The release of this document once every three years is stipulated by the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)".
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The national economic growth, improved households’ living standards, and the achievement of inflation targets are not possible without up-to-date financing mechanisms and a supportive environment for enterprises and organisations across all economic sectors.
To enable this, the Bank of Russia in its capacity of the mega-regulator has prepared a strategic document which covers the whole range of the financial market operation and draws on all existent development strategies for the banking sector, insurance activities, pension system and other, in the context of the current situation.
The new strategy sets the following top-priority objectives: to raise the living standards of the Russian citizens, to ensure growth and development of the real sector of the Russian economy, and to create conditions stimulating growth in the financial sector.
To achieve these objectives, the Bank of Russian and other stakeholders intend to focus on several areas, the first of which is financial services consumer protection, financial inclusion issues and financial literacy improvement for Russian households.
The Bank of Russia’s set of measures provides for the inclusion of financial literacy as a mandatory secondary education subject, the installing of the financial ombudsman institute, which will be in charge of sorting out financial disputes among households and financial organisations, the creation of special financial products and services addressed to various groups of the population, and also the explaining of how to use these products.
Besides, the Bank of Russia intends to inform consumers on the activities of unscrupulous financial intermediaries and financial pyramids, and to introduce additional requirements for advertising. In this connection, the document says that, ‘Public advertisement of financial products and services not designed for unqualified users shall be radically limited’.
The new strategy pays special attention to financial inclusion, which implies that all legally capable individuals and also small and medium-sized businesses shall have a guaranteed set of high-quality financial services on an ongoing basis.
Given the vast territory of the country, the Bank of Russia views the introduction of modern information technologies as an essential condition for achieving financial inclusion. Stimulating cashless transactions in the national currency will be another priority of the mega-regulator.
The Bank of Russia considers its activities to counter financial misconduct, conducted jointly with law-enforcement and judicial authorities, as one of its top priorities.
According to the authors, the unavoidability of punishment for any breach of law, if observed, comes as a more effective means to prevent any emerging misconduct practices, compared to a system of regulation which is enforced through mechanical constraints.
The Bank of Russia proposes that a dedicated liability system be applied for a financial institution’s owners, executives and other staff. This would enable corrective action against a noncompliant institution, waiving license revocation as the sanction of last resort.
The Bank of Russia also intends to improve its financial regulation system, softening and appropriating regulatory burden on a pro rata basis. The requirements are expected to vary across systemically important institutions, small organisations and other companies, based on their operational risks for the financial sector.
Information technology would need to be rolled out vigorously to reduce financial intermediaries’ costs related to preparation of various reporting. ■