international sanctions during the Russo-Ukrainian War, capital flight, and fears of recession, the bank had increased the one-week minimum auction repo rate up by 6.5 points to 17 percent. This caused a run on the ruble, and on 29 January, the bank decreased the rate by two points to 15 percent.

In January 2015, the head of monetary policy, Ksenia Yudayeva, a proponent of strict anti-inflation policy, was replaced by Dmitry Tulin, who is "seen as more acceptable to bankers, who have called for lower interest rates".

In response to the 2021–2022 Russo-Ukrainian crisis, multiple countries imposed economic sanctions against Russian banks. On 22 February 2022, US president Joe Biden announced restrictions of activities by US citizens involved with the Bank of Russia and others. In March, the Bank of International Settlements suspended the Bank of Russia. In March 2022, the Depository Trust & Clearing Corporation blocked Russian securities from the Bank of Russia and Russia's finance ministry. At the end of May 2022, three months into the invasion of Ukraine, the central bank cut interest rates in an effort to prop up the increasingly isolated Russian economy, suffering shortages and supply chain issues. The inflation rate rose to 17.8 percent in April. Also the ruble reached its strongest level against the U.S. dollar in four years, hurting exports.

Sanctions also included asset freezes on the Russian Central Bank, which holds $630 billion in foreign-exchange reserves, to prevent it from offsetting the impact of sanctions. On 5 May 2022, President of the European Council Charles Michel said: "I am absolutely convinced that this is extremely important not only to freeze assets but also to make possible to confiscate it, to make it available for the rebuilding" of Ukraine.