Key rate of the Central Bank
We do not have state banks. All banks belong to individuals.
Commercial banks use several sources of financing their activities:
Upon point, the commercial bank lens resources from the regulator — the Central Bank of the Russian Federation. Absolutely, most of the funding of commercial banks is developing from attracting money regulator. In the future, these funds will be aimed at issuing loans — for individuals and legal entities.
If the key bet grows — banks freeze their activity in the market. Rising growth involves a decrease in the profitability of financial institutions, the emergence of additional risks associated with the irrevocate of loans. The key rate indicator is the direct indicator of the state of the economy at the moment. Regulator, increases the key bid to prevent the economy overheating and create additional inflation expectations. A large amount of money and cheap loans pushing price and overproduction to growth.
The higher the key rate indicator is the higher the percentage of the loan. Since the bank uses borrowed resources.
Increased key rates directly affects the size of long-term loans. For example, a mortgage or loan per car. During this period, it is better to revise financing plans. If the percentage of external borrowing is growing, banks begin to experience the need for additional resources. Support liquidity and increase lending volumes through deposits. Cancel interest under more attractive conditions. For the Bank’s client, this is a signal — with an increase in loan rates, the percentage of deposits is almost certainly incremented. As a rule, the percentage of old placed deposits is not revised. The optimal solution for the client, terminate the contract by the old deposit and conclude a new agreement. With more attractive interest rates.
With an increase in the key rate, almost certainly the financial institution will revise the terms of the loan agreements. The law gives the right to one-sided increase in the interest rate. Provided if the «principle of good faith and intelligence» is observed. In practice, this means that the rate can be increased — but without sharp oscillations. The legality of increasing interest rates under the contract can only be challenged in court.
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