Basic principles for setting limits. Limit (Limit) is What does the term fixed limit mean

When concluding a transaction, the dealer must be guided by the limits set to limit risks. This purpose is served by computer software - the dealer uses a personal computer located at the workplace, setting the parameters and displaying the allowed limits. In the absence of a computerized banking system, dealers use manual daily limit printouts. In addition, periodic monitoring of compliance with the limits is carried out by higher employees, as well as special controllers (compliance officers). It is customary to distinguish two main types of risk that are covered by operating limits:

Credit risk associated with external trading limits;
- financial risk, which corresponds to internal limits.

Credit risk (credit risk or settlement risk) - the risk of non-delivery of funds by the counterparty of the transaction. The situation of non-delivery of funds may arise as a result of a number of reasons: the bankruptcy of the counterparty, its errors in processing payments or unwillingness to pay for one reason or another (del credere risk) or as a result of the actions of the counterparty's state that prohibits or restricts transfers abroad (political or country risk) .

Credit risk is the most painful for a bank, as it can lead to irretrievable losses of significant amounts of millions of dollars (for example, in the event of a military coup and the nationalization of a counterparty bank).

To limit the risk of non-delivery of funds, external limits are set for counterparty banks. They are usually developed and reviewed by the bank's Correspondent Banking or Banking Relations Dept. and approved by the Credit Committee, which includes the bank's senior management. External limits are divided into net limits and covered limits.

Net limits (clean limits or blaps limits) mean that the bank's management assumes the risk of non-delivery of a certain amount of currency for the type of transactions with this counterparty. Trading limits for a counterparty are set by types of operations (product limits):

For current conversion operations - forex spot limit;
- for forward conversion operations -forward limit;
- for deposit operations - deposit limit, etc.

The closer the settlement date with the counterparty, the lower the degree of credit risk for the bank. Therefore, the limit on conversion transactions on spot and on attracted deposits is usually higher than on forward transactions and placed deposits. This increase in risk over time can be expressed as follows:

For example, a commercial bank AAA may have approximately the following limit scale for bank BBB:

Spot FX limit = 10 MIO USD, meaning that the AAA bank in each this moment time can have an open position in the purchased or sold currency (exposure) in the bank BBB in the amount not exceeding the equivalent of 10 million US dollars (the limit can also be expressed in national currency);
- forward limits: up to 1 mth = 4 MIO USD up to 3 mth = 2 MIO USD up to 6 mth = 1 MIO USD;
- deposit limits: for placement up to 1 mth = 3 MIO USD up to 3 mth = 1 MIO USD for borrowing up to 1 mth = 7 MIO USD up to 3 mth = 4 MIO USD.

In many banks there is a general limit on conversion transactions, which includes a limit on spot transactions and forward transactions. If, for example, bank AAA has a $10 million conversion limit on bank BBB and entered into a 3-month forward transaction worth $3 million, this means that during these three months, banks will be able to carry out conversions in the amount of the remaining limit - no more than 7 million dollars, that is, the total limit was reduced by 3 million dollars.

There are many methods for setting limits for counterparties. When setting a limit for a new counterparty bank, the Correspondent Relations Department analyzes the following documents.

Bank's Annual Report, containing the Balance Sheet and Profit & Loss Account, preferably certified by world-famous audit firms: Arthur Andersen, Ernst & Young, Coopers and Lybrand, Deloit Touche, Prize Waterhouse , KPMG, etc. Typically, banks publish annual reports in the form of separate booklets after the completion of the work of auditors (in March-April of the new year).

The balance sheet and profit and loss account are analyzed by drawing up special ratios (ratios) - liquidity indicators (for example, the ratio of current assets to current liabilities), the bank's profitability (the ratio of profit to assets), etc.

Particular attention in the analysis is paid to the size of the bank's own funds: authorized capital, profits and reserves. The amount of capital shows how the bank will be able to pay in the event of a difficult financial condition and characterizes the reliability of the bank. The larger the size of the authorized capital of the bank, the greater the limit from the other bank, he can count on. The capital adequacy ratio is also calculated - the ratio of the authorized capital to the amount of assets; in accordance with the recommendations of the Bank for International Settlements (Basel), the optimal ratio is 8%.

Constituent documents (charter, list of shareholders or shareholders), characterizing the status of the bank. By status, banks are divided into:

Head banks (head-quarters),
- branches (full branches), subsidiary banks (subsidiaries).

The limit on subsidiary banks is usually less than on parent banks, but if two banks of the same financial position are compared, of which one is a subsidiary of a well-known reliable bank, then the limit on it may be higher than on a bank that does not have branches, other things being equal.

Bank rating and country of location. There are various international agencies and publications that evaluate the creditworthiness and reliability of banks and countries. For example, well-known American firms - Moody "s and Dan & Bradstreet periodically evaluate the rating of banks, the magazines "Institutional Investor", "Rating", compile lists of the creditworthiness of countries and banks; in Russia, this function is performed by the newspapers "Kommersant" and "Economics and Life" Reputation and nature of relationships with other banks When setting and revising limits, employees of correspondent relations departments carefully collect information about the state of affairs in a particular bank, analyze all press publications, rumors, etc. In large foreign banks, limits are divided into several groups by degree of generalization:

Global limits (for example, limits for Europe, North America, Asia, etc.);
- country limits (for example, the European limit is divided into smaller country limits);
- limits directly on counterparties - banks and financial companies mentioned above.

Such hard-coded limits require the credit lines to which they correspond to be used by counterparties. In case of systematic non-use of the line, the limit may be reduced or withdrawn altogether and transferred to another bank of the given country, which expresses its intention to regularly conduct dealing operations. This practice is extended by large foreign banks when setting net limits to Russian banks.

Covered limits (Margin Cover limits) mean that the risk of non-delivery is covered by the counterparty's funds held in the bank as collateral or pledge, that is, insurance coverage for settlements under the transaction. This type of limit is often used to start working with small and unknown banks, as well as with non-banking institutions - companies, legal entities and individuals, setting net limits for which the management of a large bank considers risky.

This happens as follows: a large AAA bank, for example, signs a special Margin Trading Agreement or Pledge Agreement with a little-known bank BBB, according to which the funds placed in the AAA bank (in the form of an interbank deposit, or transferred to an investment account, or given in trust management, etc.) are considered as collateral for settlements on a number of current and urgent foreign exchange transactions. At the same time, for conversion operations, if netting is not used, the amount of collateral is equal to the size of the maximum possible open position (exposure) between the two banks. Funds serving as collateral must be held for a period longer than the spot date for current FX transactions.

After signing the agreement, Bank BBB places a monthly deposit of USD 5 million with AAA Bank, while receiving a limit on conversion operations in the amount of USD 5 million. Within a month, Bank BBB can make conversion transactions with Bank AAA for a total of 5 million dollars (either one or several transactions).

The inconvenience for Bank BBB is that it quickly exhausts the limit - one trade for 5 million dollars and it will have to close the position in another bank.

It is much more convenient to make conversion transactions against insurance coverage using netting for final settlements. For example, if banks AAA and BBB practice netting in settlements, then the amount of collateral of $5 million allows bank BBB to repeatedly open and close a position within $5 million with bank AAA:

5.000.000USD/DEM
- 5.000.000 USD/DEM + 2.000.000 USD/DEM
- 3.000.000USD/DEM
- 1.000.000USD/DEM
- 2.000.000USD/DEM

The remaining position on transactions between the two banks is in the range of $5 million and allows the banks to make net transfers in favor of each other. At the same time, if Bank BBB suddenly goes bankrupt, then, in accordance with the agreement, Bank AAA will reduce its deposit by the 2 million dollars due to it.

A number of banks offer small banks, after placing a pledge, to use a "shoulder" (margin) when opening a bilateral currency position, which increases the size of the position. For example, the Margin Trading Agreement between AAA and BBB banks provides for a leverage of 1:10. This means that during the day the BBB bank has the right to open and close positions on conversion transactions with the AAA bank in the amount of 10 times the margin. At the same time, on the value date, the size of the open position between the two banks must be within the margin amount in order to make final settlements, taking into account netting.

This procedure is beneficial to both parties: for the BBB bank, it makes it possible, using a fairly small amount of the security deposit, to trade throughout the day, and for the AAA bank it provides additional business, since the BBB bank calls him for quotes on which he conducts transactions.

For example, if bank BBB places an insurance deposit of $0.5 million with bank AAA, then during the day it can hold an open position of $5 million, closing it at the end of the day:

Financial risk is the risk of loss due to unfavorable market conditions: adverse changes in the exchange rate, interest rates, etc. The risk is regulated by setting internal operating limits, which can be divided into general banking and personal limits for currency dealers.

Limits of open currency position on conversion operations. In turn, they may vary depending on the validity period: intraday limit of open position - regulates the size of the maximum possible open currency position of the bank for operations during the day. For example, Bank AAA during the day at any given time may have an unclosed foreign exchange position in the amount of $50 million. This limit is usually regulated by the Central Bank of the country to reduce the risk of possible bank losses. In Russia, the Central Bank of the Russian Federation does not currently regulate this limit, but the management of many commercial banks sets it independently.

The general limit for the bank can be subdivided into personal daily open position limits for dealers in different currencies. For example, a daily open position limit of $50 million for a Russian bank can be divided between dealers in the following proportion:

35 million for the dollar/ruble (USD/RUR) market dealer;
10 million for a dealer in dollar/mark transactions (USD/DEM);
5 million for a soft currency dealer.

Personal limits for dealers are set by order of the bank. In large banks, several dealers operate on the same market (for example, on USD/DEM transactions), and each may have its own personal limit, the size of which! depends on experience, qualification and results of work (performance) of the dealer.

Night open position limit (o/p open position limit) sets the maximum possible open position limit allowed to be carried over to the next value date. Usually it is an order of magnitude smaller than the daily limit and is used to maintain strategic positions. for which the risk is much higher.

In Russia, the Central Bank sets this type of open position limit for commercial banks. The limit is set based on the size of the authorized capital. the amount of the bank's balance and activity in the foreign exchange market.

Similar to the daily limit, the night limit can also be divided into personal limits for dealers working with different currencies.

Loss limit (stop-loss limit or s/1) - sets the maximum amount of loss when closing a currency position due to an unfavorable exchange rate movement. A stop-loss limit is a personal limit that obliges the dealer to automatically take a loss upon reaching the limit value of the exchange rate.

Naturally, the size of the loss limit directly depends on the size of the daily open position. For example, a dealer has a USD/DEM arbitrage open position limit of $3 million per day and a loss limit of DM 30,000 (in the result currency). With an open position for the full amount of 3 million dollars, a stop-loss limit is executed if the price moves unfavorably by 100 pips from the position price.

For example; the dealer bought $3 million against the mark at 1.4736 and suddenly the rate started to fall. At any time, the dealer has the right to close the position ("slaughter") with a certain loss, if he believes that the position is unprofitable. He can also keep the position, hoping for the exchange rate to return to the previous level, however, if the rate continues to fall, he is obliged to close the position at the rate of 1.4636, fixing a loss of 30.000 DEM. If he opened a position of 1 million dollars, then in accordance with the stop-loss limit, the loss must be realized only after 300 points. In order to have time to realize the limit in the event of a collapse in the exchange rate during periods of panic in the currency markets, an order is placed on the market to close the position - a stop-loss order (usually in another bank).

Some banks, especially large ones with many dealers, also set a monthly loss limit for the dealer. In this case, the dealer has the opportunity to take a loss of no more than a certain value during the month, for example, 100,000 dollars.

The size of the daily open position limit and the loss limit reflect the bank's strategy when making arbitrage transactions - whether it is willing to take risks or not. For different currencies, the loss limit may vary, but the optimal ratio between the open position limit and the loss limit for the USD/DEM market is 50:1. This reflects the pattern of fluctuations in the USD/DEM rate in the current channel (see Chapter 4) and the need to take a loss when breaking through the boundaries of the channel and leaving the rate to new levels.

The mismatch limit during deposit operations sets the maximum possible period of an open deposit position that is not covered by the opposite deposit, that is, if the bank conducts interest arbitrage at different terms for attracting and placing deposits, then it is necessary to limit the maximum gap between the dates of the end of deposits. Firstly, this is due to the risk of changes in interest rates on the deposit covering the remaining period; secondly, the liquidity risk associated with the fact that the bank will not be able to find a deposit on the market that covers the previously placed funds.

For example, if a bank places funds for 6 months, intending to cover the position by attracting overnight deposits, this is a high degree of risk. It is more rational when placing for 6 months to overlap immediately by attracting a 3-month deposit.

The mismatch limit is set by the bank's management also based on the acceptable level of risk, however, it is recommended to apply the mismatch limit in the amount of no more than 50% of the term of the uncovered deposit.

Do you know that: Forex broker Exness offers its clients more than 80 options choice of account currency, including metal-currency accounts.

General questions and answers:

1. What are the best sites to play poker online and which sites host the best online poker tournaments?
The most popular and best site for playing poker and tournaments today is Pokerstars.ru. Of course, it has many competitors, the best of which are: pokerlistings.ru, fulltiltpoker.com /ru/ and grand-casino-russia.com.
2. How much profit should a beginner expect when participating in tournaments?
Theoretically, a player has a chance to win every 100th tournament he plays. In this case, the profit is calculated in relation to the money spent on the contribution. There is such a thing as return on investment - ROI (‘Return On Investment). The professional player has 100+ ROI at every level, and the average player is 80% or 50% all the time.
3. What kind of bankroll do you need to take part in poker tournaments?
You need to have a minimum of 20 buy-ins for the selected level in the game. For advanced players, this figure should aim for 50 buy-ins. And for professionals - 100 buy-ins.
4. How many opponents can we expect at the tournament tables?
Poker tournaments range from single table SNGs to tournaments with around 15,000 participants. Often the numbers are in the range from one hundred to 1000 people. Beginner level players should avoid tournaments with a huge number of registered players. The best option would be from 200 to 300 players.
5. How can you keep your account on online poker services?
Never disclose your account information to anyone on any poker service. At the same time, sites never ask players to provide their passwords, so be careful. Username and password should be specified only when logging in. It is advisable to change your password regularly.
Questions and answers about the rules of poker:
6. How does a hand start in poker?
Absolutely all distributions in poker begin with mandatory bets. After that, players must place bets depending on the available actions and the situation.
7. What is a CHECK?
A CHECK is the absence of bets in the current round, while the player can check. In this case, the turn passes clockwise to the next player. A check is a refusal in the current round of the opportunity to make a bet. The round is over when all players check.
8. What is BET?
BET - this is the absence of bets in the current round, in which the player can announce this same bet. When a player bets, the next players to the left can raise, call, or fold.
9. What is FOLD?
A FOLD is giving up the opportunity to win the pot. The player who folds (fold) should not bet in the current hand, and he also loses any opportunity to win the hand ...
10. What is CALL?
CALL is a bet in the current round that a player can call. This bet is equal to the bet of the last player.
11. What is a RAIS?
RAISING is a bet in the current round, which a player can increase by announcing a raise. To do this, the player needs to make a bet that exceeds the bet from the last player. The following players must also call or raise this bet to qualify for the pot.
12. When do bets in a round stop?
Bets are stopped if all players call their bets or fold. Rented at the end of the bidding round next card, and the next round begins, or the distribution ends altogether.
13. When is it determined who will win the pot?
In the last round, after the players show their cards, it is determined who will receive the pot. All players begin to show combinations of their cards gradually. This happens when a player raises or bets, but no other players call. In this case, whoever raises or bets wins the entire pot.

Texas Hold'em Questions and Answers:

14. What are Blinds in Texas Hold'em?
In Hold'em, the dealer of a nominal hand is marked with the button. Before the hand begins, the player posts the small blind, which is the first mandatory bet. The next player in clockwise order posts the big blind, which is twice the size of the small blind.
15. What does the term "position under the gun" mean?
This is the position of the player who sits clockwise from the big blind and receives 2 hole cards.
16. How should a Texas Hold'em player act when declaring "fold", "bet", "call" or "raise"?
The player almost always has the option to fold, i.e. refuse to participate in the fight for the pot and fold their cards. If no one has bet, then you can check or bet. If at least one of the players made a bet, then subsequent players can fold, raise or call. In Texas Hold'em, "call" means to add a certain number of chips to the pot. And "raise" means to add a certain number of chips to the pot, in excess of the previous player's bet.
17. How long does each betting round last in Texas Hold'em?
The betting round continues until all players have placed equal bets into the pot.
18. What is a "flop" and how are the cards dealt in this case?
When 3 cards are dealt face up on the board, this is called the flop. In hold'em 3 flop cards are common cards available to all players who continue to play in the current hand.
19. What happens after the flop has been betting, and how should players proceed?
After the flop is completed, the turn is dealt face up. The turn is a common 4 card in hold'em. Then another 1 round of betting takes place, starting with the most active player clockwise from the button.
20. What is a river?
The river is the common 5 card in hold'em, the card is also dealt face up. The round starts again with the player clockwise from the button. Similar betting rules apply here as on the turn and flop.
21. When and how does a showdown occur in Texas Hold'em?
If at the end of the last round there are several players left in the hand, then the player who last raised or bet opens the cards first. If there were no bets in the last round, then the active player who sits clockwise from the button opens the cards first.
22. What is texas hold'em with a fixed limit and how does it differ from other varieties of this game?
Unlike other varieties of Texas Hold'em, on the river and turn, the size of raises and bets increases by 2 times. In Fixed Limit Hold'em, up to 4 bets are allowed per betting round.
23. Who wins the pot in Texas Hold'em?
The bank is taken by the player who has the best combination of 5 cards. If several players have equivalent combinations, then the pot is divided equally between them. None of the suits in hold'em has an advantage over the others.
24. What is the minimum bet in No Limit Texas Hold'em?
The minimum bet in No Limit Texas Hold'em is equal to the big blind.
25. Is there a raise limit in no-limit hold'em?
In no-limit hold'em, there is no limit on the number of raises.
26. Pot Limit Texas Hold'em: What is the minimum bet in Pot Limit Hold'em, minimum raise, maximum raise, and are there limits on raises?
The minimum bet in pot-limit hold'em is equal to the big blind, while players can make absolutely any bets. The minimum raise must be greater than the previous bet or raise made in the current betting round. The maximum raise must equal the amount of the pot. There is no limit on the number of raises.
27. What is Mixed Texas Hold'em and how is it different from the previous ones?
In Texas Mixed Hold'em, some hands are often played under the rules of no-limit hold'em, and the rest of the hands are played under the rules of limit hold'em. It usually has Blinds that increase when moving from Fixed Limit Hold'em to No Limit Hold'em to ensure stability in the hands. Each hand uses some of the betting rules of the respective type of hold'em, which are described above.
28. Where can I learn how to play Texas Hold'em for free?
On the PokerStars service, you can play free poker for play money, as well as learn how to play this game.
Questions and answers about PokerStars:
29. Where can I find out about upcoming tournaments?
To find out about upcoming tournaments, you can view the list of upcoming tournaments by clicking the "Tournaments" button in the main program lobby. You can also look at a list of all tournaments that are currently running or have already been held.
30. How to register on the site to take part in the tournament?
If the tournament is in the "late registration" or "registration" state, then you need to select it in the list and click the "tournament lobby" button. In the tournament lobby window that opens, click the "register" button.
31. Can I play multiple tables at the same time and how many tables are available for simultaneous play?
Yes, you can play at multiple tables at the same time, as well as take part in several tournaments at the same time. But, in order not to create inconvenience for other players, you need to make moves at all tables in a timely manner, and not make other players wait long. Pokerstars has a limit - no more than 24 open tables, but the number of open tournaments is not limited.
32. Can I get extra time on Pokerstars to think about moves?
Yes, all tournament participants are given a certain amount of extra time. If the player needs more time, he can use it, the amount of which will naturally decrease. In order to use this time, you should press the "time" button, which appears in the chat window after the first warning about its expiration.
33. If the program crashes during a tournament, what happens?
In case of any failure in the program, all current hands are canceled, and the number of players' chips is restored at the start. In exceptional cases, players will be compensated in accordance with the cancellation procedure at PokerStars.
34. What should I do if I can't take part in competitions where I have already qualified?
It all depends on the type of competition:
a. If you need a ticket for a participant in a tournament, you can cancel the registration, and also use the ticket in another similar tournament for the participant. You can look at the list of available tickets using the "tournament tickets" command in the special "requests" menu.
b. If a player wins a ticket to one of the PokerStars tournaments with a real money buy-in, it is allowed to cancel the registration and then receive PokerStars currency or tournament money, which can be used to purchase a PokerStars ticket to similar competitions.
c. If a player gets a ticket to a live tournament, then he will have to participate in this tournament.

35. Can I start playing poker on PokerStars right now?
First you need to install a client program (free) for playing at PokerStars, make the necessary settings and you can start playing.
36. How much is initially given play chips for Game? And what to do if these chips are over?
Initially, each player receives 1,000 play chips. You can buy additional chips to replenish your account. You can restore your balance about three times per hour. After using 3 rebuys, you should wait for the next hour to get your chips again.
37. How and where can I find out which poker tables are played for play money?
All play money poker tables are different in that absolutely all of their names begin with the word "Entertainment" (Fan). To find play money hold'em, you should find the "play money" tab. Often they are at the end of the list of tables after all the real money tables. If there are no play money tables in your play money list, your settings may not have a checkbox to show such tables, so change your settings.
38. What should I do if my credit card is denied?
Most banks have an anti-sports policy. intellectual games on the Internet, considering it a huge risk. To clarify whether your bank adheres to this policy, you should call the bank's support service and clarify this nuance.
39. Can PokerStars employees ask for their customer's credit card details via email?
Remember, PokerStars employees will never ask you for such data, especially by e-mail. Therefore, we recommend that all users do not send their credit card number and three-digit security code to anyone on any server in any way on the Internet.
40. Can I transfer money to other players within the system or receive transfers?
Yes, it is possible on this site. To transfer real money to PokerStars, in the menu called "requests", you should use the "transfer funds" command. Remember that all transfers must be approved by the PokerStars security department, so they are often processed with some delay. In some cases, confirmation or additional information may be required.
41. How do I pay my PokerStars account for operating expenses?
PokerStars states that all player account balances are held in dedicated segregated accounts that are not used to pay for miscellaneous operating expenses. These accounts are managed by a leading European financial services group…
42. Where can I buy the necessary accessories for playing poker, tickets to online tournaments and other necessary and poker-related items?
PokerStars has a Vip-shop where you can buy both tickets for online tournaments and the necessary accessories for poker. It also sells books, clothes and other interesting and necessary things for life.
Questions and answers on other types of poker:

43. What is Omaha?

Omaha is a poker game that originated from Texas Hold'em. In this game, each player receives 4 cards that belong exclusively to this player. In addition, rent 5 open cards, which form a unique combination with the name "board". Each player can use exactly 3 of the 5 community cards, as well as 2 of his pocket cards, to then make the best combination of 5 cards. In Omaha, unlike other poker games, you must use exactly 2 hole cards and exactly 3 community cards.

44. Are there varieties of Omaha? If they exist, which ones?

Yes, there are 3 varieties of Omaha: No Limit Omaha, Pot Limit Omaha and Fixed Limit Omaha.

45. How to play Omaha?

In Omaha, the nominal dealer for each hand is determined by the "button" or "button dealer". The player, before the start of the distribution, puts the small blind, that is, the first mandatory bet. The next player in clockwise order must post the big blind, which is twice the size of the small blind, this depends on the structure and stakes of the blinds in each game.

46. ​​What should be the player's actions in this kind of poker?

In Omaha, a player can bet, fold, raise, or call. The available actions depend on what the previous players are doing. Any player can always fold, that is, simply refuse to fight for the pot by discarding their cards. If no one has bet in the game yet, then you can check or bet here. If at least one of the players made a bet, then the following players can call, raise or fold. In Omaha, to call means to add a certain number of chips to the pot, necessary in order to equalize the bet of the previous player. And to announce a raise means to add the required number of chips to the pot, exceeding the bet from the previous player.

47. What does the flop mean in Omaha, and what actions should be taken during the announcement of the flop?

At the end of the first round of betting, the flop is dealt face up. The flop in Omaha is the first 3 community cards that are available to all active players. The first player must go first from the button in a clockwise direction. In Fixed Limit Omaha, raise and bet sizes are multiples of the small bet.

48. What are the rules for playing Omaha on the turn and river?

At the end of the betting on the flop, the turn is dealt face up. In essence, the turn is the 4th common card in Omaha. The first player always goes clockwise from the button. In Fixed Limit Omaha, absolutely all raises and bets on the turn are multiples of one big bet. When the betting is completed face up, the river is dealt on the turn. The river is usually the last and 5th community card in Omaha. The active first player always goes first from the button in a clockwise direction.

49. Omaha showdown rules?

At the end of the last round in the hand, when there are several players in the game, the first of them to open the cards is the player who last announced a raise or bet. If there were no bets in the final round, then the player sitting clockwise from the button starts to open the cards first. As a result, the bank is taken by the player who has the best combination of 5 cards.

50. Fixed Limit Omaha, how to play it and how is it different from regular Omaha?

In Fixed Limit Omaha, bet sizes are structured and predetermined. The difference from other varieties of Omaha is that on the flop and pre-flop, all raises and bets are made in increments that are equal to the big blind. All bets are doubled on the river and turn. You can bet up to 4 bets per round in Fixed Limit Omaha.

51. What is the minimum bet, minimum and maximum raise in Pot Limit Omaha?

In Pot Limit Omaha, the minimum bet is equal to the big blind, but players are allowed to make any bets that do not exceed the size of the pot. The minimum raise is not less than the previous bet or raise that was made in the same round. The maximum raise is equal to the pot size, which can be defined as the amount of the pot.

52. No Limit Omaha: Is there a limit to the number of raises in this variation of Omaha?

In no-limit Omaha there is no limit on the number of raises...

53. What is Seven Card Stud and how is it different from Omaha and Texas Hold'em?
Seven Card Stud is a standard (classic) poker variant that can take a lifetime to master... Players get 7 cards each, but they use 5 card combinations to determine the winner. Unlike Omaha and Texas Hold'em, seven card stud often played with a limited betting structure.
54. What determines the size of the ante bet?

Ante is the initial bet before the cards are dealt, the size of which depends on the size of the game, and is displayed in the table name. In a word, this is the cost of participation in a certain distribution.

55. What is HORS, and what are the rules in it?

XOPC is an acronym that stands for a family of poker games.

56. What is the difference between Badugi and other varieties of poker?

Badugi has a lot in common with lowball, as it also wins junior hand. But there are many significant differences from the popular varieties of poker today, and the most important of them is the seniority of the combinations. The strongest of all are hands containing pairs and consisting of 4 low cards of different suits. These hands are called Badugi.

57. Blind play, how should it be played?

The blind is played as follows: each player receives 4 hole cards in his hand. This is followed by the first round of betting where players can raise, call or fold. Players who remain in the game after the 1st round of betting can exchange cards. The essence of this exchange is that players discard unnecessary cards, and in return receive others. If desired, you can discard all 4 available cards. After that, the 2nd round of betting immediately begins, where players can declare fold or bet. If no one wants to bet, the players can check. At the end of the betting round, the next betting round takes place.

58. What is the main strategy of this kind of poker?
The goal of this game is to collect Badugi, that is, a combination of 4 low cards of different suits. The best combination is cards of different suits: 4-3-2-A.
59. Does a player's position at the table in the blind matter, and if so, why?

Yes, the player's place in this game is important. And all because the player who moves last can easily get information about his opponents, focusing on how many exchange cards he has left.

A small preface from the translator

As a rule, bankroll sizing discussions offer rather generalized recommendations like "a good bankroll should be at least ... 20/30/60/100 ... stacks / buyins."

This translation offers and explains in detail the approach to a mathematically accurate and flexible way to determine the size of the bankroll.

I hope that it will be at least useful for poker players to follow the course of the author's reasoning.

* The text of the translation is more a processing and understanding of the author's ideas than a pure translation. The original text (see the link at the end of the post) outwardly and in structure is very different from the proposed translation.

INTRODUCTION

A bankroll is all the money you can afford to lose in poker.

Bankroll management (or bankroll management) is relevant for profitable players who do not want to make additional deposits to their gaming accounts.

If you are not sure that you are a profitable player, then you most likely need to practice not bankroll management, but to determine the budget for poker expenses.

BANKROLL CALCULATION FORMULA

A good way to determine the optimal bankroll size in many skill games is to use the following formula:

PokerTracker and HoldemManager calculate the value of the standard deviation (st. deviation ; PokerTracker : see Session Notes -> More Details; HoldemManager : need to add an additional parameter to the reports).

Standard deviation and win rate must be measured in the same units (eg bb/100 hands or $/hour) and over the same time frame.

FORMULA VALUE:

1. The size of the bankroll is directly proportional to:
a. comfort ( see below for details; the higher the comfort value, the more conservative the player's playing style);
b. dispersion;
2. The size of the bankroll is inversely proportional to the size of the win rate.

That is:

1. the higher the comfort level (i.e. the more conservative the playing style),
2. the higher the dispersion,
3. the lower the winrate,

– the bigger the bankroll should be.

If you play without withdrawing funds and training costs, then:

COMFORT

Comfort levels to use in the formula:

1 - very aggressive;
2 - aggressive;
3 - neutral, moderately conservative;
4 - conservative;
5 – …

Your acceptable comfort in the game depends on your attitude to risk and on the ability / willingness to go down the limits when you get into black bars. For most players, optimal comfort levels will be levels between 2 (aggressive) and 4 (conservative).

If you plan to withdraw almost all winnings from the account, then you need to choose a much higher comfort level value.

You should generally avoid playing with a comfort level value less thanhalf the value of the target comfort level.

WINRATE

The amount of your win rate depends on you and the stakes you play at. No one can tell you your win rate and it may take a lot of hands played to accurately estimate your win rate.

If you have not played a long distance in poker, then you should:
1. perceive the above formula for calculating the bankroll as a very conditional and far from the exact numbers reference point;
2. As your win rate improves, recalculate your bankroll size using the formula, taking into account changes in your performance.

Winrate is increased by regular bonuses or rakeback.
Winrate is reduced by regular cashouts.

VARIANCE (standard deviation 2)

Approximate standard deviation values ​​for various types of Texas Hold'em are shown in the table below.

* In MTTs, the value of the standard deviation increases as the number of participants in the tournament increases and your win rate increases.
Extra plus player playing 200 player tournaments can have a standard deviation of 5 buyins.
Strong plus player in tournaments with 200 players can have a standard deviation of 6-7 buyins.

** AT no limit hold'em standard deviation is more sensitive to play style, especially in short-handed play.

EXAMPLES:

CLIMBING LIMITS

When trying to move to the next limit, you can use a comfort level value much lower than usual, because you need to plan in advance a quick return to the previous limit in case you hit the new limit in black stripe. Set a stop loss (maximum allowable minimum bankroll size) and if your bankroll falls below it, return to the previous limit.

For example, if your NL $25 win rate, expressed in $/100 hands, is less than your NL $10 win rate, then it's better to play NL $10 in the near future, regardless of your bankroll capacity. It still makes sense for you to run out to NL $25 in the hope of improving your win rate at this limit or in the hope that you can get the skills you need faster this way. successful game at higher limits.

In order to determine how reasonable it is for you to move up in the limits in the near future, you can calculate the comfort level as the difference between the comfort levels of the two limits - i.e. calculate the differential comfort level:

For example: suppose that you have the following indicators at two stakes:


and your bankroll = $5000.

You can usually move up the limits if the valueThe differential comfort level is more than half of the target comfort level.

The size of the bankroll sufficient to provide security in the game depends on the win rate, usually decreasing at difficult limits and increasing at easy ones.

Don't think it's the right decision to set the same bankroll size for all limits in the form of a fixed number of buyins/bb. For example, 10 buy-ins at nano-stakes will be a fairly conservative bankroll, while at high stakes an expert player for safe play you need 50 - 100 buyins.

The 40-buyin bankroll drawdowns that the pros love to talk about at high stakes doesn't mean you need to have that big a bankroll to be safe at the low micros. But it's also true that just because you haven't experienced a temporary 10 buy-in bankroll drop at the lower limits, that doesn't mean you'll be safe at 20 buy-ins at the mid-stakes.

The above considerations do not depend on the number of tables you play. Multi-tabling by itself does not increase the risk of losing a bankroll. If your win rate drops, or your standard deviation changes, or for psychological reasons, you need a different level of comfort, then you should simply factor these changes into your bankroll formula.

If the calculations say you need a 400bb bankroll, then you don't need to have 400bb in every poker room you play. It is also normal if the bankroll is not even fully deposited in the poker rooms.

“If it seems to you that the situation is improving, then you haven’t noticed something”

Consequence of 2nd Chisholm's Law

The main principles in the activities of any commercial bank should be maximum versatility and wide satisfaction of the needs of its customers. In the conditions of the interbank market, each counterparty bank to a certain extent depends on the behavior of its partners, and this dependence can only be expressed through the willingness of the bank to take on the risk of interbank lending.

Each commercial bank conducting active operations in the interbank credit market should have its own concepts in determining both the procedure and methodology for setting limits, and in determining the most reliable counterparty banks, which can only be achieved on the basis of a comprehensive analysis of their creditworthiness (reliability).

At the same time, it should be stipulated that the maximum amount that can be issued to a counterparty bank for certain types of interbank transactions made on the basis of concluded agreements is considered as an amount equal to the risk of the counterparty bank assumed by the bank and is a limit on the corresponding bank- counterparty.

The purpose of determining the creditworthiness (reliability) of counterparty banks and setting limits on counterparty banks is to minimize the risk of non-return of issued credit funds using financial analysis methods.

In turn, the current creditworthiness (reliability) of counterparty banks should be determined by a commercial bank in the following cases:

• when calculating limits for counterparty banks for specific interbank transactions for specific periods;
• when determining the stability of counterparty banks;
• targeted selection of potential counterparty banks;
• when deciding whether to work with a counterparty in any transactions involving credit risk.

The level of credit risk determines the size of the established limit on transactions with a commercial bank.

The limit is the most popular risk management method in a commercial bank. Often it is the establishment of limits on certain types of operations that is understood as risk management. However, despite its seeming simplicity, the development of a high-quality system of limits requires quite a lot of effort, and there are a certain number of “pitfalls” along the way. AT this process it is important to adhere to some chosen unified strategy not allowing the process of limiting the operations of a commercial bank to "break" into a chaotic and sometimes senseless restriction of ongoing operations.

The limit is necessary in cases where, for one reason or another, the necessary characteristics of the riskiness of banking operations are not taken into account when conducting operations.

Reasons for setting a limit may include:

• technical impossibility to assess risks directly during operations. So, when concluding an interbank lending transaction with foreign commercial banks, it is almost impossible to assess the condition of the borrower;
• insufficient interest of the bank's business units in following the chosen risk management strategy - a “conflict of interest” between shareholders and employees of business units. For example, a limit on the maturity of securities in a bank's portfolio - employees of a unit that deals with a number of securities are interested in acquiring securities of greater maturity, as this increases their ability to receive higher returns, but on the other hand, long-term securities can carry and unacceptable risk.

Clearly, a limit only makes sense if the business unit that is being restricted has some freedom in terms of determining levels of risk acceptance. For example, it makes no sense to limit balances on correspondent accounts if there are no mechanisms to limit the receipt of client funds to these accounts.

At the same time, the limit management system allows limiting and reducing possible financial losses associated with credit and market risks.

A branched and complex scheme of interconnected limits is implemented using a single mechanism for setting, calculating and tracking limits set for open positions, volumes of one-time transactions, for the terms of contracts in the context of counterparties/financial instruments.

Limits in the system are divided by types of risks and by methods of their control

By type of risk:

• external (counterparty risks) - limit the amount of obligations of a counterparty (or a group of counterparties) to the bank on any date, include credit and delivery limits;
• internal (instrument risks) - limit the size of the portfolio/position on a financial instrument, include limits on open positions, stop limits, etc.

Control methods:

• positional - controlled at the conclusion of each transaction;
• control - controlled periodically (for example, 1 time per hour);
• parametric - not controlled, but used in calculations.

External limits limit the risk position (the difference between the amount of outstanding claims and obligations) for each counterparty. Risk positions are subdivided into credit (direct credit risks) and deliverable, taking into account collateral (indirect credit risks) and are considered as functions of time. Limits on margin transactions are set and controlled.

Internal limits limit the open short and long position of the bank, the terms and the maximum size of a single transaction. Position limits are checked when entering and/or correcting trades.

By type of operation:

• limits on counterparty banks;
• concentration limits;
• volume position limits;
• stop loss limits.
  

For limits on counterparty banks:

• the maximum value of the limit to be opened for a counterparty bank (a group of interrelated counterparties) cannot exceed the amount of unacceptable risk;
• the limit opened for a counterparty bank (a group of interrelated counterparties), as a rule, should not lead to an increase in the current value of dynamic risk to a value greater than the maximum acceptable risk. In some cases, it may be allowed to increase the current value of the dynamic risk to a value not exceeding the maximum allowable risk;
• the limit opened for a counterparty bank (a group of interrelated counterparties) should not lead to an increase in the current value of the sum of static and dynamic risk for all assets of the bank to a value greater than unacceptable risk.
  

For limits on the concentration of bank investments in various types of interbank loans and deposits that have unidirectional and approximately the same sensitivity to the impact of changes in the economic situation and / or current legislation -the limit value of each of the concentration limits should not exceed the value of the unacceptable risk.

For volume position limits characterizing the maximum volumes of the bank's open positions on assets subject to dynamic risk:

• the opened positional limit, as a rule, should not lead to an increase in the current value of the dynamic risk to a value greater than the maximum acceptable risk. In some cases, it may be allowed to increase the current value of the dynamic risk to a value not exceeding the maximum allowable risk;
• the opened positional limit should not lead to an increase in the current value of the sum of static and dynamic risk to a value greater than unacceptable risk.
  

For stop-loss limits that fix the maximum allowable current losses on positions opened by the bank on assets subject to dynamic risk, the opened stop-loss limit should not increase the amount of open stop-loss limits to a value greater than the current value of dynamic risk.

The fact of violation of the limit is recorded in the information about the status of the transaction, and the details are reflected in a special limit check log.

To limit market risks, “stop limits” are used, which are set for financial instruments and groups of instruments, and “stop rates” for interbank loans.

The limit value is specified as an amount, a term (in days), a percentage, or a number.

Financial result limits, or as they are more commonly called “stop-loss” limits, are a hard limit on actually occurring losses on a portfolio or position. Violation of the stop-loss limit should cause the immediate closure of the position, the curtailment of some activity or a change in the strategy of the organization on one scale or another.

The establishment of these limits, as a rule, is carried out in close conjunction with positional limits. Position limits in this approach determine the marginal riskiness of a position/portfolio, assessed using one or another method, and the “stop-loss” allows you to cut off excess losses that may arise as a result of stressful situations not taken into account by the assessment, model errors used in risk assessment and etc.

In addition, the stop-loss limit itself can serve as a mechanism for limiting risks (limiting losses). Those. within the framework of the position limit, it is possible to authorize the formation of a position on which, with a significant probability, significant, unacceptable losses may occur, and using the stop-loss limit, it is possible to determine the points of forced closing of the position in the event of a significant level of losses.

To set stop-loss limits, two ideologically different approaches can be used - setting limits from the standpoint of implementing a trading strategy and setting limits from the standpoint of money management.

The stop-loss limit, set from the point of view of the implementation of a trading strategy, can limit both directly occurring losses and price levels, the values ​​of indicators used in the technical analysis of markets, etc.

From the point of view of capital management, setting a stop-loss limit means the need to close positions, curtail certain activities in the event of losses that are unacceptable for the organization, regardless of market conditions. "Stop-loss" in this approach should be closely related to the concept of "risk capital". Within the established stop-loss limits, there should not be a situation when losses on a position/portfolio exceed the “risk capital” tied to them. Naturally, this method implies limiting, first of all, actually occurring losses.

From the standpoint of risk management, the second method of setting a limit is of the greatest value. “Trading” stop-loss limits should be used rather by the business units of the organization that directly conducts transactions, as an internal tool for managing operations.

An important difference between a stop-loss limit and position limits is that it does not so much restrict new transactions as it requires measures to limit the damage caused by previous transactions. Since any process of taking action requires a certain amount of time and costs, it is important to take them into account when setting a limit. So, when setting a limit on a market position, it is necessary to take into account those additional losses that may arise as a result of market “slippage” during the limit calculation, detection of violations, making the actual decision to close the position and its implementation.

In other words, “stop-loss” limits should be somewhat tougher than the requirements determined by “risk capital” - losses should be fixed at lower levels.

It is not desirable to set limits at “stress” levels, when significant market movements, sharp changes in losses and high risk assessment errors can lead to the fact that the actual losses that have occurred will be significantly higher than the limit.

It is also advisable to set indicative stop-loss limits at lower loss levels, violation of which will lead not to closing the position, but to taking measures to increase attention to the position, to accelerate the reaction to more serious losses.

Risk Management Tools

The reliability of a bank is determined not only by the risk a commercial bank is exposed to, but also by how much the bank is able to manage it. “The main means (methods) of risk management include the use of the principle of weighted risks; implementation of a systematic analysis of the financial condition of the bank's customers, its solvency and creditworthiness, application of the principle of risk sharing, refinancing of loans; pursuing a policy of diversification (wide redistribution of loans in small amounts provided to a large number of customers, while maintaining the total volume of bank operations; insurance of loans and deposits; use of collateral; use of real personal and "imaginary" guarantees, hedging of foreign exchange transactions, increasing the range of transactions activities).

The objectives of the analysis of the financial condition of commercial banks

An analysis of the financial condition of a commercial bank can be presented as external: from the side of the regulator (NBU or CBR), independent rating agencies, potential customers (depositors, shareholders), and internal - internal analytical services jar. It is not always possible to draw a more or less clear boundary between these two approaches, since the same sources of information are used (with varying degrees of detail), and common goals are pursued.

In the context of ongoing market instability, the problem of assessing the financial condition of a bank becomes especially relevant. Each of the market participants (regulator, commercial banks, enterprises and organizations, audit firms, local and central authorities, individuals) pursue their own goals when analyzing the financial condition of the bank. However, the general purpose of the analysis for all subjects is to determine the effectiveness of the activities and the degree of reliability of the bank.

The soundness of a bank is its ability to fulfill its obligations without delay and in any situation on the market. That is, reliability should be characterized by the solvency of the bank, the stability of its activities and the liquidity of the balance sheet.

Unlike liquidity and solvency, the concept of a bank's reliability is largely related to its efficient operation, including a constant high level of balance sheet liquidity. But in order to gain a reputation as a reliable bank, it must meet a number of additional requirements: a significant amount of the authorized capital and balance sheet, duration of activity in the financial market, an effective management structure, established partnerships with reliable clients, a high and stable level of profitability, and so on.

Solvency means the ability of the bank to repay its financial obligations in a timely manner in accordance with the upcoming payment terms.

Under the stability of the bank is understood the stability of its activities in the light of the medium and long term; it can be assessed by asset quality, capital adequacy and performance.

Liquidity (as already noted) is understood as the ability to convert the bank's assets into cash or other means of payment to pay for the obligations presented if the available means of payment are not enough for this.

Thus, the basis for making a decision on setting limits on interbank transactions with the relevant counterparty banks should be the existence of the main and additional information.

Basic information includes mandatory and additional forms of financial reporting.

Mandatory forms of financial reporting are:

• consolidated balance sheet of the counterparty bank as of the 1st day of the current month in electronic form (for example, files # 01 and # 02 for Ukrainian banks);
• a report on compliance with economic standards for the reporting month, taking into account compliance with the weighted average risk standards for an open currency position (for example, form No. 611 for Ukrainian banks);
• information on compliance with the requirements for the mandatory reserve of funds on a correspondent account (for example, form No. 381 for banks in Ukraine).

Additional reporting forms:

• information on the inclusion of subordinated debt in the calculation of the bank's capital (for example, form No. 610 for Ukrainian banks);
• turnover balance sheet for the reporting month;
• an auditor's report on the reliability of the bank's financial statements for the previous year.
  

At the same time, additional information may be used, including:

• on the founders (participants) of a commercial bank and the amount of their shares in the authorized capital;
• about FIGs (financial-industrial groups), which include the bank, sectoral specialization of FIGs, interrelations within FIGs (economic and personal);
• on the bank's counterparties for operations in the domestic foreign exchange and money market;
• about the level of management (in particular, risk management);
• on the publicly declared and implemented strategy of the bank;
• about the bank's largest borrowers;
• about the degree of openness (publication in the press, readiness of staff to provide additional information about the bank by phone or e-mail).
  

In addition, the constituent documents and materials provided by the bank's staff can serve as sources of additional information; annual reports; publications in the press or on the Internet.

I would like to dwell in more detail on the bank balance sheet, which is the main source of information when conducting both external and internal analysis, having considered its “strong” and “weak” sides.

Of course, the main information for analyzing the financial condition of a bank is its financial statements. Moreover, the state of any credit institution can be most qualitatively assessed on the basis of a turnover sheet or a balance of second-order accounts (if they are available for use), since these reports contain the largest amount of information, and they can be drawn up for any number, that is, they can be considered at any time and reflect the situation as quickly as possible. But when analyzing, do not forget that the balance sheet is not free from a number of limitations:

• there are still regulatory, accumulative and transit accounts in it, which overestimate the balance sheet currency, which leads to distortion of the results of calculating the coefficients that assess the financial condition of the bank;
• a number of indicators describing the current state of the bank, which is constantly changing, cannot be correctly calculated, since the state of the accounts participating in the calculation by the time of the analysis may change significantly (partly this problem allows you to decide the use of average values ​​for the period, but they cannot fully characterize the state of the bank on each specific day);
• the existing chart of accounts does not allow evaluating the bank's loan portfolio by maturity. As a result, it is difficult to understand the extent to which the ratio of attracted and placed funds by maturity is observed, thus it becomes impossible to determine the risk of “illiquidity” associated with the excess of payments on obligations over the receipt of funds from repayment of loans. By the way, non-compliance with this condition was one of the reasons for the August crisis and the bankruptcy of a number of banks;
• the inability to assess the real quality of the loan portfolio, that is, the real level of overdue and problem loans. The prolongation of such loans has taken root in the existing practice;
• the balance sheet records the results of financial transactions at the time of its compilation. Therefore, the analysis carried out on its basis will characterize the financial position of the bank at that time. The more time has passed since the date of the balance sheet, the more the real state of the bank at the time of the analysis will differ from the results obtained;
• the balance for one date is only a snapshot of the work of a commercial bank. In order for the results of the analysis to most fully reflect the present financial position of the bank, its analysis should be carried out in dynamics;
• the results of the analysis of financial statements cannot be considered in isolation from factors that are not reflected in the statements (the state of the financial market, the state of the economy, political events, etc.);
• objective analysis is impossible without the use of correctly calculated boundary values ​​of indicators. The constantly changing conditions of work in the financial market also require adjustment of the boundary values ​​of indicators, otherwise the probability of an erroneous assessment of the financial condition of the bank increases;
• a big problem is the real assessment of the bank's assets, in particular its fixed assets. The main reason is the possible discrepancy between the balance sheet value of these assets and their real value at the time of the analysis due to inflation, market conditions, revaluation, accounting methods used, etc. For example, a building owned by a bank and valued at a round sum may either not find a buyer at all, or the offer to purchase will be a significantly lower amount;
• the current chart of accounts was created for a different business system, so many changes have been made to it over the past years. These circumstances lead to great difficulties in carrying out the structuring of the balance sheet (grouping accounts into items with the same economic content) necessary for further analysis;
• in order to assess the prospects for the development of a commercial bank, it is impossible to make a qualitative forecast only on the basis of financial statements; it is necessary to analyze information that does not have a valuation at all. Among them are possible political and general economic changes, changes in the operating conditions of the market segments in which the bank operates, structural and other changes occurring in the bank itself.
  Nevertheless, the balance sheet of a commercial bank (together with the settlement ratios at the reporting date) often remains the only financial document that serves as an external financial analysis: from rating agencies, potential partners (whether correspondent banks, depositor clients, shareholders (participants, shareholders), etc.), and internal, because, despite the listed shortcomings, the balance sheet of a commercial bank also has a number of advantages:
• commercial banks are required by law to publish data on their annual balance sheet and income statement;
• data on the balance sheets of commercial banks are the main source for the NBU to develop the main directions of monetary policy and regulate the activities of the latter;
• in the course of the analysis of the balance sheet, the specialization of the bank's activities, the state of liquidity, profitability and the degree of riskiness of individual banking operations are determined;
• the role of the balance sheet in the analysis of the liquidity of a commercial bank is so great that this analysis is often called the analysis of the balance sheet;
• the bank's balance sheet characterizes in monetary terms the state of the resources of commercial banks, the sources of their formation and directions of use, as well as the financial results of the bank's activities for the analyzed period;
• balance sheet analysis allows you to determine the availability of own funds, changes in the structure of resource sources, the composition and dynamics of assets, etc.;
• when analyzing several balance sheets over an interval of “three-six-nine-twelve” months, one can see a trend in the bank's financial condition, which is additional important information.
  It should be noted that the main condition for making a decision when considering the issue of setting limits on interbank transactions with any counterparty bank should be the availability of mandatory reporting forms. Other information is considered by the relevant division of the bank, which is engaged in the calculation of limits, as information for information that helps to assess the level of management of the counterparty bank and understand its development strategy.
  

There is a fairly wide range of methods for calculating limits on counterparty banks. Many methods involve calculating the limit as a certain percentage of capital, net assets, earning assets, current liquidity position, total currency position, etc.

If the limit is set from net assets, then in this case net assets are conditionally considered as some kind of security. True, this security is not fixed by the contract for a specific creditor.

All net assets must ensure the return of the interbank loan through their sale (realization). Although this sometimes becomes possible only when the counterparty bank is declared bankrupt.

Thus, the bankruptcy mechanism is a loan repayment mechanism, which is guaranteed by the current legislation.

The most common causes of bank failure are:

• unsuccessful search for new capital participants;
• provision of “bad” loans;
• unsuccessful trading and operations with securities;
• corruption in the ranks of top management;
• unqualified management, unable to recognize in time the risk of loss of assets and the growth of banking costs;
• excess of opportunities over demand;
• poor-quality analysis of information about the situation in the financial market and bank customers.
  

If the limit is set as a share of the capital or regulatory capital, then it is obvious that the bank assumes the return of the loan at the expense of this part of the capital.

However, the matter can reach capital again only in the event of the bankruptcy of the counterparty bank. But in this case, the bank can count on the return of the loan from the sale of all assets, and not the part of the assets remaining after the satisfaction of all creditors' claims, i.e. capital.

Meanwhile, the calculations of limits from capital or regulatory capital and from net assets are interconnected through the capital multiplier.

If the limit is set from income-earning assets, how does the borrowing bank intend to repay the loan? There is one legislatively fixed mechanism for repayment of a loan - direct write-off of debt from a correspondent account with the NBU.

Thus, the funds on the correspondent account can also be considered as some kind of collateral. The procedure for direct debiting of funds from a correspondent account is simpler, faster, and therefore more effective than the bankruptcy procedure of a borrower. However, statistics show that the bankruptcy procedure of the borrower lasts about 3 years, and the return of debts by bankrupt banks is 5-10%. At the same time, an effective bankruptcy procedure means a reasonable duration for the sale of the assets of a bankrupt bank at affordable prices.

Justified from the point of view of the legislative framework, an effective mechanism for repaying an interbank loan can be considered a direct write-off of debt from a correspondent account with the NBU or the CBR. The limit set from the amount of funds on the correspondent account also receives a corresponding justification. But in this situation, it is necessary to know not only the balances on the correspondent account at the reporting date, but most importantly, the turnover and stable daily balances on the correspondent account, in one or another currency.

The lending limit for a particular counterparty bank should depend not only on the volatility of the balances of earning assets and paid liabilities, the trend in average balances on correspondent accounts with the NBU or the Central Bank, the loan repayment period, but also on a complex of other components, such as the amount of regulatory capital, which is a kind the "foundation" of a commercial bank and the profitability of ongoing banking operations. At the same time, the variability of balances is measured by the standard deviation of balances on correspondent accounts with the NBU / CBR from their average value and the trend in average balances - as a percentage increase or decrease in average balances, and the repayment period of an interbank loan is the sum of the contractual loan repayment period and the period for registration of property rights on funds on the correspondent account of the counterparty bank. The longer the repayment period of the interbank loan and the volatility of the balances on the correspondent account with the NBU/CBR, the lower the lending limit. Only with an increase in the average balances on the counterparty bank's correspondent account can the credit limit increase. And vice versa.

However, there is a relationship between the balances on the correspondent account and other financial indicators of the counterparty bank, including the balance sheet currency of a commercial bank. Therefore, in calculating the limit, the “size” of the counterparty bank must also be taken into account, i.e. the value of his net assets.

At the same time, the most common analysis technique at the moment is the assessment of equity capital adequacy to fulfill obligations under various types transactions.

In addition, when building a model, assets and liabilities are grouped into economically homogeneous groups. Accounting for the reliability, liquidity, profitability, quality of assets and liabilities of the counterparty bank is carried out using weighting factors, which makes it possible to calculate the overall risk limit.

Now that the relationship between the limit and the amount of regulatory capital, the balance of funds on the correspondent account, and the presence of a positive balance on active operations, we can move on to the technology of setting the limit.

Definitions of the subject being described

Limitation of banking operations

Position limits

Volume limits

Limits on position characteristics, on weighted volume

Structural limits (share limits, concentration limits)

Financial result limits

Setting limits on transactions with banks

Limit Setting Technology

Checkout limit

Normative base

Completing the calculation

Features of setting a cash limit

Terms of setting a limit

The procedure for calculating the limit, restrictions

How to calculate the limit

Responsibility for accumulation Money over the limit

Broker limit

Contract limit

Price limit

Credit limit

Market risk limit

Overdraft limit

Limit of budget commitments

limit in insurance

Insurance limit

Limit of liability of the insurer

Insurance indemnity limit

Limit on nature use

Limit order

Limitation

What is limiting

Limitation in Instalev

Limitation in 1C

Limitation and distribution of capital

Definitions of the subject being described

Limit-this is limit quantity, a quantitative restriction on the purchase, sale, credit, transaction volumes, import and export of goods, mining, use of natural resources, level of wages, foreign exchange transactions.

Limit-this is marginal norm, the allowed amount of something, restriction, limit, edge.

Limit-this is type of systematization of normative acts.

Limit -this is A quantitative constraint placed on certain characteristics of an entity's operations.

Limit-this is the upper and lower limit of the price set by the client to his broker for transactions with shares.

Limitation of banking operations

The limit is the most popular risk management tool in a bank. Often it is the establishment of limits on certain types of operations that is understood as risk management. However, despite its seeming simplicity, the development of a high-quality system of limits requires quite a lot of effort, and there are a certain number of "pitfalls" along the way. In this process, it is important to adhere to some chosen unified strategy, not allowing the process of limiting bank operations to break into a chaotic and sometimes senseless restriction of ongoing operations.

A limit is a quantitative restriction imposed on certain characteristics of a bank's operations. The limit is necessary in cases where, for one reason or another, the necessary characteristics of the riskiness of banking operations are not taken into account when conducting operations. Reasons for setting a limit may include:

Technical impossibility to assess risks directly during operations. So, when concluding an interbank lending transaction, it is almost impossible to assess the condition of the borrower;

Insufficient interest of the bank's business units in following the chosen risk management strategy is a "conflict of interest" between shareholders and employees of business units. For example, a limit on the term (duration) of bonds in a portfolio - employees of a unit that deals with bonds are interested in acquiring bonds of greater maturity, as this increases their ability to make a profit, but on the other hand, long bonds may carry an unacceptable risk.

Limitation is inappropriate if decisions regarding the conduct of operations are carried out taking into account the necessary risk assessments. For example, for a bank with a small loan portfolio, it is not necessary to limit commercial lending operations, because the risk can be assessed and, as necessary, limited directly in the process of reviewing a loan application, approving a loan by the credit committee and top management of the bank.

Clearly, a cap only makes sense if the business unit being capped has the necessary ability to determine levels of risk acceptance.

-Positional limits

Position limit - limiting the characteristics of individual investments in certain assets, positions in certain markets, certain portfolios. The purpose of establishing a position limit, as a rule, is to limit the own risks of individual instruments - market, credit, asset liquidity, operational ones.

The position limit limits the risk level of a position/portfolio, but it is impossible to limit losses on operations with its help. For the purpose of limiting losses, the stop-loss limit serves as an addition to the positional limit.

--Volume limits

Depending on the complexity of the chosen approach to limiting, the following variants of positional limits are possible:

The simplest and most commonly used form of setting a position limit is to limit the size of the portfolio and position. Almost all risk assessments assume a linear increase in risk with increasing volume, i.e. volume is actually a baseline estimate of sensitivity to a particular type of risk.

Separately, you should pay attention to the methods for calculating the volume of positions that can be used when calculating the limit value:

The book value of investments is the worst option for limiting - accounting methods can lead to the fact that the real book value will not reflect the actual value of the position in a particular asset.

So at the moment in Russia almost all financial instruments are not subject to revaluation, with the exception of currencies, precious metals and GKO/OFZ. As a result, for example, the book value of a portfolio of shares acquired several months ago may differ significantly from the actual market value.

The market value of investments - on the one hand, really reflects the current risk for a portfolio or position, but also has a number of disadvantages.

First, for some even liquid instruments (for example, promissory notes), the revaluation of investments according to the market is difficult, time-consuming and cannot always be performed on a daily basis.

Second, earning income in the short run can increase the limit value and lead to limit violations. For example, by setting a limit on investments in shares of $ 1 million and immediately using it completely, an organization may face the fact that an increase in the price of shares (for the sake of which the investment was actually made) will lead to a technical violation of the limit and, therefore, an unjustified reduction in the position.

Calculation of the value with periodic (not daily) revaluation - imply revaluation of positions and portfolios once during a certain period, in relation to the adoption of management decisions high level regarding position/portfolio and limits.

For example, the management of an organization may make decisions about the amount of investment in shares once a month. By the time the decision is made, positions are revalued (profits and losses, including unrealized ones, are "realized" from the point of view of management accounting). Until the next revision of the investment structure, the value of the position is changed by the amount of payments on the portfolio (increased by the amount paid for the purchased assets, and decreased by the amount received from the sale of assets).

On the one hand, this approach maintains the relevance of the limited value (it reflects the amount of diversion into limited instruments), on the other hand, it excludes the impact of short-term unrealized income/expenses.

--Limits on position characteristics, on weighted volume

Limiting the volume of positions may not be sufficient to effectively limit risks, since in the case of portfolio limitation or a position formed from various instruments, the real risk is determined not only by the volume, but also by the structure of the portfolio. For example, in such cases, it is advisable to limit the risk of certain characteristics of the portfolio, most often the specific delta sensitivity coefficients to various risk factors. Examples of such limits are limits on the modified duration of a bond portfolio or the beta of an equity portfolio.

It is possible to set a limit that combines volume limiting and limiting the portfolio structure or position - a limit on a weighted volume. In this case, each individual instrument must be taken into account when calculating the limit value with a weighting coefficient characterizing its risk. An example of such a coefficient can also be a modified duration or a beta coefficient. For example, for a portfolio of bonds, it is possible to set a limit tied to an average modified duration of 1 year. At the same time, investments in bonds with a modified duration of 0.5 years in the amount of $1 million will be included in the calculation of the limit in the amount of $500,000.

- Structural limits (share limits, concentration limits)

Structural limits are understood as restrictions on the share of certain assets, liabilities, positions, claims and liabilities in the organization's balance sheet or some portfolio. The main task of structural limits should be considered the implementation of long-term strategies for the development of the organization, including, in particular, limiting funding liquidity risks, ensuring proper diversification of assets and liabilities (concentration limits). Groups of limited assets, liabilities, positions, as a rule, are wider than the groups used when setting position limits.

The establishment of structural limits can be carried out both at the level of individual groups of instruments, and at the level of their characteristics, possibly in several planes. So, for example, in the first approach, when limiting the assets of an organization, it is possible to set shares for investments in commercial loans, liquid securities denominated in rubles, foreign currency bonds, etc. Another approach would be to set the following share limits:

By investment currencies;

By the urgency of investments - up to 1 day, up to a week to a month, etc.;

By levels of accepted operational risks.

However, both of these approaches can be used simultaneously.

Unlike positional limits, structural limits do not lose their relevance when the organization's balance sheet currency changes. Because of this, the lifetime of structural limits is longer than positional limits - they are subject to revision when the company's strategy changes and the macroeconomic situation changes significantly.

Structural limits serve as the basis for determining positional limits, which are set and reviewed more frequently to implement the strategy set by structural limits and reflect ongoing changes in market conditions and the size of the organization's balance sheet.

A feature of structural limits that should be emphasized is the completeness of their coverage of the balance sheet and operations of the organization. If positional limits can be set only for certain groups of assets, liabilities of operations (primarily trading), then a qualitative system of structural limits should cover all operations of the organization, being a means of distributing the "risk capital" of the organization for certain types of activities. Those. each of the structural limits must somehow be tied to the amount of "risk capital". The total amount of "risk capital" linked to all structural limits should be equal to the sum of the bank's "risk capital".

It is also important to emphasize that, by their very nature, structural limits serve more than just risk management purposes. First of all, structural limits are a mechanism for formally determining the strategy of the bank, i.e. when they are established, not only possible losses are taken into account, but also ways to achieve the strategic goals of shareholders, maximizing the efficiency of its activities, taking into account the possibility of active work in certain markets, tasks and ways of interacting with subsidiaries, related structures, etc.

- Limits of financial result

Financial result limits, or as they are more commonly called "stop-loss" limits, are a hard limit on actually occurring losses on a portfolio or position. Violation of the "stop-loss" limit should cause the immediate closure of the position, the curtailment of some activity or a change in the strategy of the organization on one scale or another.

The establishment of these limits, as a rule, is carried out in close conjunction with positional limits. Position limits in this approach determine the marginal riskiness of a position/portfolio, assessed using one or another method, and the "stop-loss" allows you to cut off excess losses that may arise as a result of stressful situations not taken into account by the assessment, model errors used in risk assessment and etc.

Also, the stop-loss limit itself can serve as a mechanism for limiting risks (limiting losses). That is, within the framework of the position limit, it is possible to authorize the formation of a position on which, with a significant probability, significant, unacceptable losses may occur, and using the stop-loss limit, it is possible to determine the points of forced closing of a position in the event of a significant level of losses.

To set stop-loss limits, two ideologically different approaches can be used - setting limits from the standpoint of implementing a trading strategy and setting limits from the standpoint of money management.

The first approach implies the establishment of a limit as the definition of a "point of exit from the market" in the event of a situation where further operations are economically unpromising - they are highly likely not to bring an acceptable income. A classic example of such setting limits are "stop-loss" limits set by investors when trading securities or playing on the stock exchange. When deciding to invest in securities or some exchange instrument in the hope of their growth, a cautious investor determines the price level or the level of losses, the achievement of which will mean that his assumption about the upcoming market growth turned out to be erroneous. Most often, such levels are "support/resistance levels", the transition of prices through which means a fundamental change in market sentiment, a change in trends, and so on.

The "stop-loss" limit, set from the point of view of the implementation of the trading strategy, can limit both directly arising losses and price levels, the values ​​of indicators used in the technical analysis of the markets, and so on.

From the point of view of capital management, setting a stop-loss limit means the need to close positions, curtail certain activities in the event of losses that are unacceptable for the organization, regardless of market conditions. "Stop-loss" in this approach should be closely related to the concept of "risk capital". Within the limits of the "stop-loss" limits set, there should not be a situation when losses on a position/portfolio exceed the "risk-capital" tied to them. Naturally, this method implies limiting, first of all, actually occurring losses.

From the standpoint of risk management, the second method of setting a limit is of the greatest value. "Trading" stop-loss limits should be used rather by the business units of the organization that directly conduct transactions as an internal tool for managing operations.

An important difference between a stop-loss limit and position limits is that it does not so much restrict new transactions as it requires measures to limit the damage caused by previous transactions. Since any process of taking action requires a certain amount of time and costs, it is important to take them into account when setting a limit. Thus, when setting a limit on a market position, it is necessary to take into account those additional losses that may arise as a result of market slippage during the limit calculation, detection of a violation, the actual decision to close the position and its implementation.

In other words, "stop-loss" limits should be somewhat tougher than the requirements determined by "risk capital" - losses should be fixed at lower levels. It is not desirable to set limits at "stress" levels, when significant market movements, sharp changes in losses and high risk assessment errors can lead to actual losses being significantly higher than the limit. It is also advisable to set indicative "stop-loss" limits at lower loss levels, violation of which will lead not to closing the position, but to taking measures to increase attention to the position, to accelerate the reaction to more serious losses.

- Setting limits on transactions with banks

The principle of assessing the financial condition of banks by determining the probability of default makes it possible to consider the limitation of operations from the positions adopted in the world practice of risk management, namely, in terms of determining and limiting losses that are possible when conducting transactions with this counterparty. The general approach to setting limits is determined by two main factors - market conditions and the level of risk that is acceptable from the point of view of the bank itself, which decides to set the limit.

In accordance with the stated approach, taking into account market conditions is reflected in the definition of a number of maximum limits on transactions with various groups of banks, depending on the volume of their assets. The bank's own attitude to risk is expressed in the risk tolerance indicator, which is the level of maximum allowable losses that the bank is ready to take when working with counterparties of this group for a long time, and is determined as a percentage of the maximum limit. The level of risk tolerance directly depends on the financial condition of the bank itself, which decides to set limits, in particular, on the amount of its capital, which is a resource for covering possible losses.

The basic limit on transactions, which will be discussed below, is set at the stage of quantitative analysis of the financial condition of the bank and is further adjusted in the course of expert analysis. The base limit depends on:

Counterparty default probabilities calculated based on model data,

The established volume of the maximum limit on transactions with this group of banks,

The level of risk tolerance of the bank making the decision.

The basic limit is set in such a way that potential losses from transactions with this counterparty do not exceed the acceptable amount of possible losses, determined by the risk tolerance indicator. In other words, the limit is the amount of funds, the loss of which with a certain probability (probability of default of the counterparty) is acceptable for the creditor bank. The volume of the basic limit is inversely proportional to the level of default probability, therefore, with probabilities close to zero and, consequently, the volume of the limit tending to an infinitely large value, the limitation of the maximum volume of limits on transactions with this group of banks comes into force. With default probabilities close to 100%, the volume of the basic limit approaches the acceptable volume of possible losses, calculated in accordance with the creditor bank's risk tolerance.

Thus, the established limit is a quantitative characteristic of the volume of possible losses in transactions with counterparties, which logically fully corresponds to the economic meaning of limiting transactions as a way to limit risks.

Summing up, I would like to note that the described approach to assessing the condition of banks and setting limits on a counterparty, carried out from the standpoint of assessing the probability of default, allows:

Avoid the influence of subjective assessments at the stage of quantitative assessment of the financial condition of the bank;

Obtain a clear assessment of the financial condition of the bank in the form of the degree of "similarity" of its condition with the financial condition of banks whose licenses were revoked;

Get a "transparent" indicator of the limit volume, which is a reaction to the unreliability of the borrower and allows you to assess the compliance of the risks taken with the current financial condition and needs of the bank;

Bring limits on market instruments and counterparties to a single scale by using a general probabilistic approach to the problem of risk assessment.

-Technology for setting limits

In the absence of negative trends in the development of the counterparty, a conditionally positive conclusion about its financial condition, a positive conclusion from its own and third-party experts analyzing criminal and other negative / positive aspects in the life of the counterparty, the limits on interbank transactions are directly calculated.

It is desirable that the methodology for assessing the financial condition and software for analyzing the balances of counterparties make it possible to calculate the preliminary credit limit LC (“line of credit”) based on analytical indicators characterizing the state of the Counterparty.

When calculating the real basic RLC limit (“real line of credit”), obtained on the basis of the LC lending limit, it is necessary to impose several additional restrictions, primarily related to the own capabilities of the Bank setting the limit.

We list several possible restrictions on setting the basic RLC limit:

RLC<=c *Anet, то есть устанавливаемый лимит на однодневные операции МБК не может быть более определенной, устанавливаемой эмпирически доли (обычно несколько процентов) от чистых активов Контрагента.

For ultra-reliable borrowers (which are discussed below), the base limit is determined based on the maximum risk per borrower set by the bank:

RLC<=maxRisk, где: maxRisk - нормативная величина риска на одного заемщика (по ЦБ РФ она составляет 25 % от собственного капитала банка-кредитора).

Note that this value is one of the fundamental internal standards of the bank's activities. The calculation should be done not by regulatory capital, but by net capital. Depending on the strategy and credit policy, the internal standard risk per borrower may be (and in our opinion should be) less than the norm of prudential supervision.

RLC<= mProfit

To facilitate the limit approval procedure, the following classification of Counterparties is possible:

R0 - state-owned or systemically important counterparty banks with a high reputation and close ties with government agencies, the solvency and creditworthiness of which is beyond doubt. For example, Sberbank of the Russian Federation. The question of the value of the limit is only in the needs of the Bank (in the “production need”).

R1 - counterparties with stable balances, high turnover, solid customer base. The calculated LCR limit may be exceeded. It is acceptable to conduct a quarterly detailed analysis of the financial condition of banks in this category.

R2 - stable and dynamically developing counterparties with a limit for at least the last 3 months. There may be a slight increase in the limit.

R3 - counterparties whose balance requires monthly monitoring. Raising the limit is out of the question.

R4 - counterparties whose balance requires monthly monitoring, but did not submit their balance in a timely manner. You can only raise the question of reducing or closing the limit.

R5 - counterparties in which the bank is interested in making client payments through a correspondent account of the "Nostro" type.

R6 - counterparties with which the bank does not work, but has an interbank agreement.

R7 - all others (their balances are needed to improve the method).

Of course, you should not thoughtlessly follow the values ​​​​of the formulas for calculating the lending limit. The formulas for calculating LC and RLC are of a general nature, since estimates are made on the basis of average statistical data. The limit for individual counterparties can be increased or decreased, based on the actual volume of transactions with them and the degree of presence of this counterparty in a particular sector of the financial market, taking into account the opinion of experts. For ultra-short transactions, it is possible to increase the limit for Counterparties from groups RO, R1, R2.

The formula for calculating the limit for a specific type of operation is as follows:

RLC(i) = k(i)*RLC,

Where k(i) is a normalizing coefficient depending on the term and type of operation (MBK=1, FOREX, SWAP, bill, etc.).

Based on the results of the analysis and calculation of limits, the Financial Risk Department prepares a draft table of limits broken down by counterparties and types of transactions and submits for consideration by the relevant collegial body of the Bank (which is discussed below).

The table with the draft limits must contain, among other things, the draft according to the values ​​of the so-called “General Limit”, since the Bank can perform several types of interbank transactions simultaneously. Their amount should not exceed the value of the “total limit”. “general limit” limits the amount of the current obligations of the Counterparty to the Bank. The distribution of amounts by types of operations of simultaneously conducted transactions is decided by the operational management bodies of the Bank in the current order.

Checkout limit

-Normative base

Cash desk, cash documents, cash... These attributes of economic activity are present in any enterprise, no matter how large or, conversely, small it may be, no matter what taxation system it applies. Therefore, the topic of cash circulation is more or less relevant for the vast majority of enterprises. And if we rank the most frequently asked questions by accountants on cash circulation, then the palm will undoubtedly belong to issues related to the cash limit.

The main documents regulating the actions of organizations in the implementation of cash transactions are:

Regulation on the Rules of Cash Circulation in the Territory of the Russian Federation No. 14-P dated January 5, 1998 (approved by the Board of Directors of the Bank of Russia on December 19, 1997 No. 47; hereinafter referred to as the Regulation);

The procedure for conducting cash transactions in the Russian Federation (approved by the decision of the Board of Directors of the Bank of Russia dated September 22, 1993 No. 40; hereinafter referred to as the procedure).

These documents establish the rules for accepting and issuing cash, processing cash documents, maintaining a cash book, auditing the cash register and monitoring compliance with settlement and cash discipline.

So, cash can be kept at the cash desk of the organization only within the limits of the cash balance established by the servicing bank (clause 2.5 of the regulation). This limit is set by servicing banks annually to all organizations that have a cash desk and carry out cash settlements, regardless of the legal form and field of activity.

-Filling out the calculation

To establish the amount of the limit, the organization submits to the bank providing settlement and cash services a special calculation in the form No.

The limit of the cash balance is determined based on the volume of cash turnover of the organization, taking into account the peculiarities of the mode of its activity, the procedure and terms for depositing cash to the bank, ensuring the safety and reducing the oncoming transportation of valuables.

For organizations that have cash receipts and donate cash to the bank daily at the end of the working day, the cash balance limit is set in the amount necessary to ensure their normal work from the morning of the next day.

If an organization has cash receipts and deposits cash in the bank the next day, then the cash balance limit for it is set within the average daily cash receipts.

For organizations that have cash receipts and donate cash to the bank not daily, the cash balance limit is determined depending on the established deadlines for delivery and the amount of cash receipts.

For organizations that do not have cash receipts, the cash balance limit is set within the average daily cash flow (except for wages, social payments and scholarships).

Based on this, in the calculation it is required to bring the values ​​​​of the average daily revenue and the average daily expense. They are also calculated by dividing the total amount of revenue received (expenses incurred) for the last three months by the number of working days.

In the calculation, in addition to bringing the requested amount of the limit, the organization also indicates the frequency of depositing funds to the bank.

Recall that the "overlimit" cash generated in the cash desk, the organization must hand over to the bank. It can be kept at the cash desk for three working days (for enterprises located in the Far North and equivalent areas - up to five days), including the day the money is received from the bank, cash in excess of the established limits only when paying wages, paying social nature and scholarship. After this period, the amounts of cash not used for their intended purpose shall be returned to the bank.

As mentioned above, organizations can donate cash to the bank daily, the next day, or once every few days. The provision stipulates the possibility of applying each option. Organizations located in a settlement where there are no banking institutions, as well as those located at a remote distance from them, can be set a deadline for submitting an “excess limit” every few days. Cash withdrawals exceeding the established limit on the next day may be provided to organizations that, due to the specifics of their activities and mode of operation, as well as in the absence of an evening collection or evening cash desk of a bank institution, cannot withdraw cash every day at the end of the working day. All other organizations will need to hand over the "extra" amount on the day the cash is received at the cash desk (clause 2.4 of the regulation).

The last position to be filled in the calculation is an indication of the purpose for which it is supposed to use the received cash proceeds. Thus, the regulation clarifies that organizations can spend the cash proceeds incoming to their cash desk only in agreement with the banking institutions serving them and only for the purposes provided for by federal laws and other legal acts in force on the territory of the Russian Federation, and adopted by the Bank's regulations Russia.

Salary and social payments;

Purchase of agricultural products from the population;

Buying up containers and things from the population;

Travel expenses;

Purchase of stationery, household equipment and fuel and lubricants;

Payment for urgent repairs;

Payment of compensation for losses under insurance contracts for individuals (clause 3 of Bank of Russia Directive No. 360 dated November 12, 1996).

But at the same time, the documents do not spell out liability for misuse of proceeds.

Note that organizations do not have the right to accumulate cash in their cash desks for future expenses (including wages, social payments and scholarships) before the due date for their payment.

The calculation is submitted to the bank in two copies. The second copy with the decision of the servicing bank on the limit of the cash balance and a list of possible expenditure items is returned to the client.

- Features of setting a cash limit

Usually, the cash balance limit is set by the bank for a calendar year. However, it may be reviewed during the year at the reasonable request of the organization. As a justification, a sharp increase in the volume of cash turnover or a change in the conditions for the delivery of the “overlimit” are quite suitable. The organization submits to the bank a calculation in which it provides new data.

Quite often, organizations enter into agreements for settlement and cash services with several banks. Does the organization need to submit the above calculation to all servicing banks in this case? The regulation requires the organization to apply with the calculation to one of the servicing banks. After the bank establishes a cash balance limit, the organization sends notifications about the limit determined by it to other banks in which it has opened accounts. When checking this organization, all banks will be guided by this particular value of the cash balance limit on hand.

The presence in the organization of separate divisions that do not have an independent balance sheet and bank accounts will somewhat add work to accounting services. As for any organization, in this case, a cash balance limit will be set. And it is the same for the organization as a whole. Therefore, the amount of balances in the cash desks of separate subdivisions at the end of the day should not exceed the established value. Therefore, it is advisable by order of the head to annually bring the limit of the cash balance to each structural unit.

If separate subdivisions have a separate balance sheet and settlement accounts with banks, then for them the limit of the cash balance on hand is set by the servicing banks at the place where the corresponding accounts of the structural subdivisions are opened.

Failure to submit a calculation for setting a limit on the balance of cash on hand to any of the servicing banks leads to the fact that the limit on the balance of the organization's cash balance will be considered zero. In this case, cash not handed over to the bank is considered to be in excess of the limit. And this may entail the imposition of penalties for violation of the rules of cash circulation.

- Terms of setting a limit

One of the innovations of Regulation No. 637, which entered into force on February 14, 2005, was the independent establishment of a cash limit by enterprises.

Therefore, those enterprises that started their activities after this date did not have any questions about the timing of setting the limit. It is clear that the enterprise itself is primarily interested in setting the limit. Indeed, otherwise the limit is zero, which means that cash cannot be left at the cash desk of the enterprise (except in some cases, which we will talk about later). And newly created enterprises should make sure that the limit is set as soon as possible after the start of activity.

But what about those enterprises for which, before the entry into force of Regulation No. 637, a cash limit was set by the bank, and at the same time the size of the limit fully satisfies the enterprise? According to clause 5.13 of Regulation No. 637, enterprises could use the previously approved limits until they are reviewed “which is carried out in order to ensure compliance” with the requirements of Regulation No. 637. Thus, these enterprises must calculate the allowable limit amount that meets the requirements of the Regulation and compare the result with limit set by the bank. If the size of the "old" limit does not exceed the allowable value, it can be left unchanged. If the allowable value is less than the limit set by the bank, an order (instruction) should be issued to change the limit (set a new limit on the cash balance on hand).

In the future, the cash limit is subject to revision in several cases:

Due to changes in legislation;

With an increase in cash receipts / expenditures. In this case, upward revision of the cash limit is not mandatory, but is carried out at the request of the enterprise;

With a decrease in the receipt / expenditure of cash, which leads to a decrease in the maximum allowable limit, determined on the basis of Regulation No. 637. If, under these circumstances, the cash limit is not reviewed, then the enterprise may face a fine situation;

If there are other factors that may affect the procedure for receiving or spending cash and, accordingly, the calculation of the limit value (changes in the internal labor schedule, shift schedule, etc.).

- The procedure for calculating the limit, restrictions

The cash limit is set on the basis of a calculation drawn up in the form given in Annex 2 to Regulation No. 637. Enterprises that have separate subdivisions in which cash transactions are carried out make a calculation of the cash limit for the enterprise as a whole and a separate calculation for each separate subdivision. The established limit is brought to the attention of separate subdivisions by orders (instructions) of the head of the enterprise - a legal entity.

As stated in clause 5.3 of Regulation No. 637, trade, catering and service enterprises set a cash limit based on the calculation of the average daily cash receipts at the cash desk.

And other enterprises (not included in the category of trade, public catering and services enterprises) are given the right to choose the method for calculating the limit value: based on the calculation of the average daily cash receipt or its average daily withdrawal from the cash desk.

For some reason, the developers of Regulation No. 637 did not specify which trade, public catering and service enterprises are mentioned in paragraph 5.3: all or only those that trade (provide services) for cash. But this is very important. Assume that a trade enterprise sells goods with cashless settlements. Such an enterprise has no (or almost no) cash receipts. And there is cash spending (the company receives cash from the bank and spends it on the purchase of goods). Such an enterprise should not take risks and calculate the amount of the limit based on the amount of the average daily cash withdrawal from the cash desk. Indeed, on a formal basis, this is a trade enterprise, which means that it must calculate the limit on the amount of cash receipts.

Under any method of calculating the limit, enterprises must determine the amount of cash receipts (expenditures) for any three consecutive months of the twelve months preceding the month in which the cash limit is set.

- How to calculate the limit

The cash limit is approved for a year. To do this, they draw up a Calculation for setting a cash balance limit for the enterprise and obtaining permission to spend cash from the proceeds received by its cash desk for ___ year (form N 0408020; hereinafter - Calculation). A typical form of this Calculation is given in Appendix 1 to Regulation N 14-P.

This paper should be submitted to the bank serving the company. If the enterprise works with several banks at once, then the Calculation can be submitted in any of them. After the limit is set, a notification about this must be sent to other credit organizations where current accounts are opened.

Let's move on to filling. At the beginning of the Calculation, the name of the enterprise, the account number and the name of the servicing bank are indicated.

Next, the calculations begin. First, they take cash receipts for the last three months. Moreover, despite the fact that the Calculation says "revenue", in fact, in practice, accountants indicate all receipts to the cashier. This is logical - after all, when checking the limit, all cash is considered. Yes, and banks, as a rule, agree with this approach.

As for the newly created organizations, they proceed from the expected revenue.

Then the three-month revenue is divided by the number of working days in this period. This is the average daily income. And to calculate the average hourly revenue, you need to divide the three-month revenue by the number of working hours.

After that, they move on to expenses. Here, first of all, they determine how much has been issued in cash over the past three months (with the exception of salaries, scholarships and benefits). New firms, as in the case of income, start from the estimated cost. By dividing the result by the number of working days in this period, the average daily expense is obtained.

The next stage: the company indicates the time frame in which it wants to hand over the proceeds. This can happen daily, the next day, once every few days. In order for the bank to later determine how justified the choice is, the accountant gives the time of the company's work, as well as the time of delivery of the proceeds - to the joint cash desk at the enterprise, to collectors, to the bank's cash desk, to the post office.

If the company has a standard working day, say from 9.00 to 19.00, and the bank or post office is not very far away, then the proceeds can be handed over daily. In such a case, the bank sets such a limit so that the enterprise can work normally from the morning of the next day.

But, let's say the company is open late and does not fit into the bank's operating day. Such an organization should find out if the servicing bank has an evening cash desk or evening collection services. If not, then the due date will be "the next day".

The situation is different with enterprises that are far from banks and post offices. Such a firm may be allowed to hand over the proceeds once every few days, and the limit will be made equal to several average daily receipts.

Also in a special situation is a company that works on weekends and holidays. If it is located in a large city, then the proceeds will still be taken daily: the company will prescribe the condition for collection on the weekend in the contract with the credit institution. If the enterprise is far from "civilization", then it may ask the bank to set a cash withdrawal deadline "once in ___ days". For example, once every three days - then the proceeds for Saturday and Sunday can be handed over on Monday.

Next, enter the desired amount of the limit. Usually it is indicated in a larger amount than the difference between the average daily revenue and the average daily expense. After all, the goal of the enterprise is to win back the largest possible limit. And the bank is already deciding whether it is possible to meet the company halfway.

If the organization did not have cash receipts, then the limit will be set within the limits of the average daily expense (excluding salaries, benefits and stipends). This is stated in paragraph 2.5 of Regulation N 14-P.

The Calculation also indicates the purposes for which the company is going to spend the proceeds. Here you can write down: for wages and social and labor benefits, for travel expenses, the purchase of stationery, fuel and lubricants and household equipment, for urgent repairs. However, if the organization uses cash proceeds for purposes not specified in the Calculation, nothing threatens it.

The calculation of the cash balance limit is made in two copies. Each of them is signed by the head and chief accountant of the company. Further, their signatures are certified by the seal of the enterprise. One copy of the Calculation remains in the accounting department, while the other is taken to the bank for approval.

The credit organization writes down its conclusions in the "Decision of the Bank's Institution" section. Here they indicate the amount of the established limit, as well as the purposes for which it is allowed to spend the proceeds. The permission is signed by the head of the bank.

-Responsibility for the accumulation of funds in excess of the established limit

For the accumulation of funds in excess of the established limit, administrative liability is provided. It is established by Article 15.1 of the Code of Administrative Offenses of the Russian Federation. An administrative fine can be imposed both on officials and on a legal entity. The amount of the administrative fine imposed on officials is set in the range of 40 to 50 minimum wages. When a fine is imposed on a legal entity, its value reaches 400-500 minimum wages.

The Code of Administrative Offenses of the Russian Federation also determined the administrative procedure for considering cases of violations of the procedure for working with cash. The tax authorities consider cases of such an administrative offense (clause 23.5 of the Code of Administrative Offenses of the Russian Federation). Moreover, they have the right to consider them on behalf of the tax authorities:

Head of the Ministry of Taxation of Russia and his deputies;

Heads of territorial departments of the Ministry of Taxes and Taxes of Russia for the subjects of the Russian Federation and their deputies;

Heads of territorial bodies of the Ministry of Taxation of Russia in cities and regions.

A decision on a case concerning an administrative offense cannot be issued after two months have elapsed from the day the administrative offense was committed. In the event of a continuing administrative offense, the period during which a decision must be issued begins to be calculated from the day the administrative offense is discovered (Article 4.5 of the Code of Administrative Offenses of the Russian Federation).

Broker limit

The brokerage limit implies the work of the broker on a limited order. A limit order provides for the execution of a transaction at a price set by the client (or more favorable). This price is fixed in the ticket (a document containing the customer's instructions, as well as the report and instructions of the broker who executed the order).

If you instruct your broker to trade a particular stock at a certain price (or the best price), you generate a limit order. A buy limit order will be executed at or below the specified price. A sell limit order will be executed at or above the specified price.

This order is carried out by those investors who have decided on the price at which they want to buy or sell this or that share. Such an order may be more expensive to execute than a market order.

Stop orders are usually placed for the period when the trader is absent from the workplace and their main task is to save the trader from ruin (execution of stop losses) or to provide additional profit (stop profit).

In a fast moving market, place orders at no fixed price that have an absolute chance of being filled.

If the market is sluggish, then place orders with the definition of the execution price, this way you will protect yourself from the unfavorable price of the order execution.

It is best to refrain from placing stop losses, or you may find yourself in a situation where your order was filled and you took a lot of losses, and by the time you arrived at work you could have closed the position at a better price, if not at all without losses. In this case, if you are afraid of a price change that is unfavorable for you, it would be much better to close this position while you are away from the market.

Stop profit (take profit). The amount of take profit will depend on your calculation of the expected rate dynamics and your desire to make money on one transaction. If you have already exceeded your earnings plan from this position, and the analysis says that it is too early to stop, then close some of the positions. At the same time - do not revise your plans too often. Don't get carried away.

Stop loss. The size of the stop loss, firstly, depends on how much you are willing to lose on one transaction and, secondly, on your calculation of the market situation. Please use the following rules:

When making any exchange transaction, you cannot lose more than 2 percent of the amount of your deposit. As soon as you have crossed this line - close the position;

Set a limit on the maximum loss you can afford to lose in one calendar month. As a rule, it is equal to 6-8 percent of the deposit amount. If you have already crossed this milestone - stop operations in this month before the start of the next.

Contract limit

Before the infamous crash of 1987, stocks and stock index futures were allowed to trade without restrictions. But during the crash and in the days that followed, there was concern, especially among regulators, that a free fall could do significant damage to the market, both economically and psychologically. Thus limits were born.

For example, the New York Stock Exchange (NYSE) has "safeguards" designed to "reduce volatility and build investor confidence") by restricting trading and sometimes temporarily stopping trading after major market movements. Similarly, the Chicago Mercantile Exchange has limits on its S&P and NASDAQ stock index futures contracts. These limits were adopted as part of a "compromise" that kept Washington regulators from imposing severe restrictions on futures trading after the 1987 crash.

Limits are regularly adjusted to reflect prevailing market conditions.

In theory, limits act like brakes, slowing down the downward movement. But in reality, I believe they often act as target points, at least psychologically. For this reason, I am in the camp against trading limits (and I remember the days when they were not.) Limits, in my opinion, introduce an element of artificiality into the markets. If the net momentum is sufficient to cause the S&P to move 30.00 points, the market should be allowed to trade to that level unhindered. But that's not the point.

Limits exist to give the market a chance to catch its collective breath. No more free falls. No 5600-point moves down at the open, as happened on the Thursday open after the 1987 crash. Limits, however, have become targets. They are part of the "how low can he go?" mentality sometimes adopted by traders in the market.

The Chicago Mercantile Exchange publishes on its website the most up-to-date stock index futures limits, as well as frequently asked questions about these limits.

Once the ask price is entered at a limit level, trading can only occur at or above that level for 10 minutes, or until 2:30 pm Central Time. If at the end of these 10 minutes the ask price of the contract is at the limit level, trading stops for two minutes. After that, trading resumes, but with a 5% limit.

Once a futures contract hits the bottom limit on the ask price, the price of the cash contract becomes the most important factor. It is important for a trader to know exactly where the cash contract was trading when the limit is reached in the futures contract market. So while you can't trade futures (which happens to be "limit-locked"), you can see fluctuations in the underlying cash market. You can tell from cash market activity whether the limit in the futures market was caused by a large-scale selling or just by a single futures seller moving the market lower in the expectation that it would probably bounce back after the limit expired.

If the future touches the lower limit and the cash contract starts ticking up, chances are that the future will break off the limit after 10 minutes (i.e. trade above the limit). Watching the cash market is very important to understand how the futures will trade after the limit expires.

If the futures price deviated from the previous quotation price by an amount equal to several limit intervals, then trading in the contract over the next days will be opened and immediately closed without making any transactions.

This situation will continue until the futures price is within the limits of the limit interval. Price limits are not set for contracts of the current month. This is done to facilitate the liquidation of positions on contracts that are expiring. Daily limits are set on US exchanges and are used to a lesser extent on exchanges in other countries.

The rules of the New York Mercantile Exchange govern the limitation procedure as follows.

If the settlement price of any month reaches the maximum value, then the size of the maximum price fluctuation is increased by 50% of the initial price for all months at the next session.

If the settlement price of any month during the session for which the maximum fluctuation limit was set in accordance with paragraph 1 changes again in the same direction to the limit value, then the fluctuation limit for all months for the next session will be equal to twice the original limit.

This increased limit will be in effect on all subsequent sessions of the exchange until, in any session, the settlement price of any month does not reach the extended limit of fluctuations in the same direction. At the next session after this session, the limits for all months return to their original value.

It should be noted that the changing limit, despite the complexity of the mechanism of its application, has been very useful for exchange trading more than once, especially in situations where a hard limit could become an artificial barrier to trading in contracts, the prices of which are rapidly rising or falling due to dramatic changes in the balance sheet. supply and demand.

The variable limit is a compromise between hard limits and no limits at all.

Price limit

The price limit is the maximum allowable rise or fall in prices during one exchange session. Introduced in some commodity and securities markets (mainly in the US) to prevent excessive price fluctuations and mitigate the impact of speculative factors on prices.

The maximum possible price deviations up or down are set from the price level at the close of the exchange on the previous day. Limits of price fluctuations are not set only for positions for which the time for delivery of goods comes.

On the British commodity exchanges, there are no maximum limits for price fluctuations during the day. True, in operations with coffee, cocoa and sugar, if the price change during the day exceeds a certain amount, trading stops for 30 minutes, and then resumes within the framework of a special exchange session, where price changes are no longer limited.

Limit prices characterize the maximum allowable level of production costs, upon reaching which the economic effect is provided for the consumer of new equipment. as well as the interest of the manufacturer in the production of new types of products. Limit pricing helps prevent the development of inefficient technology in the early stages of design and focuses design efforts on truly innovative and cost-effective products. In diploma design, the most common case of calculating limit prices is the calculation of marginal costs for new products intended to replace previously mastered products or interchangeable with them.

The limit price in this case shows that the consumer is equally interested in using both new and old equipment he has.

In the graduation project, it should be calculated in the technical part of the project and serves as a limiting value and a guideline when calculating the wholesale price of the designed product, at the same time, it must take into account the possibility of reducing the cost of the product in conditions of mass production as a result of technical progress and growth based on it, labor productivity from the moment of issue terms of reference before mastering the release of new products.

Limit prices are determined by the stages of design preparation of production in order to assess the economic and social feasibility of developing new products with specified technical and economic parameters, relative cost reduction per unit of final beneficial effect.

The limit price of new products is calculated according to the formula, where S is the cost price by design stages, rub.; Mon - standard profit (share of profit in the price of the product), rub.

Credit limit

Credits to enterprises and organizations are provided, as a rule, on the basis of lending limits, and in cases provided for by law - without limits.

Lending limit - the maximum loan amount set for individual objects in accordance with the credit plan of the State Bank. The limit approved by the enterprise entitles it to receive loans, subject to the basic principles of direct bank credit. This right may not be used by the enterprise if it no longer needs borrowed funds or if the bank, for reasons of financial control, does not provide a loan at the moment. Credit limits are applied in the form of debt limits and lending limits.

The following debt limits are distinguished: weekend, intra-quarter, declining debt limit and credit control figure.

The exit limit is entered on the balance of debt at the end of the current quarter (since credit plans are drawn up for each quarter). It determines the maximum allowable amount of credit debt for a given enterprise and a specific object in the planned quarter. The maturities of loans issued at the expense of the exit limit are set outside the planned quarter.

The intra-quarter limit is defined as the excess of the amount of debt within a quarter over the debt at the beginning or end of the current quarter. It is introduced when during the quarter there is unevenness in the delivery and sale of material assets and the size of the credited object within the quarter may exceed the amount of assets provided for at the end of the planning period. This situation most often occurs in seasonal industries - food, fish, meat, dairy, light, where the production cycle can begin or end within the planned quarter, while in general for the quarter the change in credited objects will not reflect the additional intra-quarter need for borrowed working capital, appearing due to the uneven receipt and expenditure of credited values ​​(or the implementation of costs).

Loans issued at the expense of the intra-quarter limit are repaid during the planned quarter.

A variation of the intra-quarter limit is the declining debt limit. It is introduced if the debt at the beginning of the quarter exceeds the planned one at the end of the quarter and it is necessary to ensure gradual (ten-day, two-week, etc.) repayment of debt during the quarter and bring it to the exit limit by the end of the quarter.

The disbursement limit determines the amount of the bank's loan issued in the current planning period. Such limits are used for short-term lending, for example, when lending to collective farms for their production needs, for the costs of agriculture; to determine the limit here, they proceed from the planned amount of forthcoming disbursements for this purpose. These limits are set for long-term lending to collective farms and consumer cooperation for the expansion of fixed production assets, for individual housing construction, as well as for enterprises in all sectors of the national economy when crediting the costs of introducing new equipment, expanding the production of consumer goods, and building cinemas.

The credit control figure represents the exit debt limit with the difference that the actual amount of the loan granted may fluctuate both in the direction of excess, current and in the direction of its underutilization. Fluctuations are possible because the credit provided on the basis of the control figure is in the nature of a payment credit for material assets, the amount of which cannot be constant due to uneven supply and sales of products, temporary deviations in the course of the implementation of economic plans (for example, increased imports to ensure overfulfillment of the plan for the production of products needed by the state). The size of the use of the control figure is also affected by the acceleration of inventory turnover. In cases where exceeding the target figures is unlawful (for example, the importation of excess stocks), bank institutions monitor the state of loan debt, study the reasons for these excesses and take measures to ensure that the target lending figures correspond to the planned size of the bank's participation in covering inventories industrial enterprises and goods from supplying sales organizations.

Without limits, loans are issued to procurement organizations for seasonal accumulation of agricultural raw materials, against settlement documents on the way, and payment loans to buyers.

The purpose of credit limits (or lines of credit, as they sometimes say) is to establish the level of financial relationship that the seller is willing to maintain with the client. As stated above, the credit limit itself should not be used as an indicator of the estimated level of risk; this function is better filled when using the risk category.

Credit limits are sometimes set on the basis of an arithmetic ratio to one or more financial ratios that reflect the state of affairs of the client, for example, 10% of net current assets or 20% of equity, sometimes weighted aggregate financial ratios are used. Although these methods are suitable under certain circumstances, none of them is widely used enough to be recommended as universal. Moreover, since they are obviously linked directly to the financial situation of the client, they are more likely to be indicators of risk than an acceptable level of lending.

In setting credit limits, the credit manager should never lose sight of the primary purpose of granting credit, which is to help and support customers by satisfying their requirements for goods and services to the extent possible, and thus enabling sellers to maximize sales benefits. Different credit limits may be set for two clients in the same financial situation. For example, customer X intends to buy a standard product offered in high volume at a modest markup to a large and diverse group of buyers, most of whom are considered "secured" (risk categories A and B).

The seller's incentive to take substantially higher than average risk in order to increase the profit from the sale of this product is weak, since the return will not exceed the average, and the goods will in any case find a market without additional risk. On the other hand, customer Y may be a potential buyer of another item whose seller has a large, slow-moving inventory, or the item is outdated, seasonal, or has an unusually high markup, or perhaps a combination of these factors.

It is clear that in this case the seller's incentives are stronger, and in these circumstances the credit manager is usually free to grant client Y a higher credit limit than client X, even if, according to financial criteria alone, their risks are the same. This general example can serve as an indication of the need for a credit manager to have close ties with colleagues in sales and marketing, as significant transaction opportunities must be valued based on the overall benefit to the company.

It is important to understand that empirical methods for establishing credit limits cannot prevent irrational transactions or eliminate conflicts between the credit and sales functions. The lending decision should actually form part of the overall transaction decision made on behalf of the company and should not be considered in isolation.

This is the rationale for a strategic approach to credit risk management. If it is assumed as a premise that the majority of transactions involve risk and the company has debtors with an above-average risk rating, then one must decide what proportion of accounts receivable is acceptable. Based on this, the level of high-risk operations corresponding to the financial goals of the enterprise can be set.

For example, if management determines that it is in the best interest of the company to have a high-risk receivable of 10% of total payments due, then with a total receivable of £1,000,000, the target level of high-risk accounts receivable would be £100,000 and, accordingly, the total receivables should increase as a result of sales growth.

As a result of this regulatory decision, the credit manager has clear criteria for determining the amount of guarantees for high-risk clients. A strategic approach to debt management reinforces confidence that where high risks are accepted, they are appropriately managed, and the result of such operations is an improvement in the company's overall position in terms of profitability.

Market risk limit

The following limits can be used to manage the market risks of corporate stocks (assuming risk assessment based on one major stock index):

Volume limit - a limit on the total market value of the portfolio. Allows you to roughly limit market risks. The market value of the portfolio does not take into account the riskiness of investments in the shares of individual issuers, in particular, the "beta" coefficients of the shares.

The limit on the weighted average "beta" - coefficient - allows you to limit the marginal riskiness of the portfolio compared to the market as a whole. For example, a beta limit of 1 means that the portfolio cannot be more risky than the stock index, that is, it cannot be more aggressive than the stock market as a whole.

Limit on the beta-weighted average portfolio - limits the product of the market value of the portfolio and the beta-coefficient. Allows you to flexibly limit market risk, because the limit value is a measure of the absolute sensitivity to the volatility of the stock index.

A limit on the absolute possible volume of losses or a limit on VaR - allows you to effectively limit risks, but it is difficult for traders to quickly calculate and understand.

When setting market risk limits depending on the horizon for assessing possible losses, it may be advisable to take into account non-systematic risks associated with the shares of individual issuers.

When setting and calculating this limit, it is important to take into account two facts arising from the imperfection of the accounting of transactions with shares that exists in Russia:

Shares recorded on the organization's balance sheet are not revalued, therefore, the balance sheet item does not allow judging the real market value of the share portfolio.

The financial result on shares is recorded in accounting upon the sale of shares using one of the conditional methods - LIFO (the last purchased share is sold), FIFO (the first purchased share is sold) or at a weighted average price. As a result, the figure of the financial result reflected on the balance sheet, as well as the difference between the market and book value of the position, do not allow one to correctly judge the real current financial result, i.e. none of these quantities in itself can be the object of limitation.

In other words, it is extremely undesirable to rely on accounting when managing stock market risks. The value of the portfolio and its financial results must be calculated independently of the accounting data.

When setting and calculating limits on transactions with corporate shares, one should take into account the fact that a significant proportion of the risk-prone position can be formed at the expense of outstanding futures transactions. Therefore, a portfolio of securities should be understood not only as securities that are directly on the organization's accounts with depositories and registrars, but also unfulfilled requirements and obligations for the supply of securities.

Overdraft limit

The overdraft limit is the loan amount agreed in advance with the bank and set in an addendum to the bank account agreement, which is set as a percentage of the amount of average monthly cash receipts to the client's settlement (current) account with the bank.

The limit depends on the amount of average monthly receipts, but not more than 50% of the minimum monthly receipts on the client's account for the last 3 months. In practice, the limit rate ranges from 20-50% of the average monthly "net" income to the account.

The standard limit level for the Russian market is no more than 5 average daily receipts per account. When calculating averages, either the number of calendar days or the number of only working days are taken into account.

The amount of the limit is reviewed on a monthly basis depending on the size and range of turnovers on the client's account, as well as the control indicators of its financial condition. When the turnover on the account decreases, the limit decreases, on the contrary, the amount of the limit can be increased.

For a bank and its branches, minimum limits are usually set per client. In Russian practice - 500 thousand - 1 million rubles. (head bank), 100 thousand - 500 thousand rubles - branch.

Some Russian banks that provide overdraft loans to clients with an average monthly turnover of 100,000 rubles or more use a different method for setting the overdraft limit: its value is fixed at 50 to 80% of the calculated average daily income, the calculation of which does not take into account:

Funds received from loans provided by a bank or other banks;

Funds erroneously credited to the client's account;

Other receipts that distort information about real receipts to the client's account.

Limit of budget commitments

Limit of budgetary obligations - the volume of budgetary obligations, determined and approved for the manager and recipient of budgetary funds by the body executing the budget, for a period not exceeding three months.

Limits of budgetary obligations for managers and recipients of budgetary funds are approved by the body executing the budget, on the basis of distribution projects approved by the main managers of budgetary funds.

Limits of budgetary obligations are communicated to all managers and recipients of budgetary funds by the body executing the budget, no later than five days before the start of their validity period.

The consolidated register of limits of budgetary obligations for all managers and recipients of budgetary funds is submitted by the authorized executive body to the control body created by the legislative (representative) body.

The limit of budgetary obligations cannot differ from the volume of budgetary appropriations per quarter.

Changing the limits of budgetary obligations is possible without changing the budget allocations, if the body executing the budget has postponed the execution of the provided limits of budgetary obligations. The body executing the budget has the right to postpone the provision of the limit of budgetary obligations to managers and recipients of budgetary funds for a period of up to three months. At the same time, deferred budget obligations cannot exceed 10 percent of the budget allocations established for the quarter in which the budget obligations are deferred.

The authorized executive body, managers of budgetary funds are obliged to inform all subordinate managers and recipients of budgetary funds of changes in the limits of budgetary obligations no later than five days before the start of the period of validity of the changed limits of budgetary obligations.

Changes in the limits of budgetary obligations cannot be made after the expiration of half of their validity period.

Changes in the limits of budgetary obligations necessary for the execution of judicial acts providing for the foreclosure of funds from the budgets of the budgetary system of the Russian Federation are carried out without a time limit until the end of the financial year.

Limit of budgetary obligations - the maximum amount of rights for the recipient of budgetary funds to accept monetary obligations paid from the budget.

The limit of budgetary obligations is approved:

For the main managers of budgetary funds and direct recipients of budgetary funds - by the body executing the budget, on the basis of distribution projects approved by the main managers of budgetary funds;

For recipients of budgetary funds - by a higher body (the main manager or manager of budgetary funds).

Recipients of budgetary funds submit the approved limits to the treasury authorities.

Limits of budgetary obligations are determined and approved in accordance with codes of economic classification of budget expenditures; they must be communicated to the administrators and recipients of budgetary funds no later than 5 days from the start of their action.

The consolidated register of the limit of budgetary obligations for all administrators and recipients of budgetary funds is submitted by the authorized executive body to the control body of the legislative power.

Approved by the limit of budgetary obligations are the basis for the acceptance by the recipients of budgetary funds of their budgetary obligations. The limit of budgetary obligations cannot differ from the amount of budgetary appropriations provided for by the consolidated budget schedule per quarter.

A change in the limit of budget obligations is possible in the following cases: changes in budget allocations due to the introduction of a regime for reducing budget expenditures, budget execution on revenues in excess of those approved by the law (decision) on the budget, or due to the transfer of budget allocations by the main manager of budget funds; blocking expenses in case of budgetary sanctions; in case of delay by the body executing the budget, provided by the limit of budgetary obligations for a period not exceeding 3 months. and in an amount not exceeding 10% of the volume of budgetary appropriations for the quarter in which the deferment is made.

In accordance with Russian budgetary legislation, limits cannot be changed after half of their validity period has expired.

If the limit of budgetary obligations is not financed in full during the regulatory period, the recipient of budgetary funds is entitled to compensation in the amount of underfunding (i.e. the difference between the limit of budgetary funds communicated to the recipient of budgetary funds in the notification of the limit and the amount of funds written off from the budget of the account in favor of the recipient of budgetary funds during the period of the limit of budgetary obligations).

Compensation in the amount of underfunding is made on the basis of a court decision.

limit in insurance

-Insurance limit

The insurance limit is the maximum amount of money for which you can insure material assets, life, health, and so on, based on the risk assessment.

The insurance limit can be differentiated taking into account specific risk circumstances, for example, age, year of construction, vessel class, and so on.

In practice, the insurance limit is set by the insurer based on the accumulated statistics of accidents, natural disasters, injuries, deaths, etc. The initial information for setting the limit is contained in the insurance declaration or health declaration. The limit may be limited by the franchise, special conditions of the insurance contract, including special clauses. The right to establish an insurance limit may be transferred by the insurer to the surveyor.

-Limit of liability of the insurer

The maximum possible liability of the insurer arising from the conditions of the concluded insurance contract. The limit of liability of the insurer is fixed in the insurance policy. It can be established for a separate insured risk or for a separate insured event. In compulsory health insurance, the Liability Limit is limited to the list of medical services included in the basic health insurance program.

-Limit of insurance indemnity

The maximum amount of insurance compensation for one insured event, which can be independently paid by a structural unit of an insurance company (representative office, agency, branch), as well as insurance agents (usually in small amounts) that form a sales system.

The insurance indemnity limit is set by the board of the insurance company based on the average unprofitable sum insured over a number of years, as well as taking into account other factors (competition, investment, qualifications and competence of local personnel, and others).

Limits on nature use

Limits on nature use is a system of environmental restrictions on territories, which is the volumes of maximum use (withdrawal) of natural resources, emissions and discharges of pollutants into the environment and disposal of production waste established for enterprises - users of natural resources for a certain period.

Such limits are established by specially authorized state bodies of the Russian Federation in the field of environmental protection based on the need to gradually achieve the standard volumes of natural resource use, maximum allowable emissions and discharges of pollutants into the environment and standard volumes of production waste disposal, taking into account the environmental situation in the region.

Draft limits are developed by enterprises, institutions and organizations - users of natural resources - and approved by the Ministry of Natural Resources and Ecology of the Russian Federation (with the exception of limits for land acquisition for the construction of facilities, which are approved by the Ministry of Industry and Trade) in order to achieve standard volumes of natural resource use, maximum allowable emissions and discharges of pollutants into the environment and the standard volumes of disposal of production waste, taking into account the environmental situation in the region. Management of the work on determining the limits of nature use is carried out in the relevant territory by the executive authorities of the constituent entities of the Russian Federation, local governments together with the specially authorized bodies of the Russian Federation in the field of environmental protection and the use of natural resources.

Limits on nature use are set for a certain period for each type of used (withdrawn) natural resources, and can be revised taking into account the development of technology, improvement of technological processes, changes in the demand for this type of resource and its condition, as well as other factors.

The limits on nature use include:

Norms of land acquisition for the construction of roads and railways, airports, main pipelines, reclamation systems, etc.;

Water use limits - the maximum allowable volumes of withdrawal of water resources or discharge of wastewater of standard quality, which are set for a water user for a certain period;

Settlement cutting area - the rate of cutting wood, corresponding to its annual growth, which is established for each forestry, and in some cases - for each forestry and transferred to the use of a forest plot;

Limits on the use of objects of the animal world - are established when hunting, fishing, as well as the extraction of animals that are not classified as objects of hunting and fishing;

Limits on emissions and discharges of pollutants and microorganisms, on the disposal of production and consumption wastes and other types of negative impact on the environment.

The limitation of nature use, as well as licensing, is due to the limited reserves of natural resources.

Nature management can be carried out in two directions: the removal of natural matter from nature, the introduction of anthropogenic matter into nature.

Hence, the limitation is divided into two types:

Maximum permissible norms for the removal of natural substances from the natural environment.

Maximum allowable standards for emissions, discharges of harmful substances into the environment.

Limit order

Limit orders are best used in place of market orders as they offer a chance for better execution and less slippage than market orders. Usually the price makes small random fluctuations. The idea behind using limit orders is to place an order (to buy) at the bottom of these moves instead of placing a market order. A limit order will not move the market if it is small, and will almost always move it less than a market order if the order is large. To determine the best price for a limit order, you need to work for a certain time in the market.

Let's say you bet on the strengthening of the Euro and want to capitalize on it. To do this, you can use either a direct or reverse quote, or a cross rate. The difference is that the cross-rate currency pair does not use the US dollar, for example, EUR/GBP, EUR/CHF. Direct quotation is an expression of the amount of national currency per unit of foreign currency. Since the dollar is the world's reserve currency, we will call the direct quotation the one where it is in the first place: USD/JPY, USD/CAD, the reverse quote is where it is in the second place: EUR/USD, GBP/USD.

Suppose you have chosen the EUR/USD pair, as the most popular among traders, that is, in order to strengthen the single European currency, you make a purchase on the pair (buy). To bet on the growth of the Euro means to take a long position (long). Bet on a depreciation - take a short position (short). To open a position, you can make a market request to the broker through the trading terminal, i.e. buy on the market. The broker (this is the company through which you can buy and sell on Forex) sends a response in the form of Bid: 1.5900/Ask: 1.5902. Where Bid (bid) is the price at which the broker buys a pair from you, and Ask (ask) is the price the broker sells Euro for US dollars. The difference between the buying and selling price is the spread. A low spread is favorable for a trader, as it increases his profit due to more favorable buying and selling rates. In this case, the spread is equal to 2 points, where a point is the minimum price change in the quote.

Most brokers provide their clients with the ability to place limit orders. A limit order is an order to buy or sell at a predetermined price. There are several types of orders: Limit order to buy or sell, as well as stop orders. Limit orders allow you to open a position when the market reaches a certain price, which can be either higher or lower than the market price. Very often, limit orders are used to make a deal on more favorable terms (buy at a lower price, or sell at a higher one), when there is no way or desire to constantly monitor quotes. For example, if the market buy price is 1.5902, a pending order can be placed at a lower price of 1.5880. Stop orders are used to close an existing position, allowing you to take profit (take-profit) or limit losses (stop-loss). It is possible to use both of these orders at the same time. In our example, immediately when opening on EUR/USD, take-profit can be specified at 1.6000, and stop-loss at 1.5850.

Now let's touch on the question of what volumes can be traded. Due to the fact that the daily change in the rates of the most liquid currency pairs often does not exceed one percent, the broker can provide its clients with leverage, i.e. demand partial payment of the transaction amount. Leverage is the ratio between the collateral and the loan provided against it (borrowed capital). Thus, the leverage of 1:100 (one to one hundred) allows the client to make transactions in the amount of 100 times the margin requirements. This is margin trading - trading operations using borrowed funds secured by a certain amount (margin). A feature of margin trading is the obligation to perform the opposite operation (to close the position) after some time. That is, the client will not be able to cash out the money given to him by the broker, but the difference between buying and selling is fixed on the account in full, taking into account the leverage provided.

Thus, with a $1,000 account, you can trade with lots up to $100,000. The standard volume of the currency with which purchase and sale transactions are made (1 lot) with a Forex broker is 100,000. However, some companies allow trading in smaller parts - 0.1 lots. This is a mini lot.

The margin required to open a position is called the initial margin. These funds are blocked on the account to maintain an open position, and they can no longer be used to complete other transactions. If the rate went not in your direction, and losses began to appear, then the broker will not take your losses on himself, and when their value exceeds a certain barrier (at least 1% -5% of the initial margin level today), he will forcibly close the position . The forced closing of a loss-making position by a broker is called a margin call.

If the position is open for more than one day, then depending on the difference between the main interest rates for these currencies, a certain amount will be credited or written off - a swap (swap). Swap accrual occurs at midnight and may take several minutes, however trading activity during these hours is minimal. It is believed that all transactions with currency pairs take place on the spot market, where the actual delivery takes place on the 3rd day after the conclusion of the contract. The shift in the delivery date caused the need to pay a swap for transferring the value date by one more day, as well as the fact that on the night from Wednesday to Thursday, the swap value triples, and for the transfer from Friday to Monday, the fee is paid in a single amount.

In the case of the EUR/USD pair at current interest rates, a long position will add 0.2 points per day, or $2, while a short position will reduce your profit by 0.49 points, or $4.9, with each rollover.

Limitation

-What is limitation

It’s good when a cash flow budget is drawn up for an enterprise, it’s good when fact and planning are carried out according to the same rules, it’s very good when BDDS is planned and taken into account in the context of the Central Federal District - you can make a plan-fact analysis, you can punish those who spend extra money, One can praise those leaders of the CFD who accurately plan the financial needs of their CFD and fit into the plans. All this is correct and necessary, but ... not enough. One of the wonderful functions of budgeting - control - starts to work only when the execution of the budget is monitored interactively, when the management of the enterprise can work to prevent deviations. One of the mechanisms that help control the process of budget execution, and, accordingly, the entire business, is limitation.

Limitation in budgeting can be understood as two processes:

Limiting some budgets by others (for example, the investment budget in its expenses can be limited by the cash flow budget within one planning period, or the amount of monthly budgets should be limited by the annual budget), let's call it plan limiting;

Limiting the volume of actual business operations by the sums planned in the budget, let's call it the limitation of the fact.

So, within the framework of this article, we will consider the second option of limiting - limiting the fact. An obvious application of fact capping is the process of limiting cash requests to the approved cash flow budget. The introduction into practice of such a simple mechanism as limiting applications for spending money allows us to achieve several useful goals at the same time:

Strengthen the payment discipline of departments;

Reduce the likelihood of cash gaps;

Increase the transparency of the implementation of the plan (each head of the Central Federal District can see how many limits he still has left).

Now, in essence - how to organize the process of limiting? If you only have Excel at your disposal, then, obviously, you need to create a book for registering applications for spending money, which will indicate the unit, budget item and the amount of the application. The amount of applications in the context of departments and budget items should be considered a cumulative total from the beginning of the month, and on the application that exceeds the limit, you need to stop and send it back to the unit for revision of the amount, or completely cancel it. With the right organization of work and with a little technical refinement in the form of a few macros, you will get a fairly reliable limiting system. But spreadsheets have a number of disadvantages, the essence of which boils down to the fact that a spreadsheet is not a database. Here are some of these shortcomings:

Lack of multi-user mode of operation;

Weak degree of information security;

Risk of crashes due to broken links, human error, etc. (probably in this case this is the most important drawback, the cost of an error can be very large, sometimes even due to incorrect classification of an item, an enterprise can “get” into significant amounts of tax payments or diversion of working capital for a long time);

The need for multiple entries.

The following software products can be noted from the most widespread circulation software solutions today:

1C: Production Enterprise Management (abbreviated UPP);

Intalev: Corporate management (usually they say Intalev).

-Limitation in Instalev

Limiting as such in Intalev can be organized in two ways - by indicating that the limit execution scenario is controlled by the budget (with a certain possible deviation), or by creating a separate limit control scenario, which, although it will be based on budget data, will have the possibility of adjustment.

Limitation can be set for any analytics (classifiers) of indicators present in the system. An example is the control of payments by stages of a certain project. And since all operations in the budgeting system are entered in the context of the CFD, then, by setting limits on certain analytics, we automatically determine the limit of this analytics for a particular CFD.

In general, the limiting mechanism in Intalev works flawlessly, with budget operations, or with specially configured proformas, you can perform any conceivable operations with limits with limits (transfer from article to article, exchange of limits between departments, increase and decrease of limits, etc.).

To check the status of the limits, the "Control of limits" processing is used, the limits work in a prohibitive manner when placing requests for the expenditure of funds. The restrictions include methodological restrictions, which consist in the fact that the limitation is carried out separately for each CFD, i.e. if a particular CFD does not have a limit for a specific item, the system will not allow the limit to be exhausted.

-Limitation in 1C

In SCP, unlike Intalev, only one way of limiting works - by entering the values ​​of limiting values ​​according to the control scenario. In particular, this means that the fact of entering the budget into the system is not enough for the limitation mechanism to start working. It is necessary to introduce a special document - "Controlled values ​​for budgets". This document can work in three modes:

preliminary budget;

Control scenario – for all turnovers;

Control scenario - selectively;

The modes of control scenarios work on the same principle - they look at the amount of budget turnover, add the percentage of deviation from the budget and write it to the register of controlled values ​​for budgets. The selective mode differs in that it is necessary to manually specify the articles (and if necessary, the FRC) and the deviation percentages for which the system will set the limits, this is necessary in cases where different articles and / or the FRC has a different percentage of tolerances, as it happens in practice .

The preliminary budget mode allows you to directly set a limit on the items and FRC on the expenditure of funds, without reference to a specific budget.

There is a serious drawback in the SCP when organizing the work of limiting, which lies in the fact that when the delimitation of limits for the CFD is turned on (in intalev, this, we note, this is the only way it can be), the program, when making applications for the expenditure of funds on the link of the budget item-CFD in if at least one penny of the limit for this link is not found, it skips this order without any warning. At least this applies to release 1.2.19.1. Perhaps the author did not find some magic checkbox that corrects such an error and makes the program work correctly, but nevertheless, it is possible to make the soft starter work correctly in terms of limiting. For these purposes, the author has developed a simple technique and created a special external software module that allows you to set up high-quality work with limitation in SCP without making changes to the typical functionality and without involving programmers.

To do this, a special processing “Filling in the PM Reflecting the RFP in accounting” written in the built-in 1C language should be added to the directory of external processing for filling in tabular parts. The principle of working with the program is as follows - you create a document “Controlled values ​​by budgets”, in the field “Type of turnover limits” select “Preliminary budget” and by clicking the “Fill” button from the menu that opens, select the item “Fill in control values ​​by budgets”.

The external processing “Setting limits for articles” is called, in which you can simultaneously easily and flexibly set the limit values ​​for articles, setting limits either automatically or arbitrarily. The amounts of limits may differ from the amounts of budgets by percentages (you can choose your own percentage for each item-FRC link), or by absolute amounts. In the tabular part, a selection is set by default, which hides from the eyes of users all possible combinations of articles and divisions with a conditionally zero limit (equal to one penny). By clicking the “Execute” button, all limits, including conditionally zero ones, will be transferred to the tabular part of the document “Controlled values ​​by budgets”, after the document is posted, the system will control the processing of applications for the expenditure of funds for all departments (CFD) and all budget items.

To control the execution of limits, you can use the report "Report on controlled values".

Limitation and distribution of capital

Despite the possibility of reducing operational risks, many of them cannot be significantly reduced without restrictions on operations. As a result, there is a need to limit the volume of transactions - limiting - transactions carried out under operational risk.

The amount of the limit should be determined based on the organization's ability to cover losses caused by operational risk at its own expense - "risk capital" without jeopardizing the achievement of the organization's strategic goals. Those. the limit requires a certain assessment of operational risks - the magnitude of possible losses and the likelihood of their occurrence. In this case, the key is the assessment of the magnitude of losses - if it is impossible to assess the probability of losses, the assessment of the maximum possible losses in itself can be considered a requirement for "risk capital".

For most operations, a sufficient limit will be a volume limit that limits either the turnover within the framework of a particular activity or the volume of investments in certain assets / attraction of certain liabilities. It may also be appropriate to limit the values ​​of individual transactions carried out under operational risk - if the risks of transactions do not correlate, then limiting their volumes can significantly reduce possible losses.

Since the "risk capital" of the organization is intended to cover possible losses in all types of activities and all types of risks, operational risks with an integrated approach should affect not only operational risk limits, but also market and credit risk limits.

Sources

Wikipedia - the free encyclopedia

accountancy-edu.ru - basics of accounting

Study - educational portal №1

Yandex dictionaries

Accounting - law, taxes, consultations

Legal practice - newspaper of lawyers

Dictionaries and encyclopedias at Academician

Baysalov S.B. Nature and law. Alma-Ata 1996

Ecological essays. Moscow 1988

Financial risk management - theory and practice