Gosbank
History
Gosbank, or the State Bank of the Soviet Union, was the central bank of the USSR from 1922 until its dissolution in 1991. It was responsible for the implementation of monetary policy, the issuance of currency, and the regulation of the Soviet Union's financial system.
The bank was established on December 15, 1922, by a decree of the All-Russian Central Executive Committee (VTsIK). It was initially called the "Russian State Bank" but was renamed to "State Bank of the USSR" in 1923 when the USSR was officially formed. The bank was given a monopoly on the issuance of currency and was tasked with centralizing and managing the country's financial resources.
In the early years of the Soviet Union, Gosbank played a crucial role in the implementation of the New Economic Policy (NEP). This policy, introduced by Lenin in 1921, allowed for a limited amount of private enterprise in an attempt to recover from the economic devastation caused by the Civil War.
Structure and Function
Gosbank was a state-owned institution and was directly controlled by the Soviet government. The bank's operations were overseen by a board of directors, which was appointed by the Council of Ministers. The Chairman of Gosbank was considered one of the most powerful positions in the Soviet Union, often held by influential members of the Communist Party.
The bank's primary function was to implement the monetary policy of the Soviet Union. This involved controlling the money supply, setting interest rates, and managing the country's foreign exchange reserves. Gosbank also had the exclusive right to issue the Soviet Union's currency, the Ruble.
In addition to its monetary policy functions, Gosbank also played a significant role in the Soviet Union's planned economy. The bank was responsible for allocating financial resources to various sectors of the economy in accordance with the country's Five-Year Plans. This involved providing loans to state-owned enterprises and managing the country's savings accounts.
Role in the Soviet Economy
Gosbank's role in the Soviet economy was unique compared to central banks in market economies. In a market economy, a central bank primarily uses monetary policy to influence economic activity. In contrast, Gosbank was an integral part of the Soviet Union's planned economy, directly involved in the allocation of resources and the financing of economic activity.
One of Gosbank's main tasks was to provide loans to state-owned enterprises. These loans were not based on market interest rates, but were instead determined by the state's economic plans. This meant that Gosbank's lending activities were not driven by profit, but by the economic priorities of the Soviet government.
Gosbank also played a significant role in managing the savings of Soviet citizens. The bank operated a network of savings banks across the country, which offered deposit accounts to individuals. These savings were then used to finance the state's economic activities.
Dissolution and Legacy
With the dissolution of the Soviet Union in 1991, Gosbank was also disbanded. Its functions were taken over by the Central Bank of the Russian Federation, which was established in 1990. The transition from a planned economy to a market economy required significant changes in the country's financial system, including the establishment of a new central bank.
Despite its dissolution, Gosbank's legacy continues to influence Russia's financial system. Many of the practices and structures established by Gosbank were carried over to the Central Bank of Russia. Moreover, the experience of managing a planned economy has shaped the approach of Russian policymakers in managing the country's economy.