Home News Articles ApplyNow Contact

Articles > Gross loan

Gross Loan

12.03.2011 07:35:08

Liquidity of the credit institutions is directly related to the refinancing needs. Gross loan is the total amount of loans , refinanced by credit institutions subject to the Central Bank . The Central Bank, as the "lender of last resort", provides loans (credits) to commercial banks and other credit institutions, when the banks themselves have completely depleted their internal resources and are unable to maintain their solvency through other means. The Central Bank gives loans to commercial banks at the refinancing interest rate , which is minimal and may vary, depending on the type of services the given bank provides.

The main objectives of the Central Bank's monetary policy are stimulation of the growth of monetary operations and strengthening the inter-bank credit market. To achieve this goal, state authorities determine the optimal nominal interest rates or the level of the official nominal rate, adjust the mandatory cash reserve ratio and regulate the credit policy of Russian banks.

The central (issuing) bank performs regulatory functions for over the country's entire banking system, while commercial banks and other financial institutions provide credit services. There is a strong and unbreakable connection between them, governed by state rules and regulations.

Gross loan is the total amount of loans, refinanced by credit institutions subject to the Central Bank. The Central Bank, as the "lender of last resort", provides loans (credits) to commercial banks and other credit institutions, when the banks themselves have completely depleted their internal resources and are unable to maintain their solvency through other means. The Central Bank gives loans to commercial banks at the refinancing interest rate, which is minimal and may vary, depending on the type of services the given bank provides.

While establishing monetary policy for the current year, each country's Central Bank considers the economic situation of that country and in the wider world. As inflation rises, the Central Bank undertakes an expansion of credit, making loans more accessible to commercial banks. Regulation of refinancing rates should ideally reflect the optimal ratio between the tempo of investment and that of inflation.

Among the tools of monetary policy are:

  1. Credit crunch. The state regulates the flow of credit money to a particular bank
  2. Refinancing of commercial banks. Refinancing operations are extremely important in the regulation of interest rates of commercial banks
  3. Minimum reserves policy. The Central Bank of the RF determines the minimum amount of reserves for all banks, whether in deposits or in other assets
  4. Trading of government securities and stocks


Tags: [gross profit rate] [gross loan balance] [gross loan amount] [gross loan portfolio]

Courage is being scared to death, but saddling up anyway.
© John Wayne

Sections

News
Articles
      ❐ Gross loan
      ❐ Loans online
      ❐ Glossary

Advertising

Popular

2011-2016 © Gross Loan