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Gosbank (the State Bank of the USSR) was the Soviet Union's monobank. Characteristic of command economies, monobanks combine central and commercial banking functions into a single state-owned institution. Gosbank's primary tasks were to issue cash and credit according to government directives, and to operate the payments and clearing system. The Soviet government created Gosbank in October 1921 as the State Bank of the Russian Federation and changed its name to the State Bank of the USSR (Gosbank) in July 1923. The Soviet government permitted communal and cooperative banks to exist separately during the New Economic Policy period of the 1920s, but a series of banking reforms from 1930 to 1932 ended these last vestiges of commercial activity.

Several organizational changes ensued in the following years, and by the mid-1960s Gosbank's structure had crystallized. The USSR Council of Ministers directly controlled Gosbank. Gosbank's director sat on the Council of Ministers, and the Council nominated the members of Gosbank's board. Besides its main branches in each of the fifteen union republics and sub-branches in autonomous republics, territories, and regions, Gosbank controlled three subordinate banks: Stroibank USSR (the All-Union Bank for Investment Financing), Sberbank USSR (the Savings Bank), and Vneshtorgbank (the Foreign Trade Bank). In addition, Gosbank and Vneshtorgbank controlled foreign subsidiary banks in London, Paris, Frankfurt, Luxembourg, and Vienna. The oldest and most prominent were Moscow Narodny Bank, founded in London in 1919, and Eurobank, founded in Paris in 1925.

As a part of General Secretary Mikhail Gorbachev's perestroika (restructuring) program, the Soviet government dismantled the monobank in January 1988 and created a two-tiered banking system. Gosbank became a central bank, and retained only its major offices in the republics, large cities, and oblasts. The state foreign trade bank (now renamed Vneshekonombank) and Sberbank remained under Gosbank's direct control. The rest of Gosbank split off into three specialized banks. Agroprombank (the Agro-Industrial Bank) and Zhilsotsbank (the Housing and Social Development Bank) emerged from Gosbank proper, while Stroibank became Promstroibank (the Industrial-Construction Bank).

In 1990 the Russian government transformed a Moscow branch of Gosbank into the Central Bank of Russia (CBR) during the battle for sovereignty between the Soviet and Russian governments. The CBR and Gosbank operated in parallel until after the failed coup attempt against Gorbachev in August 1991, when the Soviet governing bodies lost their hold on power. On August 23, Russian president Boris Yeltsin ordered the USSR Council of Ministers to complete the transfer of Union-level organizations on Russian territory to the custody of the Russian state by the end of the year. On November 15, Yeltsin took over, by decree, the USSR Ministry of Finance and the USSR Chief Administration for the Production of State Bank Notes, Coins, and Medals. The Presidium of the Russian Supreme Soviet then unilaterally passed a resolution dissolving Gosbank and transferring its "facilities, documents, and specialists" to the CBR. On January 1, 1992, the CBR officially took over the rest of Gosbank's resources in Russia, and Gosbank ceased to exist.

See also: banking system, soviet; central bank of russia; sberbank; stroibank


Garvy, George. (1977). Money, Financial Flows, and Credit in the Soviet Union. New York: National Bureau of Economic Research.

Hellman, Joel. (1993). Breaking the Bank: The Political Economy of Banking Reform in the Soviet Union. Ph.D. dissertation, Department of Political Science, Columbia University, New York.

Kuschpèta, Olga. (1978). The Banking and Credit System of the USSR. Leiden, Netherlands: Nijhoff Social Sciences Division.

Zwass, Adam. (1979). Money, Banking, and Credit in the Soviet Union and Eastern Europe. White Plains, NY: M. E. Sharpe.

Juliet Johnson