Risk Management System in Liquidity Management of Funds Held in the Single Budget Account

The purpose of this study is to identify the institutional features of the current risk management system employed by the Federal Treasury in managing budget liquidity and to substantiate directions for its improvement, taking into account the need to maintain a balance between the security of budgetary funds and the efficiency of financial operations. The study examines the basic and advanced risk management models applied to operations conducted both on organized and over-the-counter markets, as well as the mechanism of risk hedging through repurchase agreements (repo transactions). The paper identifies the specific features of the current approach, which is based on the use of the infrastructure of the non-bank credit institution acting as a central counterparty, the National Clearing Centre, as well as on capital adequacy requirements and credit ratings of credit institutions. It is substantiated that the existing system demonstrates high effectiveness in terms of safeguarding budgetary funds; however, it is characterized by a limited capacity to respond promptly to changes in the financial market due to its dependence on external information sources and the prevailing practice of risk transfer. Based on the analysis conducted, the study formulates directions for modernizing the system, including monitoring decisions of the Bank of Russia regarding financial market participants, consolidating information on the compliance of credit institutions with established requirements, and implementing a risk-oriented adjustment of operational parameters when placing temporarily available budget balances within the framework of existing regulatory and legal provisions. The findings may be useful primarily for the Federal Treasury and other public authorities engaged in budget liquidity management, as well as for researchers in the fields of public finance, risk management, and budget liquidity management.

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