Course of lectures finance money circulation and credit. Abstract of lectures on the course "finance and credit". "Omsk State Agrarian University named after P.A. Stolypin"
SUMMARY OF LECTURES ON THE COURSE "FINANCE AND CREDIT". FROLOVA T.A.
Topic 1. Money circulation and monetary system. 3
1. Historical development of money. 3
2. Functions of money. four
3. The concept of money circulation. 5
4. Elements of the monetary system .. 5
5. Liquidity. 6
6. Laws of monetary circulation. 6
Topic 2. Finance and financial system. eight
1. History of finance and financial relations. eight
Objects of the financial market. ten
2. Functions of finance. ten
FINANCIAL SYSTEM OF THE RUSSIAN FEDERATION.. 12
4. Financial policy. 13
Topic 3. The state budget as the main link in the financial system.. 15
1. Economic essence and content of the budget. fifteen
2. General principles of building the state budget. 17
3. Budget device. eighteen
4. Budget process. 19
5. Interbudgetary relations. 21
6. State budget expenditures. 22
7. State budget revenues. 24
8. Budget deficit. 25
9. Public debt management.. 26
Topic 4. Regional and local budgets.. 28
1. Budgetary federalism.. 28
2. Expenses of regional and local budgets. 31
3. Revenues of regional and local budgets. 32
4. Other funds.. 33
Topic 5. FINANCE OF ENTERPRISES .. 35
1. Principles of corporate finance. 35
2. Cash funds of enterprises. 36
3. Cash flow management. 37
Topic 6. CREDIT AND CREDIT SYSTEM.. 38
1. The essence of the loan and its functions. 38
2. Forms of credit. 40
3. Credit system. 40
4. Monetary policy. 42
Topic 7. TAXES AND TAX SYSTEM.. 43
1. Types of taxes. 43
2. Laffer curve. 45
Topic 8. INSURANCE.. 45
Topic 1. Money circulation and monetary system
1. Historical development of money
Money is an independent form of the exchange value of all other commodities and has a commodity origin.
There are the following forms of value:
- simple or random (1 product is exchanged for another product);
- full or expanded (1 product is exchanged for another from a variety of products);
- universal form of value (many goods are equivalent to one - an intermediary);
- monetary form (money as a single equivalent).
The historical development of money is associated with the improvement of labor tools, the emergence of an increasing variety of relationships between people and, accordingly, the need to exchange the results of labor.
In subsistence farming, the result of production was consumed by the producer himself. In commodity production based on the social division of labor, the producer and the consumer are different persons. The product is produced for the purpose of sale and passes to the consumer through the purchase and sale. Thus, a commodity differs from a product in that its path from production to consumption runs through the market.
The most ancient ancestor of the market was the exchange of surplus products (product exchange). It was replaced by direct barter, when goods are directly exchanged for goods. But with the development of production, direct commodity exchange became more and more difficult and expensive. A commodity appears that has a certain value and can be exchanged for other goods (skins, stones, mammoth tusks, etc.). But the exchange is associated with certain difficulties.
Over time, people had one product that could be used for trade (exchange) with relative ease. This commodity was gold (or silver). Its advantages are obvious: (1) inventory is limited, so the cost is high; (2) it is divisible, so it is easy to create money of different scales; (3) everyone needs it. The physical properties of precious metals (homogeneity, strength, inherent value) meet the requirements for a monetary product.
Later, people figured out how to protect gold coins from damage (they wore out and lost their value). Those who held someone else's gold reserves (later they would be called banks) began to issue receipts, and these receipts began to be accepted as proof of payment (instead of the gold itself). It is extremely important that the seller began to accept a receipt as payment, although he did not actually see the gold - it was enough for him to know that such and such a merchant had it. Monetary circulation received the main feature and feature that has been preserved to this day - fiduciary, i.e. confidence. Of course, this leaves unscrupulous persons with a large field for deception, but it greatly simplifies and speeds up the turnover.
Metal money made it possible to move on to the minting of coins. In the 17th century, for the first time in China, paper money appeared, which was freely exchanged for gold.
Even later, the right to issue single receipts throughout the territory of any state was assigned to one person, who received the name of the central (issuing) bank. The receipts were called bills of exchange for a banker, i.e. banknotes. When the right of banknote holders to exchange banknotes for gold, which is mandatory for the Central Bank, was canceled, the monetary system finally turned into a fiduciary one (and, as a result, part of the money ceased to be secured by assets, i.e. gold, by the Central Bank).
In the 70s. In the 20th century, money broke the link with gold.
Then the business entities came to the conclusion that it is not at all necessary to transfer all receipts to each other in the process of interaction, in other words, to pay in cash. You can pay off your debt by granting the counterparty the right to receive the funds belonging to the debtor. Moreover, the funds themselves are nothing more than the debt of the bank. The era of electronic money has come, i.e., to put it simply, settlements by changing records in a computer. Of course, cash circulation has not completely lost its significance and scale of use, but the vast majority of money is no longer in cash - in developed countries, more than four-fifths of money is bank money.
Types of money. Emission - the right to issue money into circulation. This right belongs to the state represented by the Central Bank.
Cash is coins, banknotes (bank notes) and treasury notes. Coins are minted, as a rule, by the treasury.
Non-cash money - entries on accounts with the Central Bank and in its branches, but above all, these are deposits in commercial banks. These deposits are also called bank money.
Paper money is a sign, it serves the circulation of money and performs the role of a purchasing and means of payment.
Treasury notes are paper money issued by the Treasury.
Credit money (issuance) - a bill, banknotes and deposit money.
2. Functions of money
The functions of money are the main tasks performed by money. There are many such tasks, three main ones can be distinguished:
- Means of circulation (payment) of goods and services. Each seller (be it a seller of goods, a producer of raw materials, a worker - a seller of labor) receives money and has the right to buy with it whatever he pleases. In other words, by acting as a medium of exchange, money gets rid of the old, inconvenient and less reliable procedure of barter.
- A means of measuring the value of goods (a measure of value). When interacting, people could evaluate the results of their activities (which they exchange) in some other evaluation. Money serves as a universal measure of value, the scale on which the vast majority of calculations are based.
- Store of value (saving money for future marketable assets). Money is indispensable for saving: it is very convenient to store it. Of course, you can store axes, but it will take some time before their manufacturer is able to sell his goods and receive money in return. In addition, storing axes can be more expensive than storing money. Thus, the relative cheapness, ease of storage and liquidity make money a means of accumulating wealth.
The implementation of paper money of its 1st function presupposes, firstly, the acceptability of the system of banknotes as a means of payment. It's about ease of use. Secondly, the dangerous enemy of money in the function of means of circulation is the scarcity of commodities. Then barter is used.
Thirdly, inflation interferes with the implementation of the 1st function of money, the exchange is carried out without money.
The fulfillment of the 2nd and 3rd functions of money is also hindered by inflation.
3. The concept of money circulation
Money circulation is the circulation of cash flows in cash and non-cash form. Such circulation is possible due to the fact that someone has an excess of money (supply), and someone feels the need (demands). Money circulation serves the flow of goods, works and services, and it is through it that the functioning of the financial system is carried out (accumulation and redistribution of resources). Money circulation is the blood vessels for the financial system.
Money circulation has two main forms: cash and non-cash.
Cash circulation |
Non-cash circulation |
This is a cash flow, i.e. banknotes from one owner to another. Cash circulation is the most time-consuming and least protected process of redistribution of goods. In cash circulation there are restrictions (in terms of convenience and practicality) for business entities. It is less controlled by the state, therefore, in certain cases, it is more desirable for PP. Realizing this, the state establishes certain restrictions on cash turnover, which mainly concerns the maximum amounts of cash settlements and the timing of cash storage at the cash desk of the enterprise. |
This is the movement of electronic money, i.e. account entries. Developed non-cash circulation is possible only with a developed banking system, when the speed, the guarantee of payments, the quality of related services - provides greater convenience compared to cash circulation, which is the rejection of cash circulation. The main instruments of non-cash circulation are securities (bills, checks) and also credit cards. Especially important is such an indicator as the speed of turnover of funds. The quantity of money can be regulated not by issuing new money, but by accelerating the circulation of existing ones. |
4. Elements of the monetary system
At present, a state-organized monetary system has developed in all countries. The elements of the monetary system are those of its constituent parts on which the organization of the circulation of monetary resources is based:
Currency unit |
Price Scale |
Types of money |
Emission system |
A legal currency. In the Russian Federation - this is the ruble. |
Establishing the content of the price of the monetary unit through the weight content of gold (now it is not available). |
Banknotes and coins are unconditional obligations of the Central Bank and are backed by all its assets. They are required to be accepted for all types of payments. |
The issue of cash, the organization of their circulation and withdrawal from circulation on the territory of the Russian Federation are carried out exclusively by the Central Bank. |
5. Liquidity
The payment function of money gives rise to the main problem of money - the problem of liquidity.
Liquidity is the ability of any real asset to act as a means of payment.
Anything that acts as money is money. Any asset for which there is a demand in the market can act as a means of payment. The degree of liquidity means the comparative value of the costs of exchanging this asset and similar costs for exchanging another asset (transaction costs).
Assets are arranged according to the degree of liquidity (increasing in the balance sheet). Absolutely liquid asset is cash, exchange costs are equal to zero.
Liquidity characterizes 3 properties of any asset:
A real opportunity to use it as a means of payment;
The rate at which an asset is converted into a means of payment;
The ability of an asset to maintain its nominal value in time and space (anti-inflationary stability).
There are 4 motives in favor of cash:
- preference for liquidity (the term was introduced by Keynes), is understood as the demand for cash because of their absolute liquidity;
- transaction motive (people prefer cash because of the convenience of using it as a means of payment);
- precautionary motive (cash as a reserve in case of unexpected payments);
- speculative motive (the owner does not risk investing money in securities because of the risk).
6. Laws of money circulation
The circulation of money does not occur spontaneously - it obeys certain laws. Their knowledge allows you to quickly respond to or other changes, make appropriate decisions and influence economic development. These rules of circulation are called the laws of money circulation.
The basic law of money circulation, the formula of which was presented by K. Marx, links prices, velocity of circulation and the amount of money:
This formula is more true for gold circulation. When gold is circulated as money, due to the limited gold reserves, the ratio between the amount of gold (coins) and goods is established spontaneously, but relatively accurately: the excess money is withdrawn from circulation and goes into the sphere of accumulation (treasures), and if there is a shortage of coins, their withdrawn part is returned their treasures into circulation.
When credit money appears, an unsecured issue occurs. In this case, the appearance of inflation is inevitable, i.e. depreciation of money due to their increased quantity. It is necessary to keep track of that part of monetary obligations that can be mutually repaid without additional emission. The above equation takes the following form:
The quantity theory of money uses Fisher's equation: M*V = P*Q.
M - circulating money supply;
V - the speed of circulation of the monetary unit;
P is the average price level;
Q is the number of goods and services.
This law is called the law of paper money circulation. Since the amount of money can now increase indefinitely, the role of the state in monetary regulation is colossal. One of the types of regulation is to maintain the structure and volume of the money supply - the total purchasing power of funds.
If the question "how much money is needed?" there is no unequivocal answer, then the question "what money should be more and what less?" one can try to answer by analyzing monetary aggregates. They are the constituent elements of the money supply, they are based on a liquid approach.
Comments |
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cash in circulation (coins and banknotes) |
In developed countries, non-cash circulation is predominant (it is closely related to credit, and credit provides significant savings in distribution costs). The role of this unit is small. |
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M0 + account balances |
Funds in bank accounts are used to make current payments. Therefore, the volume of this aggregate largely characterizes the liquidity of the money supply. At the same time, the larger the company's working capital is "frozen" in the account, the less funds can be invested in fixed capital. This unit performs the function of a means of circulation to a greater extent. |
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M1 + term and savings deposits |
"Deposit money" has less liquidity, but can be converted into cash during some time (for example, into the M1 aggregate). The M2 unit to a greater extent performs the function of a means of accumulation, although it also partially serves as a means of circulation. |
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M2 + savings deposits, as well as securities |
This unit performs the function of a means of accumulation. At the same time, if bills of exchange are also understood as the securities that make up this aggregate, then this aggregate can perform the function of a medium of circulation. |
There is a dual demand for money. The value of money lies in its general purchasing power: we value money because it can pay for any purchase.
But there is another type of demand for money, when they are not spent immediately (canned, deferred demand). This stored amount of money is the money supply. The amount of money as a means of payment is the difference between the money income and money expenditures of the population.
A cash reserve is created when holding money turns out to be more profitable than spending it.
Topic 2. Finance and financial system
1. History of finance and financial relations
The term "finance" arose in the XIII - XV centuries. in the trading cities of Italy and at first denoted any cash payment. Further, the term received international distribution and began to be used as a concept associated with the system of monetary relations between the population and the state regarding the formation of state funds of funds.
This term reflected, firstly, monetary relations between two entities, i.e. money acted as the material basis for the existence and functioning of finance.
Secondly, the subjects had different rights in the process of these relations: one of them (the state) had special powers.
Thirdly, in the process of these relations, a nationwide fund of funds was formed - the budget, i.e. these relations were of stock nature.
Fourthly, the regular flow of funds to the budget could not be ensured without giving taxes, fees and other payments of a state-compulsory nature, which was achieved through the legal rule-making activities of the state, the creation of an appropriate fiscal apparatus.
Finance is a set of monetary relations organized by the state, in the course of which the formation and use of national funds of funds for the implementation of economic, social and political tasks is carried out.
Finance is understood as an economic category that reflects the level of economic relations between the seller and the buyer regarding cash and investment values.
Prerequisites for the emergence of finance:
- In Central Europe, as a result of the first bourgeois revolutions, the power of the monarchs was significantly curtailed, and the monarch was torn away from the treasury. A nationwide fund of funds arose - a budget that the head of state could not use alone.
- The formation and use of the budget has become systemic, i.e. there were systems of state revenues and expenditures with a certain composition, structure and legislative consolidation. Even then, 4 areas of spending were identified: for military purposes, management, economy and social needs.
- Taxes in cash have acquired a predominant character, while earlier state revenues were formed mainly at the expense of taxes in kind and labor duties.
The development of finance and financial relations is inextricably linked with the development and formation of states. After all, finances are relations for the accumulation and distribution and subsequent redistribution of national wealth, and redistribution is necessary precisely for the implementation of the functions of the state. With the broad development of market relations, financial relations are becoming more diverse. In particular, their only connection with the treasury and the whims of the monarch, king or shah is eliminated. Monetary relations are developing and improving, some in-kind duties and dues are being replaced by a more progressive form of taxation - monetary.
The functions of the state are being improved and developed: in addition to maintaining the court and court households, as well as the army and the police, the state becomes an active conductor of the economic interests of large merchants and manufacturers, financing colonial conquests and protectionist policies. The control function of finance appears and develops: one of the slogans of the American Revolution "No taxation without a representative" is well known, which is associated with the desire of the inhabitants of the United States - then filed by Great Britain - to participate in determining the directions and volumes of spending tax revenues to the budget. At the same time, the institution of interpolations was also developing - questions asked by a representative of the executive branch in parliament.
The further development of financial relations is connected with the democratization of society. In most states, parliamentary (representative) power is being strengthened, a policy of social stability is emerging, which implies the need to redistribute funds in favor of the poorest strata, establish social guarantees in the form of benefits and pensions ( Bismarck was the founder of pensions and social security in general), the introduction of special state programs for social protection and support (medicine, education, employment, etc.).
The 20th century brought with it especially rapid transformations in this area; during the first third, the totality of various financial relations develops into the financial system in the form in which it still exists. Thus, the improvement of finance is inextricably linked with the development of society: the more complex and higher the level of relations between people, the more perfect the structure of finance. They are therefore generally inseparable from man, since they represent distribution and redistribution. man-made wealth.
Financial market objects
2. Functions of finance
Finance is a relationship for the creation and redistribution of public goods and wealth. In this sense, they are closely related to money circulation and the sphere of credit. At the same time, money performs various functions, the main of which can be called the function of a universal equivalent, a commodity that serves as a measure of the value and cost of other goods, works and services. In contrast, finance is relations, i.e. are a tool for the accumulation and distribution of wealth, which is carried out, among other things, with the help of money.
Finance - Relations by:
Finance is also closely related to credit: the latter creates the basis for expanded reproduction and accelerated accumulation of wealth. Through credit relations, the distribution function of finance is partially realized and the movement of cash and commodity flows is directed. The healthy functioning of finance largely depends on the state of money circulation and credit: the more developed the monetary and credit systems, the more efficient the accumulation and redistribution of social wealth.
Functions of Finance |
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Distribution |
Control |
Regulatory |
In the process of production and trade, various incomes arise. However, in order to meet the development needs of society, it is necessary to redistribute part of these and other incomes. This is done by withdrawing a part of the indicated income, creating funds from these funds and spending funds for socially useful purposes: education, medicine, construction, defense, etc. |
Control over the correct accumulation and distribution of funds and resources. Therefore, finance also makes it possible to determine the most optimal ways of spending the accumulated funds, so that the needs of society are met as much as possible. |
Providing subsidies from the state budget. |
The control function of finance is closely connected with the distributive one. Among the huge variety of financial relations, there is not one that would not be associated with control over the formation and use of monetary funds.
With the help of finance, the state distributes the social product not only in natural-material form, but also in value. In this regard, it becomes possible and necessary to control the provision of cost and natural-material proportions in the process of expanded production.
Finance exercises control at all stages of the creation, distribution and use of the social product and ND. The ruble is controlled by production and non-production costs, the correspondence of these costs to income, the formation and use of fixed assets and working capital.
Control function object finance are the financial performance of enterprises and organizations.
Depending on the entities exercising financial control, there are:
National (non-departmental) financial control (carried out by state authorities and administrations);
On-farm financial control (carried out by the financial services of the enterprise);
Public financial control;
Independent financial control (carried out by auditors).
State financial control in the Russian Federation is carried out by the highest bodies of state power and administration - the Federal Assembly and its 2 chambers (the State Duma and the Council of Federations). The Federal Assembly forms the Accounts Chamber as a permanent body of state financial control. The Accounts Chamber exercises control over the timely execution of income and expenditure items of the federal budget, the legality and timeliness of the movement of budget funds in the Central Bank of the Russian Federation and other financial and credit institutions of the Russian Federation.
At the regional level, financial control is exercised by both regional authorities and specially created control bodies.
Control over the state of the republican budget and its execution is carried out by the Committee on Budget, Taxes, Banks and Finance of the State Duma of the Russian Federation.
The Ministry of Finance of the Russian Federation exercises control over the production and financial activities of enterprises, timely provision of the federal budget with financial resources, and their rational use.
The task of monitoring the receipt, targeted and economical use of public funds is entrusted to the bodies of the Federal Treasury of the Ministry of Finance of the Russian Federation. The main task of the Treasury is the organization, implementation and control over the execution of the republican budget and state off-budget funds. The Ministry of Taxation of the Russian Federation also exercises effective control. Its main task is to control compliance with the legislation on taxes, the correctness of their calculation, the completeness and timeliness of their introduction into the budgets.
According to the timing of the financial control is divided into:
a) preliminary (performed at the stage of drawing up, reviewing and approving financial plans, draft budgets. Designed to prevent the waste of material, labor and financial resources);
b) current (carried out in the process of fulfilling financial plans, its task is to timely control the correctness and expediency of expenses incurred, income received);
c) subsequent (organized in the form of checks and audits of the correctness, legality and expediency of the financial transactions performed. Its main tasks are to identify shortcomings and omissions in the use of resources; compensation for damage; bringing the guilty persons to administrative and financial responsibility; taking measures to prevent further cases of violation of financial discipline).
3. Financial system
The financial system is a combination of various links of financial relations, each of which is characterized by features in the formation and use of funds of funds, a different role in social reproduction.
FINANCIAL SYSTEM OF THE RUSSIAN FEDERATION
General government finance |
Business entity finance |
State budget - state
Off-budget funds - municipal
State loan - joint-stock
Insurance Funds - Private
Stock market - public
The financial system includes the following links of financial relations:
the state budget; off-budget funds; state credit; insurance funds; stock market; enterprise finance.
All listed financial relations can be divided into 2 subsystems:
q national finances (provide the needs of expanded reproduction at the macro level);
q finances of business entities (used to provide the reproduction process with cash at the micro level).
At the level of public finances, the development and implementation of a unified financial policy of the country takes place, on which the efficiency of enterprises largely depends.
National funds of monetary resources are created by distributing and redistributing the ND created in the branches of material production. The important role played by the state in the field of economic and social development leads to the need to centralize a significant part of the financial resources at its disposal.
Decentralized cash funds are formed from the cash income and savings of the enterprises themselves.
Public finance plays a leading role:
In ensuring certain rates of development of all branches of the national economy;
Redistribution of financial resources m / y by sectors of the economy and regions of the country, as well as forms of ownership and individual segments of the population.
The basis of the unified financial system is the finances of the PP. General public finances are organically linked to the finances of the PP. On the one hand, the main source of state budget revenues is the ND created in the sphere of material production. On the other hand, enterprises attract budget allocations and bank loans.
The object of financial management are financial relations. The subjects of management are public authorities and business entities.
At the macro level, financial management bodies are:
Federal Assembly;
The president;
Government;
Ministry of Finance;
State Customs Committee;
Ministry of Taxes and Duties;
Federal Commission for the Securities Market;
Executive bodies of off-budget funds.
4. Financial policy
Financial management is carried out within the framework of financial policy.
Elements of financial policy:
- long-term policy;
- current policy;
- deflationary policy;
- budget policy;
- tax policy;
- monetary policy (discount, foreign exchange subsidies, diversification of foreign exchange reserves);
- credit policy;
- accounting (discount) policy;
- financial management policy.
The role of finance in the functioning of economic systems is as follows:
Financial support for the needs of expanded reproduction;
Financial regulation of economic and social processes (borrowed funds);
Financial incentives for the effective use of all types of economic resources (raised or abstracted funds).
There are 3 types of economic regulation:
self-regulation;
State regulation;
Regulation through the finances of enterprises.
Financial incentives for the efficient use of all economic resources are carried out by the following methods:
- through the effective investment of financial resources;
- through the creation of incentive funds;
- through the use of fiscal incentives;
- through the use of financial sanctions.
The direct impact of finance on the development of the economy is carried out through the financial mechanism.
The financial mechanism consists of five interrelated elements that contribute to the organization, planning and stimulation of the use of financial resources:
q financial methods (investment, taxation);
q financial leverage (price, profit, %, discount);
q legal support;
q regulatory support;
q information support.
Financial methods are ways of influencing financial relations on the economic process, which operate in two directions: along the line of managing the movement of financial resources and along the line of market relations related to the comparison of costs and results, material incentives and responsibility for the efficient use of funds.
The impact on market relations is due to the fact that the functions of finance in the sphere of production and circulation are closely related to commercial calculation - this is a comparison in monetary form of costs and results of financial and economic activities.
The purpose of applying commercial calculation in its most general form is to obtain maximum profit at minimum cost, although goals may change in different periods of the enterprise's activity. The action of financial methods is manifested in the formation and use of monetary funds.
Financial leverage is a technique of financial methods.
Legal support for the functioning of the financial mechanism includes legislative acts, resolutions, orders and other legal documents.
Normative support for the functioning of the financial mechanism is instructions, regulations, norms, tariff rates, guidelines, explanations, etc.
Information support for the functioning of the financial mechanism is associated with obtaining various economic, commercial, financial and other information. Financial information includes information about the financial stability and solvency of partners and competitors, prices, rates, dividends, interest on the commodity, stock, foreign exchange markets, information about the state of affairs on the exchange and over-the-counter markets, information about the financial and commercial activities of business entities, etc. Possession of information helps to assess the situation in the markets.
Topic 3. The state budget as the main link in the financial system
1. Economic essence and content of the budget
In the formation and development of the economic and social structure of society, state regulation plays an important role, carried out within the framework of the policy adopted at each historical stage. One of the mechanisms that allow the state to pursue economic and social policy is the financial system and the state budget included in it.
The budget is a form of formation and expenditure of a fund of funds intended for financial support of the tasks and functions of the state and local self-government.
The state budget is a centralized fund of monetary resources necessary to perform the functions of the state. These functions are reduced to the redistribution of funds and control over their effective use. In this sense, the functions of the budget are similar to the functions of finance, which is understandable, since the budget is only part of the whole. At the same time, in relation to the state budget, it is customary to single out the following functions related to the state structure:
(1) intervention in the economy;
(2) maintenance of the state administrative apparatus;
(3) law enforcement and judiciary;
(4) medicine, health care and education;
(5) the defense of the country.
The state budget, being the main financial plan of the state, gives the authorities a real economic opportunity to exercise power. The budget reflects the amount of financial resources needed by the state and thus determines the tax policy in the country. The budget fixes specific areas of spending funds, the redistribution of ND and GDP, which allows it to act as an effective regulator of the economy.
At the same time, the budget can be viewed as an economic category that expresses certain economic relations. The emergence and development of the budget is associated with the birth and formation of the state. The state uses the budget as one of the main instruments for ensuring its activities and pursuing economic and social policies.
The state budget performs the following functions:
Redistributive (redistribution of GDP);
Regulatory (state regulation and stimulation of the economy);
Stimulating (financial support of the budgetary sphere and implementation of the social policy of the state);
Controlling (control over the formation and use of centralized funds of funds).
The distributive function of the budget is manifested through the formation and use of centralized funds of funds at the levels of state and territorial authorities and administration. In developed countries, up to 50% of GDP is redistributed through the budgets of different levels. With the help of the budget, the state regulates the economic life of the country, economic relations, directing budgetary funds to support and develop industries and regions. Regulating economic relations in this way, the state is able to purposefully increase or restrain the pace of production, accelerate or weaken the growth of capital and private savings, and change the structure of demand and consumption.
The redistribution of GDP through the budget has 2 interrelated stages:
q formation of budget revenues;
q use of budgetary funds (budget expenditures).
The control function of the budget operates simultaneously with the distribution function and implies the possibility and obligation of state control over the receipt and use of budget funds.
The state budget is the main link in the financial system. It is a form of formation and use of a centralized fund of funds to ensure the functions of public authorities.
According to the level of management, the state budget is divided into the federal budget and the budget of the subjects of the Federation.
The state budget is the main financial plan of the country, approved by the Federal Assembly of the Russian Federation as a law. Through the state budget, the state concentrates a significant share of ND to finance the national economy, social and cultural events, strengthen the country's defense and maintain state bodies. power and control.
With the help of the budget, the NI is redistributed, which creates an opportunity to maneuver with money and purposefully influence the pace and level of development of social production. This makes it possible to implement a unified economic and financial policy throughout the country.
Budget funds should be directed to the implementation of investment policy, subsidizing enterprises, financing the conversion of defense industries. Budget expenditures are designed to contribute to the formation of a rational structure of social production, to build up scientific and technical potential, and to upgrade the material and technical base.
The role of the state budget is not limited to financing the sphere of material production. Budgetary resources are also directed to the non-productive sphere. Enterprises and institutions of social and cultural direction are financed at the expense of budgetary and non-budgetary funds. These costs are of great importance. They allow the state to develop the system of public education, finance culture, meet the needs of citizens in medical care, and implement social protection.
Budget expenditures for social and cultural events are not only of social but also of economic importance, since represent the most important part of the costs of reproduction of the labor force and serve to raise the material and cultural standards of life.
2. General principles for the construction of the state budget
Principles:
- Unity of the budget system (unity of budget legislation, monetary system, budget classification and policy, forms of budget documents and reporting).
- Separation of revenues and expenditures m / y levels of the budget system.
- Independence of budgets of all levels (each has its own sources of funds, its own expenses).
- Balanced budget (no deficit. Surplus - excess of income over expenditure. If a surplus is found, it is reduced by: reducing income from the sale of state or municipal property, income from the sale of state reserves and resources; directing budget funds to pay off debt obligations; transferring part of the income budgets of other levels).
- Efficient and economical use of budgetary funds.
- Reliability of the budget (reliability of indicators and their adequacy to the economic situation).
- Completeness of reflection of budget revenues and expenditures.
- Publicity.
- Address and targeted nature of the use of budgetary funds.
The unity of the budget system is ensured by a unified legal framework, the use of unified budget classifications, the unity of the form of budget documentation, the provision of the necessary statistical and budget information from one level of the budget to another for the preparation of consolidated budgets, agreed principles of the budget process, the unity of the monetary system. In addition, the principle of the unity of the budget system is based on the interaction of budgets of all levels, carried out through the use of regulatory revenue sources, the creation of target and regional budget funds, and their partial redistribution. The mechanism for implementing the principle of the unity of the budget system is a single socio-economic policy (including tax).
The independence of budgets is ensured by the presence of their own sources of income and the right to determine the directions of their use and spending. The own sources of budget revenues include: statutory revenue sources for each level of the budget; deductions from regulatory revenue sources; additional sources established independently by the representative authorities of the subjects and local authorities.
Decisions of representative bodies of power on budgetary issues are subject to publication in the media within the time limits established by the relevant representative body of power, or are brought to the attention of the population in another way based on the capabilities of the relevant representative body of power. If a decision is made to reject the draft budget or not to approve reports on budget execution and the use of funds from extra-budgetary and foreign exchange funds, the necessary information about the reasons for making such a decision must be published in the mass media.
3. Budget device
Budgetary relations are the financial relations of the state at the federal, regional and local levels with state, joint-stock and other enterprises, as well as the population regarding the formation and use of a centralized fund of monetary resources.
The budget is a form of education and expenditure of funds to ensure the functions of public authorities.
The totality of all types of budgets forms the budgetary system of the state. The relationship of m / y with its individual links, the organization and principles of building a budget system is called a budget device.
The foundations of the budgetary structure are determined by the form of the state structure of the country, the legislative acts in force in it, the role of the budget in social reproduction and social processes. The construction of the budget system also depends on the form of the state and administrative structure.
According to the degree of separation of power between the center and administrative-territorial entities, all states are divided into:
unitary;
Federated;
Confederate.
Unitary (single) state- this is a form of government in which administrative-territorial entities do not have their own statehood or autonomy. The country has a single constitution, laws common to all systems and single authorities, centralized management of economic, social and political processes in the state. The budgetary system of a unitary state consists of 2 links - the state and local budgets.
Federal (united) state- this is a form of government in which state formations or administrative-territorial formations that are part of the state have their own statehood and have a certain political independence within the limits of the distributed m / they and the center of competence. The budgetary system of federal states is three-tiered and consists of the federal budget, the budgets of the members of the federation and local budgets.
Confederate (union) state is a permanent union of sovereign states, created to achieve political or military goals. The budget of such a state is formed from the contributions of the states included in the confederation. The member states of the confederation have their own budget and tax systems.
The budget system of Russia consists of 3 links:
n the federal budget of the Russian Federation;
n budgets of national-state and administrative-territorial entities, called the budgets of the subjects of the Federation, or regional budgets. These include: the republican budgets of the republics within the Russian Federation, the budgets of regional, regional, autonomous entities, as well as the city budgets of Moscow and St. Petersburg;
n local budgets (city, district, settlement, rural).
The budget system is called upon to play an important role in the implementation of the state's financial policy, the goals of which are determined by its economic policy.
Today, the budget system of Russia consists of the federal budget, 21 republican budgets, 56 regional and regional budgets, including 1 autonomous region, the city budgets of Moscow and St. Petersburg, 10 district budgets of autonomous districts and about 29 thousand local budgets.
The federal budget serves as the main financial plan of the state, approved by the Federal Assembly (adopted by the State Duma and approved by the Federation Council) and having the status of a federal law. The federal budget mobilizes the financial resources necessary for their subsequent redistribution and use for the purposes of state regulation of the country's economic development and the implementation of social policy. In addition, the federal budget covers such costs as the maintenance of government bodies, meeting the needs of the country's defense, financial assistance to the subjects of the Federation, servicing the public debt, and replenishing state reserves.
4. Budget process
The budget process is the legally regulated activity of the authorities in the preparation, consideration, approval and execution of budgets.
The participants in the budget process are:
- President of the Russian Federation;
- bodies of legislative (representative) power;
- executive authorities (highest officials of the constituent entities of the Russian Federation, heads of local self-government, financial authorities, bodies collecting budget revenues, other authorized bodies);
- monetary authorities;
- bodies of state and municipal financial control;
- state off-budget funds;
- main managers and managers of budgetary funds;
- recipients of budget funds, as well as credit institutions that carry out individual operations with budget funds.
The drafting of the federal budget is carried out by the Government of the Russian Federation and begins no later than 10 months before the start of the next financial year.
Budgeting is based on:
- Budget message of the President;
- forecast of socio-economic development of the territory (krai, region) for the next financial year;
- the main directions of the budgetary and tax policy of the territory for the next financial year;
- forecast of the consolidated financial balance for the territory for the next financial year;
- plan for the development of the state or municipal sector of the economy of the territory for the next financial year.
The decision to start work on drafting the budget is made by the President of the Russian Federation 18 months before the start of the corresponding financial year. The Government prepares a draft budget message and submits it to the President. The President presents the budget message to the Federal Assembly and sends it for publication in the press.
The budget message of the President is sent to the Federal Assembly no later than March of the year preceding next financial year. The Budget Message of the President defines:
(1) the main indicators of the socio-economic development of the Russian Federation for the relevant period;
(2) consolidated financial balance for the territory of the Russian Federation;
(3) the main directions of the RF budget policy;
(4) information on state revenues in the territory of the Russian Federation;
(5) draft budget of the Russian Federation;
(6) draft consolidated budget of the Russian Federation;
(7) evaluation of the execution of the budgets of the previous and current financial years.
The Ministry of Finance organizes work on drafting the federal budget, the forecast of the consolidated budget of the state; presents the draft budget to the Government of the country. After the Government approves the draft federal budget, it is considered and adopted by the State Duma and the Federation Council.
The set of budgets in general for the Russian Federation or the corresponding territory is called the consolidated budget.
Such a consolidated budget is not approved by the legislature and is used for analysis and statistical purposes. The consolidated budget is not approved by anyone.
Within a day from the day the draft federal law on the federal budget for the next financial year is submitted to the Duma, the Duma Council sends it to the Budget Committee to prepare an opinion on the compliance of the submitted documents and materials with certain requirements. The Duma considers the draft law on the federal budget in 4 readings.
When considering the draft budget, Parliament decides on the following main characteristics:
- the upper limit of the volume of appropriations of the current expenditure budget and the development budget (expenditure part);
- the limits of budget imbalance (surplus or deficit in the form of an absolute value or a percentage of projected revenues).
After the main characteristics of the draft budget are approved, budget allocations are approved by item in accordance with the functional budget classification. As part of the approved budget items of this classification, any type of appropriations in the amount equal to or exceeding 1 billion rubles must be indicated in a separate line.
Ensuring the execution of the federal budget, the Ministry of Finance controls the receipt and intended use of funds. After the year for which the budget was drawn up, it draws up a report on the execution of the federal and consolidated budgets and submits them to the Government of the Russian Federation. The government annually in May of the year following the reporting year submits to the parliament a report and a report on the execution of the republican budget for the past financial year.
An integral part of the budget process is budget regulation - partial redistribution of financial resources between budgets of different levels.
The preparation and execution of the budget is based on the budget classification, which highlights the target areas of state activity arising from the main functions of the state.
Budget classification is a grouping of incomes and expenditures of budgets of all levels, as well as sources of covering the deficit of these budgets with the assignment of classification of coding groups to them.
This classification is the same for the budgets of all levels and is approved by the Federal Law. It is used for:
Approval, preparation and use of budgets;
Control over the spending of budgetary funds;
Ensuring comparability of indicators of all levels;
Preparation of consolidated budgets in various territories.
The budget classification is a provision of targeted allocation of financial resources, with its help the problem is solved, to whom, how much and for what purposes financial resources are allocated from the federal budget. It should enable economic analysis of government spending.
The budget classification includes:
Classification of budget revenues of the Russian Federation;
Functional classification of RF budget expenditures;
Economic classification of RF budget expenditures;
Classification of sources of internal financing of budget deficits of the Russian Federation;
Classification of sources of external financing of the federal budget deficit;
Classification of types of state internal debts of the Russian Federation, subjects of the Russian Federation, municipalities;
Classification of types of the state external debt of the Russian Federation and state external assets of the Russian Federation;
Departmental classification of federal budget expenditures.
Budget list - a document on the quarterly distribution of budget revenues and expenditures and receipts from sources of financing the budget deficit, establishing the distribution of budgetary appropriations among recipients of budgetary funds.
Budget appropriations - budgetary funds provided by the budget list to the recipient or manager of budgetary funds.
5. Intergovernmental relations
Interbudgetary relations are relations regarding the formation of budgets m / y by state authorities of the Russian Federation, constituent entities of the Russian Federation and local self-government.
Intergovernmental relations are based on fiscal federalism. It is based on the following principles:
- balance of interests of all participants in interbudgetary relations;
- independence of budgets of all levels;
- legislative delimitation of expenditure powers and revenue sources m / y budgets of all levels;
- objective redistribution of funds from the budgets to equalize the level of budgetary provision of regions and municipalities;
- unity of the budget system;
- equality of budgets of different levels.
Interbudgetary relations and the policy of budgetary federalism underlie budgetary regulation.
6. State budget expenditures
Budget expenditures are funds aimed at financially supporting the tasks and functions of state and local self-government.
Since the state needs, first of all, to ensure stability in society, the main areas of expenditure are: law enforcement agencies, the state apparatus, and social goals.
The following types of expenses are financed exclusively from the federal budget:
ensuring the activities of the President, the Federal Assembly, the Accounts Chamber, the Central Election Commission, federal executive bodies and their territorial bodies, other expenses for general state administration;
the functioning of the federal judiciary;
implementation of international activities in the general federal interests (cultural, scientific and informational cooperation, contributions to international organizations);
national defense and state security, the implementation of the conversion of defense industries;
fundamental research and promotion of scientific and technological progress;
support for rail, air and sea transport;
support for nuclear energy;
elimination of the consequences of emergency situations and natural disasters on a federal scale;
exploration and use of outer space;
formation of federal property;
service and repayment of the state debt of the Russian Federation;
replenishment of state stocks of precious metals and precious stones, state material reserve;
holding elections and referendums;
federal investment program;
financial support of subjects of the Russian Federation;
official statistics.
Depending on the impact on the process of expanded reproduction, budget expenditures are divided into:
- current (to meet current needs);
- capital (for investment needs) or development budget.
The current expenditure budget includes expenses for the current maintenance and overhaul (rehabilitation) of housing and communal services, environmental protection facilities, educational institutions, healthcare and social security institutions, science and culture, physical culture and sports, the media, public authorities and administration, local governments and other expenses not included in development expenses.
The development budget includes appropriations for innovation and investment activities related to capital investments in socio-economic development, for own environmental programs and environmental protection measures (in excess of appropriations allocated from environmental extra-budgetary funds), other expenses for expanded reproduction. It is this budget that determines the scale and speed of the re-equipment of production, R&D.
Funds from the development budget are used on a competitive, returnable, urgent and paid basis for the implementation of investment projects that ensure the structural restructuring of the economy.
State expenditures in the sphere of material production occupy the largest share in the expenditure part of both the federal budget and the budgets of the constituent entities of the federation and local budgets.
The composition of the costs of social and cultural activities include allocations for education and science, health care and physical culture, culture and art, the media, and the implementation of social policy.
The amount of budget allocations for defense depends on the international situation, the policy pursued and the economic capabilities of the state.
Management expenses include budget allocations for the maintenance of public authorities and administration, courts and prosecutors, and law enforcement agencies.
Among other expenditures of the federal budget, a special place is occupied by the costs of current servicing of the state internal and external debt.
The following target budget funds are allocated as part of federal budget revenues and expenditures:
Federal Road Fund of the Russian Federation;
Customs System Development Fund;
Fund for the reproduction of the mineral resource base;
Development Fund of the Federal Border Service;
Fund of the Ministry of the Russian Federation for Atomic Energy;
Federal Fund of the Ministry of Taxation and the Federal Tax Police Service of the Russian Federation;
Federal Ecological Fund;
State Fund for Combating Crime.
Target budget funds guarantee with greater reliability their intended use.
Through budget expenditures, budget recipients are financed - organizations in the production and non-production spheres. Thus, budget expenditures are of a transit nature.
7. State budget revenues
Budget revenues are funds received free of charge and irrevocably in accordance with the current classification and existing legislation.
In the process of formation of budget revenues, there is a forced withdrawal in favor of the state of a part of the GDP created in the process of social reproduction. On this basis, there are financial relationships between the state and taxpayers.
Budget revenues have significant differences in their payers, objects of taxation, methods of withdrawal, terms of payment, etc. But at the same time, they are distinguished by unity, because pursue one goal - the formation of the revenue side of the budgets of different levels. They are characterized by a monetary form and impersonality.
Budget revenues can be tax and non-tax character.
The revenue part of the budget is formed mainly from taxes. VAT occupies the leading place among the tax revenues of the federal budget. Together with customs duties and income tax, it exceeds 2/3 of tax revenues. Also, a significant share of revenues comes from excises and payments for the use of natural resources, a tax on the purchase of foreign banknotes.
Non-tax revenues of budgets are formed as a result of either the economic activity of the state itself, or the redistribution of already received revenues by the levels of the budget system.
Among the non-tax revenues of the federal budget, one can single out income from the sale of state-owned property, income from the sale of state reserves and from foreign economic activity, as well as income from federal property, incl. profit of the Central Bank of Russia. In addition, funds from target budget funds are taken into account in federal budget revenues.
Taxes received by the relevant budgets are called fixed income.
Additional funds may be transferred to the lower budget to cover its expenses from the higher budget in excess of the revenues assigned to it. They are called regulatory income.
Regulating revenues allow regional and local authorities to have the financial resources necessary to perform their functions, to balance the revenue and expenditure parts of the budgets.
There is a Federal Fund for Financial Support of the Subjects of the Federation. It is intended to provide financial assistance (transfers) to regions with a per capita budget income below the average per capita in all subjects of the Federation. Such regions receive the status of "in need of support".
Transferred funds from a higher budget used to finance a target event are called subventions.
Investments and other capital expenditures are made at the expense of the federal budget when their significance goes beyond regional interests.
The structure of budget revenues is flexible and largely determined by specific economic conditions. For example, in countries with a high standard of living, the basis of tax revenues is the income of individuals, and in countries with a low standard of living, indirect taxes and taxes on legal entities.
The aggregate scheme of income and received official transfers can be represented as follows:
- Current income:
1.1. Tax revenues
- income taxes, taxes on profits and capital gains;
- contributions to state social funds;
- taxes levied depending on the wage fund;
- property taxes;
- domestic taxes on goods and services;
- taxes on foreign trade and foreign economic operations;
- other taxes, fees and duties;
1.2. Non-tax revenues
Income from property and entrepreneurial activities;
Administrative fees and charges, sales revenues;
Income from fines and sanctions;
Other non-tax revenues.
- Income from capital transactions
- sale of fixed capital;
- income from the sale of state reserves;
- income from the sale of land and intangible assets;
- receipts of capital transfers from non-state sources;
- Official transfers received
From non-residents;
From other government bodies (subsidies, subventions).
8. Budget deficit
Balancing the budgets of all levels is a necessary condition for fiscal policy. The excess of spending over income is the budget deficit. Budget surplus - the excess of budget revenues over its expenditures;
If there is a budget deficit, the expenditures included in the current expenditure budget are subject to priority financing. The size of the federal budget deficit cannot exceed the total volume of budget investments and expenditures for servicing the state debt of the Russian Federation in the corresponding financial year.
The size of the budget deficit of a constituent entity of the Russian Federation cannot exceed 15% of the volume of budget revenues of the constituent entity, excluding financial assistance from the federal budget.
The size of the local budget deficit, approved by the normative act of the representative body of local self-government, cannot exceed 10% of the local budget revenues, excluding financial assistance from the federal budget and the budget of the constituent entity of the Russian Federation.
If in the process of budget execution there is an excess of the maximum level of deficit or a significant decrease in revenues from revenue sources of the budget, then a mechanism for sequestering expenditures is introduced, which consists in a proportional reduction in public expenditures (by 5, 10, 15, and so on) monthly for all budget items during the remainder of the current financial year. Protected articles are not subject to sequestration (their composition is determined by the Federal Assembly of the Russian Federation, as well as by the representative authorities of the constituent entities of the Russian Federation).
The sources of financing the budget deficit are approved by the legislative (representative) authorities in the law on the budget for the next financial year for the main types of funds raised.
Credits from the Bank of Russia, as well as the acquisition by the Bank of Russia of debt obligations of the Russian Federation, subjects of the Russian Federation, municipalities during their initial placement cannot be sources of financing the budget deficit.
The sources of financing the federal budget deficit are:
1) internal sources in the following forms:
loans received from credit institutions in the currency of the Russian Federation;
state loans carried out by issuing securities on behalf of the Russian Federation;
budget loans and budget credits received from the budgets of other levels of the budget system;
proceeds from the sale of state-owned property;
the amount of excess of revenues over expenditures on state stocks and reserves;
change in balances of funds on accounts for accounting for federal budget funds;
2) external sources in the following forms:
government loans in foreign currency by issuing securities on behalf of the Russian Federation;
loans from foreign governments, banks and firms, international financial organizations, provided in foreign currency.
State credit reflects credit relations regarding the mobilization by the state of temporarily free funds of enterprises, organizations and the population on a repayment basis to finance government spending.
Individuals and legal entities act as lenders, while the state represented by its bodies acts as a borrower.
The state attracts additional financial resources by selling bonds and other government securities on the financial market. This form of credit allows the state to attract additional financial resources to cover the budget deficit without issuing for these purposes.
State. credit is also used to stabilize the money circulation in the country.
Classification of public credit.
1. Depending on the borrower, government loans are divided into:
Hosted by central governments;
hosted by local governments.
2. At the location of the state. credit can be internal and external.
3. By terms of attraction:
- short-term (up to a year);
- medium-term (from one year to 5 years);
- long term.
The size of the state loan is included in the amount of the country's public debt.
9. Public debt management
Public debt is divided into principal and current, depending on the maturity.
Public debt is the entire amount of issued, but not repaid government loans with interest accrued on them on a certain date or for a certain period of time.
The public debt is divided:
- Internal and external.
- main and current.
State domestic debt RF means the debt obligation of the Government of the Russian Federation, expressed in the currency of the country, to legal entities and individuals. The forms of debt obligations are loans received by the Government of the Russian Federation, state loans carried out by issuing securities on its behalf, other debt obligations guaranteed by the Government of the Russian Federation.
State external debt is the debt in foreign currency on outstanding foreign loans and unpaid interest on them.
Principal debt is the entire amount of the debt of the state, for which the due date for payment has not come and which cannot be presented for payment during this period.
The current state debt is the debt of the state on obligations for which the payment period has come.
World experience shows that public debt should not exceed half of the country's GDP. Significant amounts of public debt reflect the crisis state of the Russian economy.
The federal debt does not include debt obligations of the national-state and administrative-territorial entities of the Russian Federation, i.e. municipal loans, if they are not guaranteed by the Government of the Russian Federation.
Servicing the public debt is expressed in the implementation of operations for the placement of debt obligations, their repayment and payment of interest on them. These functions are performed by the Central Bank of the Russian Federation.
Public debt management is understood as a set of financial measures of the state related to the establishment of annual limit values ​​for public debt, the issuance and repayment of loans, the organization of the payment of income on them, the conversion and consolidation of loans.
The payment of income on loans and their repayment is one of the main items of budget expenditures. The government is forced to resort to the prolongation of loans and other obligations (lengthening the repayment period) or conversion (reducing the amount of interest paid on loans).
The main methods of financing the public debt are monetary emission and the issuance of government loans.
There are different criteria for assessing external debt. For example, they compare the size of the debt and the need for its repayment and payment of% with the value of exports. The limit of danger is the excess of the amount of debt compared to export by 2 times, increased danger - by 3 times.
At present, the country is unable to fully service its external debt. Required:
q organization of practical work on the return of interstate debts; Russia continues to be the world's largest creditor;
q it is necessary to abandon international financial loans used to cover the current needs of the budget, and direct them to the implementation of targeted federal programs related to the revival of production.
Topic 4. Regional and local budgets
1. Fiscal federalism
The principle of budgetary federalism is a fundamental rule of budgetary law, and lies in the fact that the administrative-territorial units within the state have their own sources of income and directions for spending funds.
Chapter 1 of the Constitution of the Russian Federation contains the principles that determine the federal structure of the state. The specifics of Russian federalism are as follows.
1. Equal subjects of the Russian Federation - republics, territories, regions, cities of federal significance, autonomous regions, autonomous districts.
2. Constitutional principles of federalism:
- state integrity,
- unity of the system of state power,
- delimitation of subjects of jurisdiction and powers between state authorities of the Russian Federation and state authorities of the constituent entities of the Russian Federation.
Each municipality, in accordance with the law "On the financial foundations of local self-government of the Russian Federation", has its own budget and the right to receive funds from the federal budget and the budget of a constituent entity of the Russian Federation in the process of budgetary regulation. Thus, local budgets are endowed with a guaranteed share of federal taxes.
The revenue part of the local budget is formed from tax revenues, part of the profits of municipal enterprises, subsidies and subsidies from higher budgets and municipal loans.
The revenues of the local budget are local taxes, fees for trade, for the issuance of licenses, rent for land and buildings, fines, court fees, utility bills.
The own sources of budget revenues include:
- statutory revenue sources for each level of the budget;
- deductions from regulatory revenue sources;
- additional sources.
The formation of the budgets of the subjects of the Federation is based on the principle of interbudgetary relations.
The means of budgetary regulation of local budgets include:
q regulatory deductions from regulatory revenues;
q grants and subventions (a subsidy is a general-purpose grant, and a special-purpose subvention);
q funds allocated from the fund for financial support of municipalities;
q funds received by mutual settlements from the federal budget and the budgets of the constituent entities of the Russian Federation.
The fund for financial support of municipalities is created in the budgets of the constituent entities of the Russian Federation and is distributed according to a formula that takes into account the population of the municipality, the share of preschool and school-age children in the total population, per capita provision with funds from the municipality, etc.
Regulatory deductions from regulatory revenues include shares of federal taxes and shares of taxes of the constituent entities of the Russian Federation, assigned to local budgets on a permanent basis. They, along with local taxes and fees, belong to the own revenues of local budgets.
In case of insufficient budgetary funds to cover expenses exceeding the minimum budget, or in cases of temporary financial difficulties in the process of executing the approved budget, it is possible to receive interest-bearing or interest-free loans, as well as issue loans for investment purposes. The maximum ratio of the total amount of loans, credits, other debt obligations of the budget and the volume of its expenditures is established by the laws of the Russian Federation.
The independence of budgets means, in addition to having their own sources, also the right to determine the direction of their use and spending. Thus, the independence of budgets is the main and most important element of budgetary federalism. Another element is the precise procedure for the relationship of budgets.
Costs: regional law enforcement, notaries, advocacy, regional support programs, support for small businesses, loans to farmers, investment tax credits.
The relationship between budgets of different levels (budget regulation) can be analyzed by considering the transfer of funds from one budget to another. As a rule, the higher budget allocates earmarked funds for the lower budget. The basis of budgetary regulation is the distribution of income sources between budgets of different levels, fixed by law. As part of the budgets, targeted and reserve budget funds can be created, the funds of which can be transferred free of charge in the form of subventions, subsidies and subsidies to the budgets of lower levels for the purpose of implementing social, environmental and other programs, eliminating the consequences of natural disasters, carrying out other activities, covering the deficit.
At the legislative level, relations between budgets can be regulated in two ways: by enshrining in a normative act and by signing an agreement on the delimitation of powers between representatives of the state and the region.
As for the differentiation of tax payments between budgets, this is usually achieved either by assigning various taxes to different budgets, or by assigning a part of the taxes collected to the budgets of a lower level. In addition to the division of tax revenues, relations between budgets can be built in the image and likeness of civil legal relations. This means that if the lower budget incurs any expenses for the higher budget, the latter reimburses these expenses according to the quarterly information on the costs incurred.
In exceptional cases, if the funds of local budgets are insufficient to reimburse expenses, according to the report of the financial authorities, the Ministry of Finance of the Russian Federation makes an advance transfer of funds for these purposes with their subsequent offset in accordance with the established reporting submitted by the financial authorities. Advance receipts are reflected in the accounting of budget execution in financial bodies as funds received from the republican budget of the Russian Federation. Thus, from the general state budget, expenses for the maintenance of state authorities, expenses related to ensuring the activities of people's deputies, reimbursement of expenses for paying the difference in interest rates, compensation for damage caused to citizens, compensation for damage and expenses for paying compensation to rehabilitated citizens, paying compensation victims of political repressions, expenses related to the storage, repair, shipment, transportation of confiscated property and treasures that are subject to transfer to federal ownership, expenses for the payment of benefits and compensations and other expenses.
The basis of the relationship between the budgets of different levels is the need to achieve the so-called minimum budget, i.e. carried out in accordance with the consolidation in accordance with the social policy of certain guarantees for the inhabitants of the region. The minimum budget is the estimated amount of income of the corresponding consolidated budget of the lower territorial level, covering the minimum necessary expenses guaranteed by the relevant higher authorities, part of which, in case of insufficient estimated volume of fixed income, is covered by deductions from regulatory revenues, subsidies and subventions by decision of the higher representative authority.
The expenditure part of the minimum budget is calculated according to the unified or group minimum social and financial norms and standards established by the higher representative body of power on the basis of current legislative acts within its financial capabilities. The development of minimum social and financial norms and standards submitted for approval by the Parliament is carried out by the Government.
The expenditure part of the minimum budget is determined by:
a) the amount of costs included in the current expenditure budget, taken into account by higher authorities in the calculations for the budget of the year preceding the planned one (in comparable conditions), taking into account the increase (decrease) in these costs caused by:
- agreed with a higher authority in the manner prescribed by law, the amount of costs in connection with a change in the composition of objects subject to budget financing;
- decisions of higher authorities on changes in social and financial norms and standards;
- change in the index of prices and tariffs according to the calculations of higher executive authorities, carried out in the prescribed manner;
b) the minimum required amount of costs included in the development budget of a given national-state or administrative-territorial entity.
And, finally, the relationship between budgets is built on the basis of respect for the rights and obligations enshrined in legislation or an agreement. This is guaranteed by the fact that public authorities are obliged to compensate in full the damage caused to legal entities and individuals as a result of the adoption by these bodies of decisions on budgetary issues in excess of their competence. The damage caused is subject to compensation at the expense of the appropriate budget on the basis of a court or arbitration court decision.
2. Expenditures of regional and local budgets
Expenses of regional and local budgets can be conditionally divided into two large groups:
Operating budget |
Development budget |
All expenses that are not related to the financing of capital construction, investments and other long-term investments (payment of salaries and other types of maintenance, expenses for organizing any festive events, covering losses). As well as expenses for the current maintenance and overhaul of housing and communal services, environmental protection facilities, educational institutions, healthcare and social security institutions, science and culture, physical culture and sports, the media, state authorities and administration, local governments. |
Allocations for financing investment and innovation activities and other costs associated with expanded reproduction. These can be investments in the authorized capital of enterprises, long-term loans for the development of local enterprises, for the socio-economic development of territories, for their own environmental programs and environmental protection measures (in excess of appropriations allocated from environmental extra-budgetary funds), other expenses for expanded reproduction |
When drafting budgets, clarifying budgets in the course of their execution, executive authorities, when considering draft budgets, approving budgets and clarifying them during execution, within their competence, respectively, have the right to:
(1) to determine the amount of financing from their budgets of measures for the socio-economic development of the relevant national-state and administrative-territorial entities within the limits of planned budget revenues, grants, subventions provided, and also taking into account borrowed funds;
(2) to determine the directions for the use of budget funds for investments, own targeted programs, as well as for joint programs with representative authorities of other national-state and administrative-territorial entities;
(3) for foreign economic activity, environmental protection measures (in excess of appropriations allocated from environmental non-budgetary funds), restoration of natural and cultural monuments under the jurisdiction of the relevant authorities, improvement of cities, towns and villages, maintenance and overhaul of housing stock, public utility facilities, a network of roads of appropriate importance (in excess of allocated appropriations from road funds), educational institutions, institutions of healthcare and social security, science and culture, physical culture and sports, the media, for the maintenance of public authorities and administration and local governments and for other purposes;
(4) to increase, within the limits of available funds, the norms of expenditures for the maintenance of housing and communal services, educational institutions, institutions of public health and social security, science and culture, physical culture and sports, police bodies of public security, environmental protection and for other purposes;
(5) to determine, in the prescribed manner, within the limits of available funds, additional benefits and allowances, as well as, within the limits of available funds, to incur other costs for providing assistance to certain categories of the population in need of social protection;
(6) to form, within the scope of its budget revenues, reserve and target funds;
(7) determine the amount of grants, subventions to the budgets of the lower territorial level and their purpose; (8) to combine on a contractual basis the funds of their budgets with the funds of other budgets, as well as enterprises, institutions, organizations, public associations and citizens to finance the construction, repair and maintenance of industrial and non-industrial facilities.
3. Revenues of regional and local budgets
taxes |
Borrowings |
Transfers from a higher budget |
|
Fixed income - income that is fully or in a firmly fixed share (as a percentage) on a permanent or long-term basis in the prescribed manner goes to the appropriate budget |
Regulatory revenues - revenues that, in order to balance revenues and expenses, go to the relevant budget in the form of percentage deductions from taxes and other payments in accordance with the standards approved in the prescribed manner for the next financial year |
In case of insufficient budgetary funds to cover expenses exceeding the minimum budget, or in cases of temporary financial difficulties in the process of executing the approved budget, the executive authorities may receive interest-bearing or interest-free loans from other budgets, as well as, by decision of the representative authorities, in the prescribed manner, issue loans for investment targets in the respective territories. This includes the right to receive short-term loans from commercial banks using their own resources. |
Grant- budget funds provided to the budget of another level of the budget system of the Russian Federation on a gratuitous and irrevocable basis to cover current expenses; Subvention- the amount allocated for a certain period from the budget of a higher level for specific purposes to equalize the socio-economic development of the corresponding national-state or administrative-territorial entity. Subsidy- budget funds provided to the budget of another level of the budget system, to an individual or legal entity on the terms of shared financing of targeted expenses. |
Revenues of regional and local budgets are represented by tax revenues, income from the operation of state property or from the sale or lease of property created through budget investments, loans. However, regional and local budgets also have transfers.
4. Other funds
Off-budget funds are funds from the federal government and local authorities associated with the financing of expenses not included in the budget.
Formation of off-budget funds is carried out at the expense of obligatory earmarked contributions. These funds have a strictly designated purpose, which guarantees the use of funds in full. The main feature that distinguishes extra-budgetary funds from the budget is that the spending of the fund's resources is targeted, and the direction of funds is strictly limited to one area.
State extra-budgetary fund - a fund of funds formed outside the federal budget and the budgets of the constituent entities of the Russian Federation and intended for the implementation of the constitutional rights of citizens to pensions, social insurance, social security in case of unemployment, health protection and medical care.
The purpose of the creation and functioning of extrabudgetary funds lies in the desire to isolate part of the resources due to the fact that the directions of spending some resources are extremely important. First of all, we are talking about funds that are directed to social payments - pensions, disability benefits, etc. The higher budget either assigns a part of its funds to similar funds, or assigns its own sources of income to the fund. In the second case, a peculiar emergence of a "parallel" budget takes place; as a rule, the development of funds follows this path.
The second type of funds are the so-called economic funds. Their essence is the same: a part of tax revenues is separated from the national (regional or local) budget and assigned to some fund (R & D funds and support for industries, the road fund).
The off-budget funds that currently exist in Russia, in addition to the sources of income (taxes) assigned to them, can also receive income from commercial activities. Through various pension programs in developed countries, colossal funds are accumulated, which are used to invest in various, as a rule, reliable securities. And the US Highway Fund is one of the largest lenders, lending funds to budgets of all levels. Another type of source of income may be borrowing in the loan capital market, including loans from the Central Bank.
Types of income and expenses of funds can be conditionally represented as follows:
Income |
Expenses |
|||
taxes |
Loans |
Other |
Target |
To ensure activities |
As a rule, a significant part of the budget of a fund is formed from tax revenues. |
In case of a lack of funds, funds can usually resort to borrowing in the loan capital market. |
Subsidies, transfers of fines and penalties, interest on placed deposits, as well as voluntary donations |
For some purpose. Under the targeted spending of funds is also understood as their transfer to other budgets. |
Firstly, the costs of collecting taxes and deductions to funds, and, secondly, the costs of maintaining the administrative apparatus, buildings, funds, etc. |
The stock market is a special type of financial relations arising from the sale and purchase of specific financial assets (securities).
The task of the stock market is to ensure the flow of capital into high-income industries. The stock market serves to mobilize and effectively use temporarily free funds.
Insurance market finance. The insurance market is a system of redistribution of resources in order to minimize or eliminate the adverse effects of any event. Insurance meets two main features of finance - the accumulation of funds in certain funds and the distribution of these funds in a certain way. The basis of insurance is also the national income.
Insurance consists in covering material and other damage to an individual or legal entity at the expense of the funds of the insurance organization, which were formed partially at the expense of the funds of the very person to whom compensation is paid. That is, on the one hand, insurance can be considered as a kind of loan: the insurer receives money in the form of an insurance premium - a regular payment under an insurance contract, and then they are "returned" to the insured when an insured event occurs. On the other hand, the insured by the time of the insured event (and receipt of insurance compensation) could not pay not only not the entire amount "due" to him, but also its hundredth share; he can also continue to pay (and already "overpay"), but the insured event does not occur.
Topic 5. FINANCE OF ENTERPRISES
1. Principles of corporate finance
The finances of enterprises are economic, monetary relations that arise as a result of the movement of money and the cash flows generated on this basis, associated with the functioning of the funds created at enterprises.
The principles of corporate finance are the fundamental rules on which the activities of the enterprise, at least its economic part, are based. Strictly speaking, they represent the principles of the functioning of the economic economy as a whole, and in this sense connect the finances of enterprises with other parts of the financial system:
1. Ensuring the diversity and protection of property rights, the existence of legal protection and the regulation of fundamental rights and obligations. The main type is private property. In most countries, it is protected by law (the Constitution). Since ancient times, two main methods of protecting property rights have been used - the recovery of property from illegal possession (the so-called vindication claim) or the requirement to stop violations of the owner's rights (the so-called negatory claim).
2. The presence of supply and demand in the markets (capital, labor, goods, etc.). As a rule, the "arrival" of funds is provided by the sale of goods (works, services), and the expenditure of funds is associated with wages, taxes, the purchase of the next batch of goods for sale or raw materials for production, etc. Thus, the finances of an enterprise are unlikely to be able to function normally without the presence of supply and demand in the relevant markets (commodity, raw materials, labor, etc.). Therefore, one of the rules of corporate finance is the need for such markets and free access to them.
3. Free pricing in the markets, the presence of competition. The manufacturer or seller must fight for the counterparty or buyer; moreover, the struggle itself has two important aspects: (1) to convince the consumer of the need to purchase and (2) to convince him of his superiority over competitors. The function of the state as a guarantor of legal protection of economic entities is to minimize the negative consequences of a particular monopolization of the market, as well as to promote the establishment of pure competition.
4. Freedom of the contract, the will of the parties, decision-making, independence in the implementation of activities, subordination only to their own profits.
5. The rule of self-financing and self-sufficiency, conducting activities at your own peril and risk.
The finances of enterprises are extremely important in the structure of the financial system, because they form the basis of the financial system. The state budget and the finances of the foundations accumulate and redistribute enormous resources, but they are still smaller than the finances of enterprises.
PP finances are the backbone of the state's financial system. The state of finances of the PP has an impact on the provision of national and regional monetary funds with financial resources. The dependence is direct: the stronger and more stable the financial position, the more secured the national and regional monetary funds.
Enterprise finance performs the following functions:
Distribution (stimulating);
Control.
Distribution the function of finance at the enterprise is that with their help all monetary incomes and funds available at the enterprise are formed and used. Performing a distributive function, finance serves the reproduction process as a whole, ensuring its continuity and influencing all its stages. In addition, the correct distribution of funds has a stimulating effect on the improvement of the enterprise.
The ability of finance to quantitatively display the course of the reproductive process allows you to control it. The basis of the control function is the movement of financial resources in both stock and non-stock forms. The control function is implemented in two ways:
Through financial indicators in accounting, indicators of statistical and operational reporting;
Through financial influence.
But if during the period of the centralized system of economic management, enterprises were set strict boundaries for their activities in terms of output, profit, cost and other indicators, then at present the impact is carried out with the help of economic levers and incentives (taxes, benefits, etc.).
2. Cash funds of enterprises
PP financial relations can be grouped into 4 groups:
Relations with other PPs and organizations;
Relations within the PP;
Within PP associations (with a higher organization, within a holding);
With the financial and credit system (budgets and off-budget funds, banks, stock exchanges).
The most important aspect of the financial activity of the PP is the formation and use of various monetary funds. Through them, economic activity is provided with the necessary funds, as well as expanded reproduction, financing of scientific and technical progress, development and implementation of new technology, economic incentives, settlements with the budget, banks.
PP cash funds can be divided into 4 groups.
- Equity funds: authorized capital, additional and reserve capital, investment fund, currency fund.
- Loan funds: bank loans, commercial loans, factoring, leasing, lenders.
- Funds of borrowed funds: consumption funds, dividend payments, deferred income, reserves for future expenses and payments.
- Operational cash funds: for the payment of salaries, dividends, for payments to the budget.
Own funds play a crucial role in the activities of PPs. When organizing a PP, it must pay the authorized capital, from which fixed assets and working capital are formed. The authorized capital is the source of the PP's own funds. It is the first cash fund to be shown in the liability section of the PP balance sheet.
In this regard, the balance is divided into:
Asset (1. Non-current assets, 2. Current assets);
Liabilities (3. Capital and reserves, 4. Long-term liabilities, 5. Short-term liabilities).
Additional capital includes the results of revaluation of fixed assets, share premium of JSC (sale of shares in excess of their nominal value), gratuitous monetary and material assets received for production purposes, appropriations from the budget for financing capital investments, receipts for replenishment of working capital.
The reserve capital is formed from deductions from profits in the amount determined by the charter.
The investment fund is intended for the development of production. It concentrates the depreciation fund, the accumulation fund, borrowed and attracted sources.
Funds of borrowed funds are of a dual nature: on the one hand, these funds are in the circulation of the PP, on the other hand, they belong to its employees (dividends and consumption fund).
Operational cash funds are created by PPs periodically. In addition to those listed at the PP, a number of other funds of funds are being created: for repaying bank loans, mastering new equipment, and research and development.
3. Cash flow management
One of the areas of PP financial management is effective cash flow management. A complete assessment of the financial condition of a PP is not possible without an analysis of cash flows. One of the tasks of managing DC flows is to identify the relationship between m / s flows of funds and profit, i.e. whether the profit generated is the result of efficient flows of PV or is it the result of some other factors.
Cash flow refers to all gross cash receipts and payments of the SP. The DC flow is associated with a specific period of time and represents the difference between the m / y of all funds received and paid by the PP for this period.
DS flow management involves the analysis of these flows, accounting for the movement of DS, and the development of a plan for the movement of DS. In world practice, the flow of DS is denoted by the concept of "cash flow". A cash flow in which outflows exceed inflows is called a “negative cash flow”, otherwise it is a “positive cash flow”.
Primary activity |
|
Revenue from product sales |
Payments to suppliers |
Receipt of accounts receivable |
Salary payment |
Proceeds from the sale of material assets, barter |
Payments to the budget and off-budget funds |
Buyers advances |
Payments % for a loan |
Consumption fund payments |
|
Repayment of accounts payable |
|
Investment activities |
|
Sale of fixed assets, intangible assets, construction in progress |
Capital investments for the development of production |
Proceeds from the sale of long-term financial investments |
Long-term financial investments |
Dividends, % of financial investments |
|
Financial activities |
|
Short-term credits and loans |
Repayment of short-term loans, loans |
Long-term credits and loans |
Repayment of long-term loans, loans |
Proceeds from the sale and payment of promissory notes |
Dividend payment |
Proceeds from the issue of shares |
Payment of bills |
Special-purpose financing |
The need to divide the activities of the PP into 3 types is explained by the role of each and their relationship. If the main activity is designed to provide the necessary funds for all 3 types and is the main source of profit, while investment and financial activities are designed to contribute to the development of the main activity and provide it with additional DCs.
As a result of the analysis of cash flows, the PP should receive an answer to the main questions: where do the cash flows come from, what is the role of each source, for what purposes are they used?
Conclusions are drawn about the sources and provision of each type of activity with the necessary DS. The analysis of cash flows is associated with the clarification of the reasons that influenced the increase or decrease in cash inflows and outflows.
There are 2 methods for calculating the flow of DS:
- straight;
- indirect.
With the direct method, the calculation of flows is carried out on the basis of PP accounting accounts; with indirect - on the basis of balance sheet indicators and F-2. The calculation basis for the direct method is the sales proceeds, and for the indirect method - profit.
With the direct method, the flow of DS is determined as their balance at the beginning, taking into account their flow for a given period. With the indirect method, the basis for calculation is retained earnings, depreciation, as well as changes in the assets and liabilities of the PE. An increase in assets reduces the PV of PP, and an increase in liabilities increases it, and vice versa.
Topic 6. CREDIT AND CREDIT SYSTEM
1. The essence of the loan and its functions
The concept of credit is closely related to the concept of loan capital.
Credit is a movement of loan capital.
The latter represents temporarily released cash. The source of their origin, as a rule, is the profit from production and trade, and this shows the unity of the three forms of capital - industrial, commercial and loan. The difference lies in the fact that the loan capital is constantly only in the form of money, not taking on either production or commodity forms. There is also a peculiarity in the form of alienation: with the industrial or commodity form of capital, purchase and sale relations are clearly traced, while for loan capital, credit relations are more characteristic.
Loan capital is called capital in cash, provided by its owner to the borrower on certain conditions.
Basic principles of the loan:
- payment;
- urgency;
- returnability;
- security;
- target character.
The most important sources of loan capital are:
- Cash intended for the restoration of fixed capital and accumulated in the form of depreciation;
- Part of the working capital released in cash due to the mismatch between the time of the sale of goods and the purchase of raw materials, materials;
- Capital temporarily free in the intervals of m / s by the receipt of funds from the sale of goods and the payment of wages;
- accumulation funds;
- Savings of the population;
- State savings.
Closely related to the concept of credit is the concept of interest and interest rate. Interest is, conditionally speaking, the price of loan capital, the cost for which the owner of free cash (creditor) could find another use for them. In this regard, there is a distinction alternative possibilities. Imagine that Ivanov is the owner of 1000 rubles. With this money, he could buy a dozen securities, which, according to experts, in a year will cost 115 rubles each. He could also buy property, the demand for which is growing at about 16-17% per year. This means that a potential borrower of these funds must offer Ivanov a large profit at the end of the year. Those. the amount of money that Ivanov should have must be more than what he would have received if he had invested in these purchases. The calculation shows that such a "price" for Ivanov's refusal to invest is at least 17% per annum. Therefore, the essence of the interest rate is to assess the cost of a potential lender's refusal to make other investments and force him to choose a loan, as well as to reimburse him for the cost of those benefits that he refused as a result of lending.
Loan features:
- redistributive (capital is redistributed by m / y industries);
- saving distribution costs (cash is replaced by credit - bills, checks, cashless payments);
- acceleration of the concentration and centralization of capital (large producers-borrowers get the opportunity to quickly concentrate capital and increase production for the purposes of economies of scale. An example would be the issuance of fast-growing joint-stock companies not shares, but bonds to finance their growth);
- credit regulation of the economy (a set of measures taken by the state to change the volume and dynamics of credit in order to influence economic processes. Various rates and benefits are provided).
2. Forms of credit
- A commercial loan is a loan provided by an enterprise to another in the form of the sale of goods with a deferred payment. Often issued by promissory note. The purpose of such a loan is to accelerate the sale of goods and profit.
- A bank loan is a loan provided by banks and other credit organizations to borrowers in the form of cash loans. The scope of its use is wider than commercial.
- A consumer loan is a loan provided to individuals. It acts in the form of a consumer commercial loan (sale of goods by installments) and a consumer bank loan (loans for consumer needs).
- State credit - a set of credit relations in which the state acts as a borrower or lender.
- International credit - the movement of loan capital m / y countries.
3. Credit system
The credit system is considered:
- as a set of credit and settlement relations, forms and methods of lending;
- as a set of credit and financial institutions.
Credit and settlement relations are associated with the movement of loan capital. The credit system as a set of financial institutions accumulates free cash and lends it. Banks are the backbone of the credit system.
The performance of individual banking functions was carried out in ancient times (Ancient Babylon, Egypt, Greece, the Roman Empire). The first predecessors of banks arose in Florence and Venice (1587) on the basis of the money changer. "Bank" in translation from Italian ("banco") means "bench of the money changer". The main operations of banks were the acceptance of cash deposits and non-cash payments. There was a charge for this.
Credit and financial institutions are divided into:
Central banks;
Commercial banks;
Central banks issue banknotes and are the centers of the credit system. CBs carry out lending operations at the expense of attracted deposits.
SCFIs include banking and non-banking organizations (insurance, investment companies, savings institutions, pension funds), they specialize in certain types of lending.
FUNCTIONS OF THE CB:
Emission;
Accumulation and storage of cash reserves of commercial banks;
CB lending;
Conducting monetary policy;
Regulation of the credit system.
In most countries (and in the Russian Federation) there is a two-tier credit system, which can be represented as follows:
1. Central (issuing) bank.
2. Commercial banks and credit organizations
Banks and banking operations in any country are the basis for the functioning of the economy, since the vast majority of settlements and credit operations go through banks. In any country, special attention is paid to the regulation of the banking sector: due to problems in banks, payments of other business entities suffer, stock market panic, withdrawal of deposits and an economic crisis may begin. The banking activity is regulated by the Federal Law "On Banks and Banking Activity".
The operations of credit institutions can be conditionally divided into credit operations of the banking sector proper:
Bank operations |
Credit operations |
1) attracting funds from individuals and legal entities in deposits (on demand and for a certain period); 2) placement of attracted funds on its own behalf and at its own expense; 3) opening and maintaining bank accounts of individuals and legal entities; 4) making settlements on behalf of individuals and legal entities, including correspondent banks, on their bank accounts; 5) collection of funds, bills of exchange, payment and settlement documents and cash services for individuals and legal entities; 6) purchase and sale of foreign currency in cash and non-cash forms; 7) attraction to deposits and placement of precious metals; 8) issuance of bank guarantees |
1) issuance of guarantees for third parties, providing for the fulfillment of obligations in cash: 2) acquisition of the right to demand from third parties the fulfillment of obligations in cash (the so-called factoring); 3) trust management of funds and other property under an agreement with individuals and legal entities; 4) carrying out transactions with precious metals and precious stones in accordance with the legislation of the Russian Federation; 5) leasing to individuals and legal entities special premises or safes located in them for storing documents and valuables; 6) leasing operations; 7) provision of consulting and information services |
All banking operations and other transactions are carried out in rubles, and in the presence of an appropriate license from the Bank of Russia - in foreign currency. The rules for conducting banking operations, including the rules for their material and technical support, are established by the Bank of Russia in accordance with federal laws. A credit organization is prohibited from engaging in production, trade and insurance activities.
In accordance with the license of the Central Bank for banking operations, the bank has the right to issue, purchase, sell, record, store and other operations with securities that perform the functions of a payment document, with securities confirming the attraction of funds to deposits and bank accounts, with other securities, transactions with which do not require obtaining a special license in accordance with federal laws, and is also entitled to exercise trust management of these securities under an agreement with individuals and legal entities. A credit organization has the right to carry out professional activities in the securities market.
Credit institutions are subject to state registration with the Bank of Russia. The Bank of Russia carries out the state registration of credit institutions and maintains the Book of State Registration of Credit Institutions. Credit institutions acquire the right to carry out banking operations from the moment they receive a license issued by the Bank of Russia.
4. Monetary policy
Monetary policy is a set of measures in the field of monetary circulation aimed at changing monetary credit.
Its main goal is to regulate the economic situation by influencing the state of credit and money circulation. Monetary policy has 2 directions:
- Credit expansion - aimed at stimulating credit and money emission.
- Credit restriction - their containment and limitation.
In the context of falling production and increasing unemployment, the Central Bank is trying to revive the conjuncture by expanding credit and lowering the rate of interest. If there is an increase in prices, "stock market fever", an increase in disproportions in the economy, then credit restrictions, an increase in%, and emission containment are applied.
Monetary regulation is carried out in several directions:
A) state control over the banking system (in order to strengthen the liquidity of banks, i.e. their ability to cover the requirements of depositors in a timely manner);
B) public debt management. In the conditions of the budget deficit and the growth of the public debt, the influence of the state credit on the loan capital market is sharply increasing. To do this, the Central Bank buys and sells government bonds, changes the price of bonds, the conditions for their sale;
C) regulation of the volume of credit transactions and money emission in order to influence economic activity.
Monetary policy methods are divided into 2 types:
- General - affect the loan capital market as a whole.
- Selective - designed to regulate specific types of credit or lending to certain industries).
- accounting (discount) policy. It has been used since the middle of the 19th century. The discount rate is a percentage on loans provided by the Central Bank to the CB, or a discount when discounting CB bills.
An increase in the interest rate (“dear money” policy) leads to a reduction in commercial bank borrowing. This makes it difficult to replenish bank resources, leads to an increase in interest rates, and a reduction in credit operations. It is carried out in order to combat inflation. Lowering the rate (policy of "cheap money") leads to an increase in credit and money supply. It is carried out in case of a decline in production.
- open market operations consist in the sale or purchase of the Central Bank from commercial banks of government securities, bank acceptances and other credit obligations at a market or pre-announced rate.
The initiator of these operations is the state. In order to prevent inflation, securities are sold. At the same time, their profitability should be higher than that of other assets.
- reserve norms (requirements)- this is part of bank deposits and other liabilities that must be kept in an account with the Central Bank. This stock of CBs is not allowed to be used to carry out their operations.
Through the regulation of the reserve requirement, the state increases or decreases the total money supply in the country. If the norms increase by 2 times, then CBs will be forced to reduce credit emission. In addition, this will force the CB to reduce current accounts and direct part of the funds to increase reserves. As a result, the money supply decreases, and interest on loans increases. All this helps in the fight against inflation. If it is necessary to increase the money supply, then the norms are reduced.
The selective methods of monetary policy include:
Control over certain types of loans;
Regulation of risk and liquidity of banking operations.
Topic 7. TAXES AND TAX SYSTEM
1. Types of taxes
Taxing people is as old as time. One of the most famous taxes was "tithe" - a tenth of the harvest the peasant gave in payment for the use of land. This tax lasted until the end of the 19th century.
In the states of the ancient world (Rome, Athens, Sparta), taxes, as a rule, were not levied, because. there were no permanent departments. By providing services to the state, citizens spent their own funds. But fees and duties from merchants in ports, markets, and city gates existed even then.
In some countries, to save public money, the right to levy taxes was put up for auction. The one who gave the highest price received it. Many cities were surrounded by walls so that no one could escape the tax collectors.
Taxes are payments that are obligatory paid to the state by legal entities and individuals. These payments are compulsory and free of charge.
Taxes perform 2 functions:
- fiscal (consists in the formation of the state's cash income);
- economic (consists in the impact through taxes on social reproduction). Taxes in this function perform a stimulating, restrictive and controlling role.
The functions of taxes are interrelated. The growth of tax revenues to the budget creates a material opportunity for the implementation of the economic role of the state. And the achieved acceleration of development and growth of profitability of production allows the state to receive more funds.
The tax contains mandatory elements:
- subject (payer);
- object (income, property, goods);
- source of tax payment (profit, income, dividend);
- unit of measurement of the object of taxation;
- the value of the tax rate (quota);
- procedure and terms of tax payment;
- tax incentives.
There are 3 ways to collect taxes:
- Cadastral (cadastres are used, i.e. registers containing the classification of typical objects according to their external features). Applies to land, buildings, deposits.
- At source (charged before the income is received by the taxpayer).
- By declaration (submission of tax declarations).
There are 2 types of taxes:
A) direct (charged directly from income and property);
B) indirect (established in the form of surcharges to the price or tariff). VAT, excises.
According to the impact, taxes are divided into:
Progressive (tax increases faster than income grows);
Regressive (a higher % is charged on low incomes and a lower % on high incomes);
Proportional.
2. Laffer curve
There are 3 ways to increase tax revenues to the budget:
- expansion of the circle of taxpayers;
- increase in the number of objects subject to indirect taxes;
- increase in tax rates.
In foreign countries, such an indicator of the level of taxation as "the elasticity of the tax system" is used. According to him, tax rates should be so high as to prevent inflation, but at the same time so low as to ensure the development of production.
It is difficult to mathematically accurately determine the value of the optimal tax rate, but there are 3 signs by which one can judge whether the critical point of taxation has been exceeded:
A) if, with the next increase in the tax rate, budget revenues grow disproportionately slowly or decrease;
B) if the rate of economic growth decreases, investment decreases, the situation of the population worsens;
C) if the "shadow" economy grows - hidden and explicit tax evasion.
All this testifies to the negative impact of taxes on the economy.
Investigating the relationship between the tax rate and the receipt of taxes in the budget, the American economist Arthur Laffer showed that raising taxes can lead to a decrease in budget revenues.
Topic 8. INSURANCE
All participants in the insurance market can be conditionally represented by the following groups:
Buyers |
Intermediaries |
Sellers |
State |
Policyholders |
Insurance agents and insurance brokers |
Insurers |
Supervisory authorities |
Persons who need or are required by law to insure their life, property or liability. These are those whose financial resources are "withdrawn" by the insurer and transferred to other segments of the financial market |
Persons who bring supply and demand together. Insurance agents act on behalf of the insurer, and insurance brokers - on their own behalf, but both of them - on behalf of the insurer. |
Properly licensed subjects of the insurance market - in the vast majority of cases, legal entities (including the state). It is they who accumulate the funds of insurers and place these funds into reliable and liquid assets |
We are talking about those cases where the state does not participate in insurance relations as a representative of one of the three previously listed groups. This refers to the participation of the state in the regulation of the insurance market, which is carried out in various ways (they will be discussed below) |
Essential features of insurance:
- when insuring, monetary redistribution relations arise, due to the presence of the probability of the onset of sudden, unforeseen and insurmountable events, i.e. insured events entailing the possibility of causing material or other damage.
- When insuring, the distribution of the damage caused between the participants in insurance - the insurers, which is always closed, is carried out. Those. conditions have been created for compensation for damage by sharing the losses of some farms among all the insured. Insurance becomes the most effective method of indemnification when millions of policyholders and insured persons participate in it. This ensures the concentration of funds in a single fund - insurance.
- Insurance provides for the redistribution of damage both between territorial units and in time.
Insurance can be divided into 5 branches:
property, social, personal, liability insurance, business risk insurance.
Insured persons are recognized as legal entities and capable individuals who have concluded insurance contracts with insurers or who are insurers by virtue of law.
Policyholders have the right to conclude insurance contracts with insurers for third parties in favor of the latter (insured persons).
Insurers are legal entities of any organizational and legal form, created to carry out insurance activities (insurance companies and mutual insurance companies) and have received a license to carry out insurance activities in the territory of the Russian Federation.
Legislative acts of the Russian Federation may establish restrictions on the establishment by foreign legal entities and foreign citizens of insurance organizations on the territory of the Russian Federation.
The subject of direct activity of insurers cannot be production, trade and intermediary and banking activities.
Insurers may carry out insurance activities through insurance agents and insurance brokers.
Insurance agents - individuals or legal entities acting on behalf of the insurer and on his behalf in accordance with the powers granted.
Insurance brokers - legal entities or individuals duly registered as entrepreneurs, carrying out insurance intermediary activities on their own behalf on the basis of instructions from the insured or insurer.
An insured risk is a prospective event against which insurance is provided.
An event considered as an insured risk must have signs of probability and randomness of its occurrence.
An insured event is an event that has taken place, provided for by the insurance contract or the law, upon the occurrence of which the insurer's obligation arises to make an insurance payment to the insured, the insured person, the beneficiary or other third parties.
In the event of an insured event with property, the insurance payment is made in the form of insurance compensation, in the event of an insured event with the identity of the insured or a third party - in the form of insurance coverage.
The sum insured is the sum of money determined by the insurance contract or the amount of money established by law, on the basis of which the amounts of the insurance premium and insurance payment are determined, unless otherwise provided by the contract or legislative acts of the Russian Federation.
Sum insured - the amount of money for which property, life, health are actually insured.
When insuring property, the sum insured cannot exceed its actual value at the time of the conclusion of the contract (insurance value). The parties may not dispute the insured value of the property specified in the insurance contract, unless the insurer proves that he was deliberately misled by the insured.
If the sum insured determined by the insurance contract exceeds the insured value of the property, it is invalid by virtue of law in that part of the sum insured that exceeds the actual value of the property at the time of conclusion of the contract.
The insurance indemnity may not exceed the amount of direct damage to the insured property of the insured or a third party in the event of an insured event, unless the insurance contract provides for the payment of insurance indemnity in a certain amount.
In the event that the sum insured is lower than the insured value of the property, the amount of insurance indemnity is reduced in proportion to the ratio of the sum insured to the insured value of the property, unless otherwise provided by the terms of the insurance contract.
In the event that the policyholder has entered into property insurance contracts with several insurers for an amount exceeding the total insured value of the property (double insurance), the insurance indemnity received by him from all insurers for insuring this property cannot exceed its insured value. At the same time, each of the insurers pays insurance compensation in the amount proportional to the ratio of the insurance amount under the contract concluded by him to the total amount under all insurance contracts of the specified property concluded by this insured.
The terms of the insurance contract may provide for the replacement of the insurance payment with compensation for damage in kind within the amount of the insurance indemnity.
In a personal insurance contract, the sum insured is set by the insured by agreement with the insurer.
Insurance coverage is paid to the insured or a third party, regardless of the amounts due to them under other insurance contracts, as well as under social insurance, social security and in order to compensate for harm. At the same time, insurance coverage for personal insurance, due to the beneficiary in the event of the death of the insured, is not included in the composition of hereditary property.
The insurance premium is the payment for insurance, which the policyholder is obliged to pay to the insurer in accordance with the insurance contract or the law. In international insurance it is called an insurance premium.
The insurance rate is the rate of the insurance premium per unit of the sum insured or the object of insurance.
Insurance coverage is the ratio of the sum insured to the value of the insured property. Max. insurance coverage - 100%.
Insurance rates for compulsory types of insurance are established or regulated in accordance with the laws on compulsory insurance.
Insurance tariffs for voluntary types of personal insurance, property insurance and liability insurance can be calculated by insurers independently. The specific amount of the insurance rate is determined in the insurance contract by agreement of the parties.
The object of insurance may be insured under one contract jointly by several insurers (co-insurance). At the same time, the contract must contain conditions that define the rights and obligations of each insurer.
Reinsurance is insurance by one insurer (reinsurer) on the conditions specified in the contract of the risk of fulfillment of all or part of its obligations to the insured by another insurer (reinsurer).
An insurer that has entered into a reinsurance contract with a reinsurer remains liable to the policyholder in full in accordance with the insurance contract.
Insurance field – max number of objects that can be insured.
The insurance portfolio is the actual number of insured persons, objects or active insurance contracts in a given territory.
An insured event is an actual event, in connection with the negative or other agreed consequences of which the insurance indemnity or the sum insured can be paid.
Insurers may form unions, associations and other associations to coordinate their activities, protect the interests of their members and implement joint programs, if their creation does not contradict the requirements of the law. These associations are not entitled to directly engage in insurance activities.
Insured damage - the cost of completely lost or the degree of depreciation of partially damaged property according to the insurance assessment.
The minimum amount of the paid-in authorized capital formed at the expense of funds on the day a legal entity submits documents for obtaining a license to carry out insurance activities must be at least 25,000 MMROT - when carrying out types of insurance other than life insurance, at least 35,000 minimum wages labor - when carrying out life insurance and other types of insurance, at least 50 thousand MMROT - when carrying out exclusively reinsurance.
To ensure the fulfillment of accepted insurance obligations, insurers form from the received insurance premiums the insurance reserves necessary for future insurance payments for personal insurance, property insurance and liability insurance.
In a similar manner, insurers have the right to create reserves to finance measures to prevent accidents, loss or damage to the insured property.
Insurers have the right to invest or otherwise place insurance reserves and other funds, as well as issue loans to policyholders who have entered into personal insurance contracts, within the insurance amounts under these contracts.
In order to ensure their solvency, insurers are required to comply with the normative ratios between assets and insurance liabilities assumed by them. The methodology for calculating these ratios and their standard sizes are established by the federal executive body for supervision of insurance activities.
Thus, the financial stability of insurers is ensured by:
payment of authorized capital;
availability of insurance reserves;
reinsurance system;
establishing the obligation to comply with various standards and guarantees.
Authorized capital of an insurance company |
Availability of insurance reserves and funds |
reinsurance system |
Regulations and warranties |
The size of the authorized capital of a legal entity applying for a license to carry out insurance activities must be at least __________ ECU. By the time of obtaining a license, the entire capital must be fully paid |
To ensure the fulfillment of accepted insurance obligations, insurers form insurance reserves necessary for future insurance payments for personal insurance, property insurance and liability insurance from the received insurance premiums. Insurers also create reserves to finance measures to prevent accidents, loss or damage to insured property. From the income remaining after payment of taxes and at the disposal of insurers, they can form the funds necessary to ensure their activities. |
Reinsurance is the insurance by the insurer (in this case, he acts as the insured) of part of the risks from another insurance company. In this case, the original insurer remains fully responsible to the policyholder for the payment of insurance compensation. Through reinsurance, "unbearable" risks for one insurer are distributed among several insurance companies, thereby leading to a reduction in risk for each individual insurer. Of course, this is not done free of charge, and the insurer pays a certain premium to the reinsurer. |
In order to ensure their solvency, insurers are required to comply with the normative ratios between assets and insurance liabilities assumed by them. Insurers that have assumed obligations in amounts exceeding the ability to fulfill them at the expense of their own funds and insurance reserves are obliged to insure the risk of fulfilling the corresponding obligations with reinsurers. Placement of insurance reserves should be carried out by insurers on the terms of diversification, repayment, profitability and liquidity |
St. Petersburg Education Committee
State educational institution
COLLEGE "HIGHEST BANKING SCHOOL"
« I APPROVE"
Director of the VBS College
__________________
"" 200 g.
Registration number ___________________
LECTURES
"FINANCE, MONEY CIRCULATION
AND CREDIT»
for secondary vocational education
specialty 080108 "Banking"
full-time education,
with a standard training period - 56 hours
(continuation)
St. Petersburg
SECTION I. MONEY............................................................... ................................................. .................... 5
Chapter 1. THE NEED FOR MONEY, THEIR ORIGIN AND ESSENCE.....
1.1. Preconditions and significance of the appearance of money .............................................. ...................... 5
1.2. Essence of money .............................................................. ................................................. ................. 7
CHAPTER 2. FUNCTIONS, TYPES OF MONEY .............................................. ...................................... ten
2.1. Functions of money, composition and features .............................................. ............................. ten
2.2. Types of money .............................................................. ................................................. ......................... 16
2.3. Money of non-cash circulation .................................................................. ........................................ 19
Implementation of credit and settlement operations;
Carrying out operations with securities;
Savings and accumulation as a means;
Estimation of the volume of resources involved in the production process (fixed and working capital), etc.
Money arises under certain conditions for the implementation of production and economic relations in society and contributes to their further development. Under the influence of changing conditions for the development of economic relations, the features of the functioning of money also change.
The immediate prerequisites for the emergence of money include:
Transition from a subsistence economy to the production of goods and the exchange of goods;
Property isolation of producers of goods - owners of manufactured products.
In the initial period of the existence of human society, a subsistence economy dominated, in which products were produced for their own consumption. Gradually, in the interests of increasing production, and to a certain extent under the influence of natural conditions (for example, such as conditions for the development of animal husbandry, agriculture, fishing, etc.), people specialized in the manufacture of certain types of products. At the same time, it was possible to use the increased number of products not only to meet the needs of the manufacturer, but also to exchange for other products needed by this manufacturer. This is the most important prerequisite for the emergence of product exchange.
The transition to the production of goods and the exchange of goods was accompanied primarily by the fact that instead of manufacturing products to meet the needs of the economic entity, the production of products developed for exchange for other goods or for sale. Such a transition was based on the specialization of producers in the manufacture of certain types of products, which increased its production based on an increase in labor productivity.
The property separation of commodity producers, who are the owners of the produced goods, made it possible to exchange their goods for others or to sell goods for money.
The direct exchange of goods for goods can be only if the seller needs exactly the goods that are offered for exchange by the other party. This also assumes that other commodity producers have the opportunity to present for exchange the products needed by this producer, and accordingly, this producer has the products needed by another commodity producer.
Therefore, the exchange of goods can take place if the parties involved in the exchange deal have the necessary goods. However, this significantly limits the possibility of exchanging goods. In addition, when exchanging, the interests of commodity producers must be taken into account and the requirement of equivalence of the value of the exchanged goods must be observed, which in turn also limits the exchange, including due to the indivisibility of the exchanged goods (for example, cattle).
Compliance with the requirements of the equivalence of exchange involves the measurement of the value of goods based on the labor costs for their manufacture.
The desire to develop exchange prompted an increase in the production of goods, the allocation of a universal equivalent from the variety of exchanged goods used to measure value and in the exchange of goods. The increase in the production of goods increased the desire to develop exchange and the interest in isolating from the variety of exchanged goods a universal equivalent used in the exchange of goods.
The development of exchange, the gradual increase in its intensity, first led to the use of certain types of goods (livestock, furs), and then precious metals (mainly gold) as a universal equivalent. The isolation of gold as a universal equivalent and, ultimately, as money was facilitated by its homogeneity, divisibility and safety from deterioration.
The transition from a subsistence to a commodity economy, as well as the requirement to observe the equivalence of exchange, necessitated the emergence of money, without which the mass exchange of goods is impossible, which is based on industrial specialization and property isolation of commodity producers.
The need for the emergence and use of money is confirmed by numerous unsuccessful attempts to do without them. This is evidenced by the bankruptcy of an attempt by R. Owen in 1832 to exchange goods without money, with the help of valuation of goods, based on the cost of working time using "labor bonds". The attempts to carry out product exchange in Russia on the basis of natural coefficients, carried out in 1918 and 1921, were also unsuccessful.
Example. In 1921, the following natural exchange rates were used:
1 arshin of calico = 20 pounds of grain;
1 pack of matches = 13.5 pounds of grain;
1 pound of nails = 23 pounds of 7 pounds of grain.
In connection with the differences in individual types of grain, it was established:
100 weight units wheat = |
135 units of oats; |
200 weight units of corn. |
The emergence of money and its use was accompanied by important consequences. The appearance of money made it possible to overcome the narrow framework of the mutual exchange of individual producers of goods and create conditions for the emergence of a market in which many owners of different goods can participate. This, in turn, contributed to the further development of the specialization of production and increase its efficiency.
It was important that thanks to the use of money, it became possible to divide the one-time process of the mutual exchange of goods (T-T) into two processes carried out at different times: the first consists in the sale of one's goods (T-D). the second is in acquiring the right product at another time and in another place (D-T).
At the same time, the use of money is no longer limited to participation as an intermediary in the exchange of goods. On the contrary, the functioning of money takes on the features of an independent process: commodity producers can keep the money received from the sale of their goods until the moment the necessary goods are purchased. Hence, money savings arose, which could be used both for the purchase of goods, and for lending money and paying off debts.
As a result of such processes the movement of money acquired independent significance, separated from the movement of goods.
The functioning of money received even greater independence in connection with the replacement of full-fledged money with its own value, banknotes, as well as with the subsequent abolition of the fixed gold content of the monetary unit. At the same time, money that does not have its own value began to function in circulation, which made it possible to issue banknotes in accordance with the need for circulation, regardless of the presence of gold backing.
The independence of the functioning of money has expanded significantly with the advent of non-cash payments, including payments based on the use of electronic technology.
1.2. Essence of money
The considered processes indicate that money is a necessary active element and an integral part of the economic activity of society, relations between various participants and links in the reproduction process.
The essence of money is characterized by their participation in:
Implementation of various types of public relations; the essence of money cannot be unchanged: it must reflect the development of economic relations in society and changes in money itself;
Means of circulation;
means of payment;
Means of accumulation.
In addition to these functions, it is often recognized fulfillment of the function of world money by money(international means of payment), in which they are used for monetary transactions between countries. The performance of such a function in the presence of gold money or freely convertible currency was not in doubt. In modern conditions, the monetary unit of the Russian Federation - the ruble - does not have its own value and a fixed gold content. As a rule, rubles are not used for settlements with other countries, they do not perform the function of world money.
The functions of money are considered as a manifestation of their essence. However, they can only be carried out with the participation of people. It is people who, using the possibilities of money, can determine the prices of goods, use money in the processes of sale and payments, and also use them as a means of accumulation.
Such an approach to the functions of money means that money is an instrument of economic relations in society, and the functions of money can only be carried out with the participation of people.
Fulfillment by money cost measure functions is to assess the value of goods by setting prices.
The basis for setting prices for commodities is their value, which depends primarily on the amount of socially necessary labor spent on the manufacture of commodities. When setting the price, the initial value is not the individual level of labor costs of an individual commodity producer for the manufacture of goods, but the socially necessary level of costs. Accordingly, the socially necessary costs for the production of certain types of goods are fixed in prices.
In cases of identical prices for certain types of goods, the advantages are given to producers whose production costs of goods are lower than socially necessary. On the other hand, producers whose production costs are higher than socially necessary ones experience losses to the extent that they are forced to reduce or stop the production of such goods. This shows the activity of the impact of money, through the use of which the reduction of costs for the manufacture of goods is stimulated.
At the same time, when it comes to measuring the magnitude of the value of a commodity, what is meant is its expression in prices, which also characterize the relative price level in comparison with the prices of other goods. There is nothing unusual here, since in some areas of human activity the method of measurement in relative terms is also used. In other words, the prices of commodities reflect not only the absolute, but also the relative value of their value, as well as the ratio of the value of various commodities.
Some difficulties in determining the price of a commodity arise in connection with the transition from the use of money, which has its own value, to the use of banknotes that are not exchangeable for gold. When using full-fledged money, there are sufficient grounds for establishing the price of goods based on the ratio of the value of the goods to the value of the monetary unit.
In addition, when using full-fledged money, the gold content (weight) of the monetary unit is usually fixed, which makes it possible to use this value as a price scale.
However, if in modern conditions, instead of full-fledged money, monetary units that do not have their own value are widely used, then price fixing becomes much more complicated. Nevertheless, defective money is also used to set prices. There is as yet no comprehensive, acceptable explanation on this issue. Thus, the point of view, according to which not real, but conceivable gold, may participate in the process of pricing; accordingly, there is no need to use full-fledged money in the pricing process.
There are different opinions in the economic literature on this issue. Some authors believe that defective money is a representative of gold and replaces it in all functions, including the function of a measure of value. At the same time, changes in the price of gold have a certain effect on the price level. Other authors express the opinion about the possible use of money for pricing in connection with giving them the right to serve as legal tender. Sometimes attention is drawn to the fact that the ratio of prices for various goods is also determined on the basis of established traditions.
In connection with the issues under consideration, the scale of prices is of great importance. When using full-fledged money, the law determines weight content of gold in monetary unit. This value used as a price scale; the prices set are linked to the content of gold in the monetary unit.
As a result of the abolition of the fixed gold content of the monetary unit and the transition to defective banknotes, some features of the characteristics of the price scale arose. There are different points of view on this issue.
One of them is that inferior money acts as representatives of gold and, accordingly, with an increase in the mass of such money in circulation, each of the monetary units represents a smaller amount of gold. One could, with certain reservations, agree with this point of view, if it were possible (which is unlikely) to determine the amount of gold represented by money that cannot be exchanged for gold.
Another point of view is the possibility of determining the scale of prices when using money that is not exchangeable for gold, based on the subsistence level of one person. Supporters of this point of view take the consequence (changes in the subsistence minimum, taking into account price changes) as the initial value for determining the value of the monetary unit. In addition, here the value of the price scale is characterized based on changes in the prices of personal consumption goods and does not take into account changes in the prices of industrial goods. It is quite possible that the scale of prices, the levels and ratios of the prices of various commodities are based to a large extent on the traditional ratios that existed with the use of full-fledged money. At the same time, it must be borne in mind that price changes occur not only in connection with changes in the scale of prices, inflationary processes, but also in connection with changes in the cost of goods. However, the necessary clarity on this issue is still lacking.
The reference point in setting prices with the use of money, that is, with the help of the function of the measure of value, is mainly the magnitude of the value of goods. However, when setting prices, they are not limited to this, they take into account some other circumstances, including the use value of goods, as well as the cost and prices of available interchangeable goods.
With regard to taking into account, when setting prices, the peculiarities of the use value of the respective goods, attention should be paid to the following. Prices for new types of products must correspond to changes in their use value in comparison with previously manufactured products. If, for example, the performance of a new turbine is twice that of a previously manufactured one, then the price of the new product, despite the difference in cost, cannot be more than twice the price of the previously manufactured one. In other words, when setting the price of a new product, its use value is taken into account.
When setting prices for certain types of goods, it is necessary to take into account the level of prices of interchangeable goods. Ignoring this circumstance may lead to a restriction of the possibility of selling individual goods.
In addition, when setting prices for goods, the presence of effective demand, the actually developing ratios of the volume of supply of goods and effective demand, etc., should be taken into account. goods offered for sale.
Therefore, when setting prices for certain types of goods, the initial value is their cost, but, in addition, other circumstances must be taken into account. In particular, prices may change under the influence of measures taken by the state, including in the form of taxes (sales tax), excises, customs duties.
The versatile use of money in pricing processes indicates the groundlessness and limitation of characterizing their participation in such processes as a unit of account or, as some authors argue, as "money of account", or a unit of account.
This characteristic seems to be unacceptable also because it lacks the object of the account - the cost. It is more reasonable to define the participation of money in pricing as a measure of value.
money like medium of exchange used to pay for purchased goods. At the same time, a feature of this function of money is that the transfer of goods to the buyer and its payment occur simultaneously. In this function, cash banknotes are used. It should be borne in mind that in the Russian Federation it can only be performed by the Russian currency (rubles). The use of foreign currency in the sale or purchase of goods is not allowed.
As a means of payment for purchased goods, money is used for a short time. The same banknotes can be used repeatedly in various transactions, moving from one transaction participant to another. Here, the speed of circulation of money is of great importance: the faster the turnover is made, the less money is needed for the circulation of goods. Accordingly, the velocity of money circulation is important for regulating the amount of money needed for circulation.
The participation of money as a means of circulation includes the possibility of influencing economic relations between sellers and buyers. Thus, the buyer of the goods must first make sure that the use value of the offered goods meets the requirements. Without compliance with this requirement, implementation is not carried out. The buyer also controls the price of the offered goods. This takes into account the price level, the ratio of supply and demand for the goods scheduled for sale, as well as the price level for goods that can replace the offered goods.
The amount of payment for the purchased goods can be regulated by the parties involved in the sale (seller and buyer) and deviate from the originally requested price.
For its part, the seller must ensure that the buyer has the funds.
All this means that in the function of a medium of circulation, money can be used as an instrument of mutual control of the participants in a transaction for the sale of goods.
The total volume of turnover, in which money participates as a medium of circulation, is relatively small and is only a part of the volume of total money turnover.
When money performs the function of a medium of exchange and maintains price stability, it is important that the volume of effective demand corresponds to the supply of goods. Compliance with this requirement is due to the desire to prevent a delay in the sale of goods due to insufficient means of circulation, as well as the possibility of unreasonable price increases and the influence of an artificial excess of effective demand over the supply of goods.
That's why supplying the circulation with the necessary mass of banknotes is of great importance. However, the solution of such a problem is associated with considerable difficulties. First of all, the available recommendations on this issue do not allow to determine the real need for money. This refers to the law of the amount of money in circulation, which characterizes the dependence of the need for cash on the volume of sales of goods, the amount of payments and the velocity of money circulation. A correct characterization of the dependence of the need for turnover in cash turns out to be insufficient for a specific calculation of such a need, especially for the coming period (see more on this below). Equally, such a calculation is practically impossible when using the equation of exchange.
In modern conditions, it is difficult to determine the actual need for money for various reasons. One of them is that the boundaries of cash circulation and non-cash payments are "blurred". Thus, enterprises carry out settlements in cash on a relatively large scale and it is difficult to foresee the volume of such operations. Along with this, the money turnover of the population is expanding with the help of plastic cards. It is very difficult to foresee the volume of turnover carried out with the help of such cards, instead of the turnover of cash. It should also be taken into account that often in Russia the flow of cash into circulation is delayed, including in connection with the payment crisis.
All this testifies to the expediency of measures to improve the use of money in the performance of their function as a means of circulation.
The function of a means of payment is also performed by cash, mainly in relationships in which individuals participate. Only a small part of payments by legal entities (mainly for not very large amounts) is made in cash. However, the predominant part of the money turnover, in which money acts as a means of payment, falls on non-cash cash settlements between legal entities and, to a certain extent, in the settlements of individuals (transfer of funds from a bank deposit to pay for utilities, etc.).
When making a certain part of money turnovers in the function of a means of payment, in contrast to turnovers in the function of a means of circulation, it is allowed to use foreign currency in addition to the Russian currency (rubles). This happens, for example, when citizens contribute foreign currency in cash to deposits in banks and then receive the invested funds from the bank.
Relatively often, settlements are made in foreign currency when making payments for export and import operations, in the event of the occurrence and repayment of debts in relations with foreign firms and states.
The predominant mass of payments is made when carrying out non-cash payments, in which the movement of cash is replaced by credit transactions made in monetary units.
Some of the mutual payments of participants in the money turnover occur on the terms of offsetting mutual claims, the use of which helps to accelerate the repayment of debts of participants in such operations and reduces the need for turnover in money. When carrying out operations in the part of the creditable turnover, there is no turnover of money; in this part, money serves as a measure of value and is used as a unit of account. Only uncredited amounts are transferred using money as a means of payment.
The function of money as a means of payment both in cash circulation and in non-cash payments cannot be reduced to the movement of funds. An inseparable element of payments is their use to regulate the relationship between participants in such operations.
Settlements for acquired inventory items and services rendered involve making payments subject to the payer's control over the supplier's compliance with the terms of the contract.
In economic literature, especially in the works of foreign authors, it is often recognized that money performs only one function in circulation - a medium of circulation instead of two functions - a medium of circulation and a means of payment. With such a position, the similarity of transactions for the transfer of money in payment for goods and in payment of debts is taken into account. So, when characterizing one function - the medium of exchange - it is noted that it includes "... money used to pay for goods and services, as well as to pay debts." In other words, the functions of the medium of circulation and the means of payment are combined in one function - the means of circulation.
This takes into account the similarity of operations for paying for goods and paying debts. Supporters of this position ignore the fact that, despite the similarity of operations for paying for goods and paying debts, there are significant differences between them. Indeed, when goods are sold on the terms of their immediate payment, credit relations do not arise between the participants in such operations. On the contrary, when paying debts, there are credit relations between the participants in operations. It is these circumstances, taking into account the different nature of the relationship between the participants in the money turnover, that determine the validity of the allocation of two functions in the money turnover - the means of circulation and the means of payment.
Money that is not directly involved in circulation, including in the functions of a means of circulation and a means of payment, forms monetary accumulations and performs the function means of accumulation.
The composition of monetary savings includes cash balances held by individual citizens, as well as cash balances in bank accounts. The formation of monetary savings of individual citizens is due to: the excess of their income over expenses, the need to create a reserve for upcoming large and seasonal expenses.
The presence of cash savings allows the population to use them in the coming periods to pay for purchased goods and pay off various obligations. Money in the function of a store of value also consists of balances accumulated by enterprises and organizations in their bank accounts.
The performance of money as a means of accumulation is an important prerequisite for the development of credit relations, with the help of which it becomes possible to use temporarily free funds generated in various parts of the economy and among the population to provide loans to enterprises and organizations of other parts of the economy and individual citizens. Emerging and systematically renewed credit relations contribute to the appropriate use of the resources of the economy, the development of production and a more complete satisfaction of the needs of the population. Such are the economic results of the use of money when it performs the function of a store of value.
Comparing the various types of cash savings, it is necessary to highlight accumulation of cash from the population. In practice, with respect to such balances, there are no restrictions on their use to pay for goods and obligations. This is the most mobile and liquid type of cash savings. Moreover, cash serves as legal tender and is required to be accepted in all types of payments.
Somewhat less mobility and liquidity are inherent for various reasons in the balances of funds of legal entities and individuals in bank accounts. There may be certain restrictions on the use of such funds under certain conditions. Thus, if the funds on the settlement account of the enterprise are insufficient to satisfy all claims, the available funds can be used in accordance with the established order of satisfaction of claims, and not only by order of the enterprise-owner of the account. Nevertheless, one should not lose sight of the fact that bank balances to a certain extent represent not only the accumulation of money, but also investments that generate income.
In this regard, it should be noted that money invested in stocks, bonds and other securities is no longer so much the accumulation of money as their investment to generate income.
At the same time, money in the function of a means of accumulation in the form of its most mobile and liquid part, which is cash, on the one hand, does not generate income; on the other hand (especially in conditions of inflation) they are subject to the risk of depreciation. Various conditions for the use of money in the function of a store of value suggest the need for certain efforts to expediently allocate the accumulated money.
When solving the problem of the appropriate placement of monetary savings, the following set of requirements is taken into account:
Possibility of unhindered use of placed funds;
Reliability of investments;
Risk minimization;
Opportunity to earn income from investments. The accumulation of cash from the population has such an important advantage as the almost unhindered possibility of using it for various expenses. This serves as a considerable incentive to increase such savings.
There are certain restrictions on the use of cash held by businesses. They consist primarily in establishing the limit value of the balance of cash on hand. In addition, enterprises can spend cash in accordance with their intended purpose.
However, cash balances do not generate income. At the same time, in conditions of inflation, there is a significant risk of losses due to the depreciation of money. All this increases the interest in reducing the balance of funds, primarily among the population.
The desire to spend money savings as quickly as possible and reduce cash balances was manifested in the use of the term "hot money", which they seek to get rid of. Investments in credit institutions have considerable advantages compared to cash balances, especially since deposits and deposits generate income.
Such investments also have negative features. In particular, there is no full guarantee of the safety of deposits and deposits due to possible losses in cases of insolvency of credit institutions. In addition, income from deposits and deposits does not always compensate for the depreciation of the monetary unit. As a result, there is less interest in placing monetary savings in credit institutions. The above applies in many respects to investments in securities.
One of the ways to prevent losses from the depreciation of monetary savings is their use for the acquisition of property and inventory items. Nevertheless, this use of monetary savings has certain disadvantages, and above all, the limited possibility of quick use of funds invested in property for various expenses.
It is also impossible to ignore the difficulties of a reasonable valuation of property when acquiring it, as well as the possibility of its sale. Measures to prevent losses during the storage of money savings include their investment in the balances of freely convertible currencies. With the seeming reliability of investing savings in foreign currency, one should not lose sight of the possibility of losses due to changes in the exchange rate, as well as the profitlessness of investments in cash foreign currency. In addition, it should be taken into account that the investment of monetary savings in cash foreign currency is an interest-free loan to the country - the issuer of the currency.
Thus, it is preferable to use cash savings not as a balance of cash, but as various investments, taking into account the characteristics of each type of investment. Under such conditions, money often ceases to function as a store of value.
Despite the differences in the functions of money, there is a relationship and unity between them, due to the essence of money. Thus, the function of the measure of value is realized in the functions of the means of circulation and means of payment. At the same time, money can alternately perform the functions of a medium of circulation and a means of payment, and also serve as a means of accumulation. In turn, monetary accumulations can be used as a means of circulation and as a means of payment.
Function of world money manifested in the relationship between countries or between legal entities and individuals located in different countries. In such relationships, money is used to pay for purchased goods, when making credit and some other transactions. When various countries used full-fledged money, which had its own value, there were no serious complications with their use in international relations. Here, the money of individual countries could be used for settlements with other countries, based on the actual value of the monetary unit of each country.
When the transition to defective money was made, the former practice proved insufficiently acceptable. Under the new conditions, settlements between countries began to be made using freely convertible currencies (US dollars, yen, German marks, etc.) or in such international units as the ECU (Europian Currency Union), or since 1999 - the euro.
If the payer, located in Russia, has a non-convertible currency, he can exchange it for a freely convertible currency at the applicable rate and, if there are permissions, transfer to other countries. On the contrary, when a freely convertible currency is received from abroad, it is credited to a transit account. From this account, a part of the incoming convertible currency can be sold into the local currency at the applicable rate, and if permission is available, part of the currency can be used for settlements with foreign correspondents. This means that the function of world money can be performed by monetary units of freely convertible currencies. Non-convertible monetary units cannot perform such a function.
2.2. Types of money
Money is a developing category and since its inception has undergone significant changes, manifested in the transition from the use of some types of money to others, as well as in changing the conditions for their functioning and in increasing their role.
In certain areas of money circulation and in different periods, under certain conditions, various types of money are used.
The predecessors of money were certain types of goods used in exchange as equivalents. Such equivalents were cattle, furs and even tobacco (in Virginia, USA).
The development of exchange, its intensity led to the allocation of money as a universal equivalent, the material basis of which was precious metals and, above all, gold. The advantage of gold money in comparison with other equivalents (cattle, furs) consisted in the homogeneity of the monetary material, its divisibility, safety from damage.
In the relatively recent past (the 19th century and the beginning of the 20th century), cash was widely used in circulation in the form of gold coins(in Russia, after the monetary reform in the years before the start of the First World War, ten-ruble and five-ruble gold coins were in circulation).
The peculiarity of such money is that. that they have intrinsic value and are not subject to impairment. This means that if there is full-fledged gold money in circulation in excess of the actual need, they go out of circulation into treasure. On the contrary, with an increase in the need for circulation in cash, gold coins freely return to circulation from the treasure. Thus, gold coins are able to adapt quite flexibly to the needs of circulation without prejudice to the owners of money.
Under such conditions, there is no need for certain measures to regulate the amount of money in circulation in accordance with the needs of circulation, which is typical for paper banknotes.
However, gold money has many disadvantages:
The high cost of using gold money, which costs much more than banknotes made from paper;
The impossibility of supplying the need for circulation with gold money, since the need for money grows faster than the increase in gold production.
In connection with the above, as well as some other reasons, gold has gradually ceased to be used as a material for making money all over the world.
On the contrary, they are widely used banknotes paper, including paper money and credit money (banknotes).
During the transition from the use of full-fledged money to banknotes, first of all, credit notes exchanged for gold appeared in circulation. In the process of replacing full-fledged money with paper banknotes, the problem arose of linking the total mass of such banknotes with the needs of circulation. The significance of solving such a problem was due to the fact that when banknotes are issued in excess of the need for them, there is a threat of their depreciation, which does not happen when using gold money.
In this regard, it is significant that even small gold coins (which are also easy to lose) had a significant value, and therefore it was difficult to buy goods for a small amount. Therefore, a considerable part of the population (for example, in Russia at the end of the 19th century and at the beginning of the 20th century) preferred to use banknotes that were freely exchanged for gold.
Under such conditions, paper banknotes were constantly in circulation and were not presented for exchange for gold. This made it possible to issue some of the banknotes into circulation without their full backing with gold, since there was no need to present banknotes for exchange for gold. This opportunity was used in Russia in 1897 in the following way. The Decree of January 1, 2001 determined that the gold backing of banknotes should be at least half of the credit notes issued into circulation, if the amount of the latter does not exceed 600 million rubles; all banknotes issued in excess of this amount were to be fully backed by gold. However, this means that 300 million rubles. could be issued without gold backing. The importance of the possible release into circulation of credit money (tickets) not backed by gold is evidenced by the fact that the total mass of money in circulation (without low-grade silver and copper coins) was in the years. 1-2 billion rubles
Subsequently, in Russia and throughout the world, the process of turning banknotes into an independent kind of money continued, and at the same time, their connection with gold decreased.
Subsequently, when held in Russia in the years. monetary reform, the connection of banknotes with gold was partially preserved. This was manifested in the establishment of a fixed gold content of the monetary unit and in the provision of banknotes with gold and precious metals in the amount of 25% of the amount of banknotes put into circulation. Nevertheless, there was no free exchange of banknotes for gold - the process of separating paper banknotes from gold continued. Until 1992, Russia still retained the connection of bank notes with gold in the form of a fixed gold content of the monetary unit (ruble), but in accordance with the law of the Russian Federation of 01.01. fixed. Thus, the process of separating banknotes from gold was practically completed.
In modern conditions in Russia, gold coins of five-ruble and ten-ruble denominations (at face value) are sold, respectively, at a price much higher than the face value. This indicates the independence of the use of banknotes.
Such a process covered all countries of the world, in which the exchange of banknotes for gold was stopped everywhere and a fixed gold content of the monetary unit is not applied. This completed the transition from the use of full-fledged gold money to banknotes made of paper. Credit money (banknotes) is widely distributed in cash circulation. In circulation, paper signs are also used, which are called paper money, which differ in many respects from banknotes.
Paper money. These include such banknotes, the main feature of which is not that they are made on paper, but that they are usually issued by the state (usually the treasury) to cover their expenses. The reverse flow of paper money (treasury bills) occurs when taxes and other non-tax payments are paid. Treasury notes are obligatory for acceptance for payments, including for goods, services, etc. Treasury notes issued for circulation did not have a gold backing. Such banknotes were usually issued in our country by the treasury from the beginning of the New Economic Policy until 1925.
The most important drawback of paper money is that they enter into circulation without the necessary linkage with the needs for banknotes (to pay for goods, services and other needs). In this regard, since the issuance of paper money is due to the need for funds to cover the costs of the state (treasury), it becomes possible to issue such money into circulation excessively (compared to the need for circulation), in which it is likely that the depreciation of money, a decrease in their purchasing power.
The shortcomings inherent in paper money can be largely eliminated through the use of credit money.
loan money(banknotes). They are also made of paper, but the issuance of credit money into circulation is usually carried out by banks when performing credit operations carried out in connection with various economic processes (the formation of stocks of inventory for the period of their use, etc.). By granting a loan, the bank can issue its banknotes to the borrower: after the expiration of the term for using the loan, the funds provided are subject to return to the bank to pay off the loan debt. Part of the loan debt that has arisen is repaid when cash is received by the bank (revenue of trade organizations, etc.).
The issuance of banknotes into circulation and their withdrawal from circulation occur on the basis of credit operations performed in connection with economic processes, and not in the implementation of expenses and receipt of income by the state.
The connection between the issuance of cash from the bank's cash desks and the provision of loans, between the receipt of cash in the bank and the repayment of loan debt is manifested not in each individual loan operation, but in the total volume of operations for the provision and repayment of loans and operations for the issuance of cash and their receipts in bank cash desks.
A feature of credit money is that their release into circulation is linked to the actual needs of turnover. This involves the implementation of credit operations in connection with the actual processes of production and sale of products. The loan is issued, as a rule, secured by certain types of stocks, and the repayment of loans occurs with a decrease in the balance of values. Thanks to this, the volume of means of payment provided to borrowers can be linked with the actual need for turnover in money. This feature is the most important advantage of credit money.
If the connection with the needs of turnover is broken, credit money loses its advantages and turns into paper banknotes. This is confirmed by the modern experience of money circulation in Russia, where banknotes are put into circulation (issued).
The linking of the turnover of credit money (their issuance into circulation and withdrawal from circulation) occurs not in the implementation of each credit operation, but in their totality, in the whole national economy. If, for example, an industrial enterprise, having taken a loan from a bank and used the borrowed funds to obtain cash (to pay salaries), is not obliged to repay the loan in cash; The industrial enterprise can repay the resulting loan debt not in cash, but at the expense of non-cash receipts.
Cash can be returned to the bank's cash desk by a trading enterprise, which will deposit the proceeds used to pay off the debt that arose when obtaining a loan to pay for imported goods (on the terms of non-cash transfers).
In Russia, banknotes of the Central Bank of the Russian Federation are used in circulation. These banknotes are issued into circulation by the bank on the basis of credit operations. From the considered side, such money, it would seem, can be recognized as credit. Until 1995, the Central Bank of the Russian Federation provided a significant part of the loan to the budget, which used the loans received to cover its expenses. Therefore, such banknotes that come into circulation at the expense of loans received and are used to cover budget expenditures can rather be attributed to paper ones, given that they came into circulation to cover budget expenditures, and credit operations, on the basis of which the issue took place, are not linked with the processes of production and sale of products.
The most significant difference between such types of money as credit money (banknotes) and paper banknotes lies in the features of their release into circulation. Thus, banknotes are put into circulation in connection with credit operations carried out in conjunction with the actual processes of production and sale of products, paper money enters circulation without such linkage.
Important in their meaning and consequences of their application are non-cash money, the movement of which is recorded in the form of entries on customer accounts in the bank (the turnover occurs without banknotes). The expanding use of such money is due to a number of their advantages, which include, first of all, the reduction in the costs of cash circulation by reducing such costs as printing banknotes, their forwarding, recalculation, and protection. Of considerable importance is the prevention of the possibility of theft of banknotes, etc.
A feature of non-cash money is that transactions with their use are made in credit institutions by making entries in the accounts of participants in settlement transactions. In such operations, the turnover of cash is replaced by credit operations.
Non-cash payments are carried out in accordance with the established rules, compliance with which is controlled by credit institutions.
2.3. Non-cash money
Money of non-cash turnover is distinguished by its specificity, which should be paid attention to, especially since the terminology used does not reveal the features of such money and their turnover.
Features of non-cash cash payments are manifested in the following:
In cash settlements, the payer and the recipient are involved, transferring cash. There are three participants in non-cash cash settlements: the payer, the recipient and the bank in which such settlements are carried out in the form of entries on the accounts of the payer and the recipient;
Participants of non-cash payments are in credit relations with the bank. These relationships are manifested in the amounts of balances on the accounts of participants in such settlements. There are no such credit relations in cash circulation;
Transfers (transfers) of money belonging to one participant in settlements in favor of another are made by making entries in their accounts, as a result of which the credit relations of the bank with the participants in such operations change. In other words, a credit operation is performed here, performed with the help of money. Thus, the turnover of cash is replaced by a credit operation. This emphasizes the importance of the expedient organization of lending processes to regulate the money supply, consisting of non-cash money and cash.
Along with the widespread use of non-cash cash payments, the use of various valuable papers(obligations of enterprises and banks) to make payments without direct turnover of funds. There are common features and considerable differences between these types of settlement operations.
Unlike non-cash payments, which consist in the transfer of funds to the accounts of bank customers and are performed with the participation of the bank in each operation, there is a rather significant non-cash turnover carried out with the help of various securities (obligations of enterprises and banks).
In such operations, the turnover of cash is replaced by the movement of securities, expressing various credit relations. Such a substitution of cash turnover is characterized by features in comparison with non-cash cash payments. One of the features - in case of non-cash turnover, the participation of the bank in each settlement transaction is optional, carried out with the help of securities. So, a bill or other obligation can be used for payment, subject to an endorsement (endorsement), but without transferring money to the bank accounts of participants in operations.
Another feature is as follows. In non-cash payments, the payer's funds kept in his bank account can be used as a universal means of payment for settlements with various recipients: their consent to this is not required.
As for payment by means of securities, it can be made subject to the consent of the recipient to such payment. The possibility of consent is further complicated by the fact that when paying, for example. bill of exchange, the recipient must transfer taxes for products sold, despite the fact. that the proceeds have not yet been received.
There is one more feature. It consists in the fact that Participants in settlements with the help of securities assume a certain responsibility for the redemption of the security. So, if the bill was used for settlements between legal entities, about which there is a corresponding endorsement (endorsement), then in In the event that the drawer is unable to repay the debt, the participants in the settlement transaction shall be liable for payment of the debt under the bill. made with a bill of exchange.
Participants of non-cash payments do not assume such responsibility.
The above indicates that there are grounds for distinguishing between non-cash payments and non-cash turnover.
An important advantage of non-cash turnover performed by transferring securities is that such operations can be carried out in the absence of funds in the payer's bank account. It is this circumstance that has led to the expansion of the use of such operations in the conditions of the payment crisis existing in the Russian Federation. Thanks to non-cash circulation with the help of securities (bills, etc.), the negative consequences of the payment crisis are eliminated to a certain extent.
However, one should not, on the one hand, lose sight of the fact that settlements with the help of securities are carried out with the participation of a loan (accounting for bills of exchange, a loan against securities, etc.); on the other hand, the previously considered features of such calculations cannot be ignored.
This testifies to the expediency of a balanced approach to expanding the use of non-cash payments with the help of securities, especially since the possibility of the appearance in circulation of securities that are not related to the processes of production and turnover is not ruled out.
The expansion of the practice of non-cash payments using electronic technology has contributed to the emergence of the term "electronic money". In essence, in such transactions, non-cash cash settlements are made with the difference that instead of disposing of funds using documents drawn up on paper (orders, checks, etc.), with electronic technology, the corresponding orders are executed through electronic signals. Therefore, there are hardly any grounds for recognizing the existence of such an independent variety of money as electronic money.
In addition to non-cash cash turnover, which occurs on the basis of replacing the movement of cash with credit operations, in economic practice there are also counting money that does not circulate, but is used in mutual settlements. So, when offsetting mutual claims in the amount of the offset amount, the money of account functions, but does not circulate.
This use of money takes place and when using barter, when the cost of mutual deliveries is credited(counting money is used here) only if it is not equal, the barter transaction is completed by transferring the uncredited amount.
Despite the features inherent in non-cash money, they have many common features with cash. This manifests itself primarily in the same monetary unit of cash or non-cash money. It is also significant that between these types of money there is a close relationship, expressed in the transition of one to the other. For example, cash, when deposited into a bank account, turns into non-cash circulation money. On the contrary, when receiving cash from the bank account balance, non-cash turnover money is transferred to cash.
The manifestation of the unity of these types of money is that the regulation of the volume of non-cash money, like cash, is carried out with the help of a loan. Thus, the appearance, as well as an increase or decrease in the mass of money of non-cash circulation occur as a result of credit operations, just as it happens with the mass of cash.
2.4. Money Supply and Monetary Base
The unity of money of non-cash circulation and cash made it possible to consider them as an aggregate in the form of money supply, which is understood as the total volume of cash and money of non-cash circulation. The Federal Law “On the Central Bank of the Russian Federation” dated January 1, 2001 provides for the following: “The Bank of Russia may set growth targets for one or more indicators of the money supply ...” (Article 43).
It is important to emphasize that we are talking about the total amount of the money supply, including non-cash money and cash.
The differences between non-cash cash payments and non-cash turnover, which is carried out through the transfer of securities, is also manifested in the fact that the composition money supply in circulation securities are not included.
The money supply in circulation is characterized by the value of the monetary aggregate M2, which includes cash in circulation M0 (the amount of cash in circulation outside banks, i.e. minus balances in cash desks of banks, as well as balances in national currency on settlement, current accounts and deposits of non-financial enterprises, organizations and individuals , who are residents of the Russian Federation (this aggregate does not include deposits in foreign currency).
Relatively recently, in the Russian Federation, to characterize the amount of money supply, the indicator began to be used M2X, which, in addition to the size M2 all types of deposits in foreign currency are also included (in ruble equivalent - x). At the same time, to characterize the relative supply of money supply, the coefficient is used K2 \u003d M2X / GDP. The value of this coefficient (K2) is designed to characterize the relative security of turnover with means of payment. In the Russian Federation, the value K2 in 1995 it was 0.16, while in other (developed) countries its value reaches 0.6-1.0. This testifies to the relatively low security of the circulation of means of payment in the Russian Federation, which indirectly manifests itself in the growth of non-payments in the economy, delays in the payment of wages and pensions.
The total volume of the money supply, including its growth, is largely determined by the increase in the absolute size of bank loans. From this side, the value of the money supply in circulation is the result of monetary policy.
In the Russian Federation, the structure of the money supply is characterized by a relatively large share of cash, which in some periods reaches 35% of its total volume, which much more than in developed countries. Therefore, as non-cash payments develop, the structure of the money supply will also improve in the direction of reducing the share of cash and increasing the share of money in non-cash circulation.
To characterize the volume and terms of the money supply in the Russian Federation, we present the following data.
Money supply in the Russian Federation (trillion rubles)1
These data confirm the relatively large share of cash in the total money supply, which exceeded 37% by July 1, 1997. At the same time, the given data characterize the presence of significant savings reserves through the replacement of cash transactions with non-cash payments.
It is also important that the use of a large amount of cash is due to a significant amount of cash payments, which makes it possible to exempt some transactions from taxation. Therefore, the receipt by the budget of the income due to it contributes to the strengthening of the interest of society in the development of non-cash payments and, accordingly, in reducing the amount of cash in circulation.
There has been some recent interest monetary base, the value of which is the total:
Amounts of cash in circulation and at the cash desks of commercial banks;
Many other arguments can be cited that testify to the complexity of determining the magnitude of individual indicators included in the exchange equation, as well as to the limited significance of the relationship and interdependence between them.
In general, it turns out that there is one equation with many unknowns. In assessing the value of the equation of exchange, one should pay attention to the most important drawback, which is that changes in the amount of money in circulation have a decisive influence on the price level, while in reality price changes are due to a large extent to changes in the value of goods.
Along with the quantity theory, other views appeared on the nature, features and results of the functioning of money and their influence on the price level. Thus, the English economist A. Phillips, based on the results of the analysis, came to the conclusion about the dependence of changes in the price level not on changes in the amount of money in circulation, but on the level of employment of the population and the wages corresponding to this level. This relationship was formulated and named "Phillips Curve".
Economists who share this position recognize that an increase in employment and an increase in the level of wages is accompanied by an increase in prices, on the contrary, with a decrease in wages, prices fall. However, this means that it is not the amount of money in circulation, but the change in the level of effective demand, due to the change in the level of wages, that affects prices.
On the basis of the quantitative theory, other, sometimes contradictory, opinions of scientists about the role of money and their impact on the development of the economy arose. In this regard, two directions should be distinguished: Keynesianism and monetarism.
Both directions recognize the importance of the value of money and its impact on economic processes. In accordance with them, it is considered necessary to carry out measures to maintain the optimal amount of money in circulation.
The Keynesian and monetarist approaches differ mainly in that measures under the Keynesian approach are aimed at strengthening the role of money in stimulating demand, while under the monetarist approach they are aimed at stimulating the restriction of demand compared to the supply of goods.
Supporters Keynesians provide for the active participation of the state in regulating the amount of money in circulation and give preference to measures to expediently increase the amount of money in circulation to stimulate employment and business activity. Such measures can, under certain conditions, contribute to the growth of production, but also to the development of inflation. This implies the need for balanced measures to increase the amount of money in circulation.
A different position is typical for monetarists. Recognizing the role of money and the presence of the necessary amount in circulation, they rely on the fact that in a market economy, on the one hand, the amount of money in circulation is subject to self-regulation; on the other hand, the deterrent effect of the state on the mass of money in circulation matters. Here it is important that a reasonable decrease in the amount of money in circulation stimulates an increased interest in receiving money, and, accordingly, an increase in the supply of goods. At the same time, one cannot ignore possible difficulties with the sale of goods with a limited amount of money in circulation.
Thus, it can be concluded that common to the consideration of the theory of money is the recognition of the role of money in the development of the economy and the need to regulate the amount of money in circulation. However, differences in the interpretations of Keynesian and monetarist approaches lead to the recommendations of different measures to regulate the amount of money in circulation in order to stimulate uninterrupted growth in the volume of production and sales of goods. None of the recommendations can be given preference.
This necessitates the development and implementation of a sound monetary policy, which may vary depending on the characteristics and tasks of economic development in different periods.
3.3. Features of the manifestation of the role of money in different models of the economy
The role of money is subject to change due to the characteristics of the functioning of the economy. Features of the manifestation of the role of money in different models of the economy are noticeable in all aspects of the use of money.
Under the administrative-command economy that existed until recently in Russia, the role of money was limited. This was facilitated by the prevailing views on the possible complete abolition of money and the transition to direct product exchange. Money was assigned a supporting role, mainly as an instrument of accounting and control by the central and other economic management bodies.
Under the conditions of the administrative-command economy, the volume and range of products produced were established by higher authorities for each enterprise in the form of plans in physical and cost terms. At the same time, the cost indicators of the planned volume and range of products were of subordinate importance and were calculated on the basis of physical indicators, based, as a rule, on the prices set by the central authorities.
Manufactured products were distributed among consumers in physical units by funds and orders, on the basis of which contracts were concluded between the participants in the processes of product sales, providing for the obligations of the parties to sell and purchase products in physical and cost terms. Cost indicators were determined depending on the data on the supply of products in natural units using established prices.
When selling products, money and monetary settlements were assigned a subordinate importance. The role of money in such conditions was reduced to their use as an auxiliary tool for accounting and control.
In the administrative-command economy, the role of money is reduced, which is associated with the use of stable prices established by the central authorities. Such prices remained unchanged even at different ratios of supply and demand for goods and continued to be applied when there was a shortage of goods and their normalized distribution.
However, in such a situation, “repressed inflation” arose, accompanied by a decrease in the role of money, since for the purchase of goods it was not so important that the buyer had money, but the possibility of obtaining them in accordance with established norms was important.
At the same time, the use of money was of no small importance in the administrative-command economy. Thus, only with the use of money did it become possible to determine the total amount of various costs (materials, depreciation, wages, etc.) for the manufacture of products that make up its cost. Comparison of the planned and actual cost levels made it possible to assess the deviations of the actual level from the planned one and take measures to normalize it, which would have been impossible without the use of money.
In the same way, it is only with the help of money that it becomes possible to bring together (in monetary terms) the volumes of various types of products and obtain a generalized indicator of their total volume. The use of money makes it possible to evaluate the implementation of the plan in terms of the total volume of production and develop measures to improve the implementation of the plan.
The use of money also strengthened the possibility of accounting for and monitoring the implementation of various planned natural indicators and the determination of measures to improve the activities of enterprises in the conditions of an administrative-command economy.
Nevertheless, the real role of money in such an economy should not be overestimated, since, despite the fact that their use increases the possibilities of accounting and control, this does not allow money to be given an independent and even more important role in the functioning of the economy. Here the role of money remains subordinate.
In a market economy, the role of money increases significantly, which is facilitated by the creation and use of the prerequisites characteristic of the new conditions of economic activity.
The transition from an administrative-command to a market economy included various significant changes, including in the forms of ownership of tools and objects of labor, in the production and sale of products, which served as a prerequisite for creating new conditions for managing production processes and sales of products.
In a market economy, commodity producers operating on the basis of various forms of ownership (state, cooperative, private) acquire independence in establishing the volume and range of manufactured and sold products. This is no longer hindered by planned indicators, which were previously set by higher authorities. Under the new conditions, the possibilities of showing initiative in economic activity are increasing.
At the same time, the role of money is enhanced, with the help of which such a benchmark as effective demand can be assessed: taking it into account, the volume and range of manufactured and sold products are formed. At the same time, considerations of the profitability of certain areas of production and economic activity are taken into account, which involve taking into account the level of prices for manufactured and sold goods and the level of costs for their production.
The increase in the role of money in a market economy is also taking place in the retail trade, in which distribution according to norms, cards, coupons has been abolished, and money becomes decisive in determining the possibility of buying goods.
In the noted aspects of activity and in determining its results in the form of profit, money also plays a significant role.
The specifics of the enterprise's activity does not mean that there is no centralized regulation in a market economy. It is carried out not with the help of administrative, but mainly economic methods.
Features of the manifestation of the role of money in various models of the economy are:
Impact on business improvement;
Strengthening the interest of various sectors of the economy in the development of production, primarily with the help of reasonable pricing, stimulating the growth of production volume and reducing the costs of its manufacture;
Creating a regime of dependence of cash expenditures on cash receipts, which increases the interest of workers, enterprises, state bodies in increasing cash receipts as a result of increased production and economical use of resources;
The implementation in the process of money circulation of control over prices, volume and quality of supplied products, designed to contribute to a more complete satisfaction of needs.
The effectiveness of the use of money implies the use of a stable monetary unit, which strengthens the desire to overcome such negative processes as inflation.
Questions for self-control
1. What characterizes the role of money?
2. What is the role of money in the development and improvement of production efficiency, the activation of citizens' activities, the performance of state functions?
3. What are the features of the role of money in foreign trade turnover?
4. What are the features and disadvantages of the equation of exchange?
5. What are the features of various theories of money?
6. What are the features of the use of money in the administrative-command economy?
7. What is the increasing role of money in a market economy?
CHAPTER 4
EMISSION AND RELEASE OF MONEY INTO ECONOMIC TURNOVER
4.1. The concepts of "issue of money" and "issue of money". Issue forms
Money in the economic circulation in the market conditions has always existed and has always existed. New money comes into circulation from banks that create it as a result of credit operations. That is why the credit nature of money emission is one of the fundamental principles of the organization of the state's monetary system.
The concepts of "issue of money" and "issue of money" are not equivalent. Issue of money into circulation happens all the time. Non-cash money is put into circulation when commercial banks provide loans to their clients. Cash is released into circulation when banks, in the process of carrying out cash transactions, issue them to customers from their operating cash desks. However, at the same time, customers repay bank loans and hand over cash to the operating cash desks of banks. At the same time, the amount of money in circulation may not increase.
Emission is understood as such release of money into circulation, which leads to a general increase in the money supply in circulation. There is an issue of non-cash and cash money (the latter is called the issue of money into circulation).
In the conditions of an administrative-distributive economy (like the former USSR), both issues, as a rule, were carried out by the State Bank. In a market economy, the emission function is divided: the emission of non-cash money is carried out by the system of commercial banks, the emission of cash - by the state central bank. Wherein primary issue of non-cash money. Before cash appears in circulation, it must be reflected in the form of entries in the deposit accounts of commercial banks.
home purpose of the issue non-cash money in circulation - meeting the additional needs of enterprises in working capital. Commercial banks meet this need by providing loans to enterprises. However, banks can issue loans only within the limits of their available resources, i.e., those funds that they have mobilized in the form of equity capital and funds in deposit accounts. These resources can only satisfy ordinary, and not additional need farms in working capital. Meanwhile, either in connection with the growth of production, or in connection with the rise in prices for goods, an additional need for money constantly arises for the economy and the population. Therefore, there must be a mechanism for issuing non-cash money that satisfies this additional need.
In the conditions of countries with an administrative-distribution system of the economy, the issue of non-cash money was carried out on the basis of credit plans, by expanding the loans provided in accordance with them.
In countries with a market economy model, when the monopoly on emissions is destroyed, the operation of such a mechanism becomes impossible.
4.2. The essence and mechanism of the banking multiplier
With the existence of a two-tier banking system, the emission mechanism operates on the basis of a banking (credit, deposit) multiplier.
The bank multiplier is the process of increasing (multiplication) of money in the deposit accounts of commercial banks during their movement from one commercial bank to another. Banking, credit and deposit multipliers characterize the multiplication mechanism from different perspectives.
The banking multiplier characterizes the process of animation from the standpoint of the subjects of animation. Here the answer to the question is given: who multiplies money? This process is carried out by commercial banks. One commercial bank cannot multiply money, it is multiplied by the system of commercial banks.
The credit multiplier reveals the engine of the multiplication process, the fact that multiplication can be carried out only as a result of lending to the economy.
The deposit multiplier reflects the object of animation - money on deposit accounts of commercial banks (it is they who increase in the process of multiplication).
How does the bank multiplier mechanism work? This mechanism can exist only in conditions of two-level (or more) banking systems, and the first level - the central bank manages this mechanism, the second level - the commercial bank forces it to operate, and to act automatically, regardless of the desire of the specialists of individual banks. The bank multiplier mechanism is directly related to the free reserve.
Free reserve is a set of resources of commercial banks, which at a given time can be used for active banking operations.
This concept came to Russia from Western economic literature. It should be noted that it is not entirely accurate. In fact, free (operational) reserves of commercial banks are their liquid assets, but the definition shows that this concept refers to resources, i.e., liabilities of commercial banks.
This concept is based on the fact that commercial banks can carry out their active operations (issue loans, buy securities, currency, etc.) only within the limits of their available resources. The free reserve of the system of commercial banks is made up of the free reserves of individual commercial banks, therefore, from an increase or decrease in the free reserves of individual banks, the total amount of the free reserve of the entire system of commercial banks does not change. The amount of free reserve of an individual commercial bank
Wed = K+ PR + CC ± MBK - OCR-A0 ,
where TO - capital of a commercial bank;
ETC - attracted resources of a commercial bank (funds on deposit accounts);
Central Committee - centralized credit granted to a commercial bank by a central bank;
MBK - interbank loan;
OCR - deductions to the centralized reserve, which is at the disposal of the central bank;
A0 - resources that are currently already invested in the active operations of a commercial bank.
Consider the mechanism of the bank multiplier using a conditional example (Fig. 4.1, the amount of credit and deductions are given in million rubles), and for simplicity, we will make three assumptions:
Commercial banks currently do not have free reserves;
Each bank has only two clients;
Banks use their resources only for lending operations.
Client 1 needs a loan to pay for supplies from customer 2, but the bank 1 cannot give him a loan, because he does not have a free reserve. Bank 1 appeals to the central bank and receives from it a centralized loan in the amount of 10 million rubles. It forms a free reserve, due to which a loan is issued to the client 1.
Client 1 from his current account pays for the delivery to the client 2 . As a result, the free reserve in the bank 1 exhausted, but there is a free reserve in the bank 2 because the client 2 keeps its current account in this bank, and attracted resources (PR) of this bank increase (see formula).
Part of the bank's free reserve 2 placed at the disposal of the central bank in the form of contributions to the centralized reserve (OCR). We conditionally accept the rate of such deductions in the amount of 20% of the attracted resources. The remaining part (8 million rubles) of the free reserve is used to provide a loan in the amount of 8 million rubles. client 3.
Client 3 pays off this loan with the client 4, serviced by a commercial bank 3. Thus, this bank already has a free reserve, while the bank 2 he disappears. Bank 3 part of the free reserve of 1.6 million rubles. (twenty % ETC) deducts to the centralized reserve, and the rest - 6.4 million rubles. used to make a loan to a customer 5. At the same time, the money in the client's current account 4 remain intact.
Client 5 through a loan from a bank 3, pays off the client 6, transferring them to his current account opened in the bank 4. From here to the bank 3 free reserve disappears: in the bank 4 - arises. Again, 20% of this reserve (1.3 million rubles) is allocated to the centralized reserve, the rest is used to issue a loan in the amount of 5.1 million rubles. to client 7, who repays the client with this loan 8, whose current account is in a commercial bank 5.
Free reserve of a commercial bank 4 disappears (although the funds on the current account of the client 6 remain unspent), it appears at the commercial bank 5. In turn, this bank is part of its free reserve - 1 million rubles. (twenty% ETC) leaves the central bank in the form of deductions to the centralized reserve, and uses the rest (4.1 million rubles) to issue a loan to client 9. Then the process continues until the free reserve is completely exhausted, which, as a result, is accumulated in the central bank due to deductions to the centralized reserve. bank and reaches the size of the initial free reserve (10 million rubles in bank 1).
In accordance with the scheme, money in the settlement accounts of customers 2, 4, 6, 8 etc. (of all even-numbered clients) remain untouched and therefore the total amount of money on the settlement (deposit) accounts will ultimately be a value many times greater than the initial deposit - 10 million rubles, formed when the loan was issued to client 1. However, the money on deposit accounts can increase no more than 5 times, since the value of the multiplication factor, which is the ratio of the money supply formed on deposit accounts to the value of the initial deposit, is inversely proportional to the rate of deductions to the centralized reserve.
Thus, if the rate of contributions to the centralized reserve is 20%, then the multiplier will be 5 (1/20 x 100). It will never reach 5, because a part of the free reserve is always used for other, non-credit transactions (for example, there must be cash in the cash desk of any bank for cash transactions).
Since the multiplication process is continuous, the multiplication factor is calculated for a certain period of time (a year) and characterizes how much the money supply in circulation has increased over this period of time.
The bank multiplier works regardless of whether loans are provided to commercial banks or they are provided to the federal government. In this case, the money will go to budget accounts in commercial banks, and they also relate to attracted resources. (ETC), therefore, the free reserve of commercial banks, where these accounts are located, will increase (see the formula) and the bank multiplier mechanism will turn on.
The bank multiplier mechanism will work not only from the provision of centralized loans. It can also be involved in the case when the central bank buys securities or currency from commercial banks. As a result of this, the resources of banks invested in active operations decrease, and the free reserves of these banks used for credit operations increase, i.e., the mechanism of bank multiplication is turned on. The central bank can also turn on this mechanism when it reduces the rate of contributions to the centralized reserve. In this case, the free reserve of the commercial banking system will also increase, which, other things being equal, will lead to an increase in lending and the inclusion of a bank multiplier.
Management of the mechanism of the bank multiplier, therefore, the emission of non-cash money is carried out exclusively by the central bank, while the emission is carried out by the system of commercial banks. The Central Bank, controlling the mechanism of the bank multiplier, expands or narrows the issuing capacity of commercial banks, thereby performing one of its main functions - the function of monetary regulation.
4.3. Issue of cash
The issue of cash is their release into circulation, in which the amount of cash in circulation increases.
The monopoly on the issue of cash belongs to the state central bank. Previously, under the administrative-distributive system, the amount of emission served as an object of directive planning by the state and could not be exceeded in any case. In a market economy, directive planning does not exist, however central banks predict the size of the proposed issue, using forecasts of cash turnover of commercial banks and our own analytical materials. At the same time, it is important not only to establish the optimal predicted emission value, but also its distribution over individual regions of the country.
The issue of cash is carried out in a decentralized manner. This is due to the fact that the need of commercial banks (it determines the size of the issue) in cash depends on the need for them of legal entities and individuals served by these banks, and it is constantly changing. Therefore, every time to import money from the Center to satisfy this need, it would not only be inappropriate (because of the multiply increasing circulation costs), but also impossible.
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Yuryev-Polsky College of Finance and Economics - branch of the federal state
educational budgetary institution of higher professional education
"Financial University under the Government of the Russian Federation"
LECTURE NOTES
by discipline
"Finance, money circulation and credit"
Section 1. Money
1.2 Money circulation and characteristics of the total money turnover
Section 2 Finance
2.2 State budget and functions of the treasury
2.3 Taxes and their functions
2.4 Off-budget funds
2.5 Insurance
Section 3. Credit and banks
3.1 Essence, functions and forms of credit
3.2 The banking system of the Russian Federation
3.4 Bank profit and liquidity
3.5 Central Bank of Russia
3.6 Monetary policy. Monetary Policy Instruments
Section 4. Evolution of monetary circulation and the banking system of Russia
4.1 Development of banking in Russia since 1917
Section 5. Securities and the stock market
5.1 The securities market, its meaning, basic concepts. Securities
5.2 Securities Market Participants
5.3 Stock exchange, organization of barge activities
Section 6. Specialized financial institutions
6.1 Insurance companies, investment funds, savings institutions, companies and banks
6.2 Financial companies, financial and industrial groups, credit partnerships, credit unions
Section 1. Money
History of money
Money as a social relation, that is, a connection in society, historically appears before finance. The appearance of money is caused by the social division of labor and the development of exchange. The emergence of such social relations as finance is associated with the formation of the state. In the early stages of the development of the exchange of money - the universal equivalent - was the commodity most in demand in a given area. In countries where there were deposits of gold and silver, it was these metals that began to be used in antiquity as money. So, clay tablets found in the ruins of the city of Ur (Mesopotamia) contain information that almost 3.5 thousand years BC. e. silver was money. In the 19th century lagging behind the extraction of precious metals from the needs of the growing trade turnover in means of payment led to the spread of paper money issued by governments, as well as credit money issued by banks. After the First World War (1914-1918), the entire money turnover was made up of paper-credit money supply. Thus, the development of money has gone from commodity money to so-called fiat money with a purchasing power established by the state. Traditional money was defined as a commodity, spontaneously selected from the world of goods for the role of a universal equivalent. However, it is very difficult to define modern fiat money. They tried to express their essence in different formulations. For example, "Money is what it does." Or: "Money is the repository of purchasing power." It is unlikely that such definitions can be considered successful. In order to correctly say what money is, it is necessary to pay attention to the following circumstance. Money, as you know, has four functions: a measure of value; medium of exchange; means of accumulation; instrument of payment. But it is very difficult to give a formulation that unites all these functions. After all, money is banknotes, numbers in a savings book, and electronic codes of a credit card. In the doctrine of money at the beginning of the XIX century. two main trends emerged. The first, predominant, argued that only gold can be valuable money, and paper money is a substitute for gold. The suspension of the exchange of paper money for precious metal, according to representatives of this direction, could only be temporary. Such views were shared by A. Smith, D. Ricardo, J. Mill, K. Marx. This direction had many supporters in the twentieth century. For its representatives, the collapse of the gold circulation in England, France and Germany after the First World War and the final abolition of the gold content of the dollar in 1971 were a complete surprise. However, there was another theoretical direction, which argued that paper money could be in circulation without a gold base. In 1923, in his "Treatise on Monetary Reform," J. Keynes wrote that "the gold standard is only a barbaric relic of the past." Under the Minister of Finance, S.Yu. Witte, the Russian government headed for the introduction of the gold currency. This was motivated by the fact that in the conditions of paper money it is impossible to ensure the stability of the ruble exchange rate against foreign currencies.
Thus, the development of exchange leads to the appearance of an equivalent commodity. In a later historical period, the process of formation of state principles takes place.
For the material support of state administration, the rulers begin to levy taxes from their subjects. The income generated from them is spent on certain purposes: the construction of defensive structures, the maintenance of troops, judges, etc. Funds for subsequent spending begin to form from the money collected in the form of taxes. They make up the public finances. Thus, in the definition of finance, the word "funds" becomes the key word.
Individuals and their associations also form their own monetary funds. This is how the finances of economic entities-organizations appear, as well as the finances of households.
Money: essence, evolution, types and functions
Money is one of the main inventions of mankind, comparable to the invention of writing, electricity, electronic means of communication (the World Wide Web). The entire modern global world economy has the main characteristic - monetary. The evolution of individual private, regional, national economies to the modern global world market is a long process spanning almost five millennia. Money appeared as a result of similar economic processes almost simultaneously in all civilized human societies (Ancient Egypt, the Babylonian kingdom, Ancient Greece and Rome, etc.). Consequently, money has an objective economic essence, it is universal and absolutely necessary in the process of exchange, which is impossible without property relations.
There are two concepts of the origin of money:
The first is the origin of money as a result of an agreement between people who are convinced that special intermediaries are necessary for the movement of values ​​in exchange.
The second is that money appeared as a result of an evolutionary process, which, regardless of the will of people, led to the fact that some objects stood out from the general mass and took a special place as an intermediary in the act of exchange.
Essence of money
In accordance with the concept, the essence of money is also determined. According to the rationalist concept, money is an artificial social convention, a product of the rule of law, an experimental theoretical construct. The evolutionary concept of essence is based on the commodity nature of money, from which it follows that money is a special commodity serving as a universal equivalent.
According to the evolutionary theory, money appeared as a result of the development of commodity circulation.
The evolution of the exchange of goods presupposes the development of forms of value:
Simple (random);
deployed;
Universal;
Monetary.
To turn a commodity into money, you must:
a) general recognition of the role of the universal equivalent for this product;
b) long-term fulfillment by this product of the role of a general equivalent;
c) the presence of special physical properties suitable for constant exchangeability.
Money properties:
Money provides universal immediate exchangeability. They buy any product.
Money expresses the exchange value of a commodity.
Money is the materialization of the universal socially necessary labor time contained in the commodity.
Since money has two properties - value and use value - we can talk about the following.
The origin of money is due to the fact that every commodity has a use value and values ​​that are in contradictory unity with each other. At the same time, use value characterizes the material properties of the product that allow satisfying the corresponding needs, and value characterizes the social property of the product as part of social wealth. Use and exchange values ​​exist as a unity of opposites. Exchange value is a property of use value, its ability to be exchanged for other use values, that is, the amount of use value that an individual or an organized group of people (corporation) is willing to exchange for a corresponding amount of other use value.
Since value is a social relation, it cannot exist by itself in a physical, material form. Its public character requires expression in a socially acceptable and recognized form. In order for value to be adequately represented as a social relation, some substance is needed that will take over this function. This substance is money.
Prerequisites for the emergence of money:
Transition from a subsistence economy to the production and exchange of goods;
The emergence of owners producing products for sale;
Compliance with equivalence.
With the advent of money, conditions are created for the emergence and then expansion of the market, since the money equivalent makes it possible to simplify the exchange of goods for goods.
A single act of exchange is divided into 2 stages:
Stage 1: Goods - Money
Stage 2: Money - Goods
Money acquires independent movement.
Exchange is the movement of goods from one producer to another. It involves the comparison of goods that are different in type, quality and purpose. The basis for measuring goods is their cost.
Money is a commodity that spontaneously emerged in the process of the historical development of commodity production and exchange.
Money is a special privileged commodity that plays the role of a universal equivalent.
Money is a mechanism that has resolved the contradictions between value and use value.
Functions of money
The function of money as a measure of value
Money as a universal equivalent measures the value of all goods. What makes all commodities commensurable is the socially necessary labor expended in their production.
The value of a commodity expressed in money is called the price. To compare the prices of goods of different value, it is necessary to reduce them to the same scale, i.e. express them in the same currency. The scale of prices in metallic circulation is the weighted amount of money metal, accepted in a given country as a monetary unit and serving to measure the prices of all other commodities. Initially, the weight content of the monetary unit coincided with the scale of prices, which was reflected in the names of some monetary units. So, the English pound sterling really weighed a pound of silver
2. The function of money as a medium of exchange
In direct commodity exchange (goods for goods), purchase and sale coincided in time and there was no gap between them. Commodity circulation includes two independent acts separated in time and space. The role of an intermediary that allows to bridge the gap in time and space and ensure the continuity of the production process is played by money.
The features of money as a means of circulation include the real presence of money in circulation and the short duration of their participation in the exchange. In this regard, the function of circulation can be performed by defective money - paper and credit.
3. The function of money as a means of accumulation and savings
Money, providing its owner with the receipt of any product, becomes the universal embodiment of social wealth. So, people have a desire to save them.
In the case of metallic circulation, this function of money served as a spontaneous regulator of money circulation: excess money went into treasures, the lack was filled from treasures.
Under conditions of expanded commodity reproduction, the accumulation (i.e., accumulation and saving) of temporarily free cash is a necessary condition for the turnover of capital. The creation of monetary reserves smooths out the unevenness and peculiarities of economic life.
On a state scale, the creation of a gold reserve was required. In connection with the withdrawal of gold from circulation, the value of the gold reserve indicates the wealth of the country and ensures the confidence of residents and non-residents in the national currency.
4. The function of money as a means of payment
Money as a means of payment has a specific movement pattern (C-DO-C) not related to the oncoming movement of goods: goods - a term debt obligation - money.
5. Function of world money
In the role of world money, it functions as a universal means of payment, a universal means of purchase, and a universal materialization of social wealth.
World money was gold as a means of regulating the balance of payments and credit money of individual states, exchanged for gold: mainly the US dollar and the British pound sterling.
In this case, the money is:
A universal means of purchase when paying for goods imported into one country from another;
A universal means of payment when repaying international debt obligations, when paying interest on foreign loans and other obligations;
The general embodiment of social wealth when transferring money from one country to another for placing it in foreign banks, providing loans, etc. The transfer of wealth also occurs when gold, on the run from socio-economic conflicts, inflation, from the threat of defeat in a war, rushes to banks other countries.
Types of money
Money in its development acted in 2 forms:
Real money;
Signs of value (substitutes).
Real money is money in which the nominal value (the value indicated on them) corresponds to the real value, i.e. the cost of the metal from which they are made and taking into account the cost of production. Metal money (copper, silver, gold) had a different form: first piece, then weight. The coin of the later development of monetary circulation had distinctive features established by law (appearance, weight content). The most convenient for circulation turned out to be the round shape of the coin (it was less erased), the front side of which was called the obverse, the back - the reverse and the edge - the edge. In order to prevent the coin from spoiling, the edge was made rifled.
The first coins appeared almost 26 centuries ago in ancient China and the ancient Lydian state. In Kievan Rus, the first minted coins date back to the 9th - 10th centuries. Initially, zlatniki (gold coins) and srebreniki (silver coins) were in circulation at the same time.
The countries switched to gold circulation in the second half of the 19th century. The leading of these countries was Great Britain, which, together with its colonies and dominions, occupied the first place in gold mining. The reasons for the transition to metallic circulation, and above all to gold, were the properties of the noble metal, which makes it most suitable for fulfilling the purpose of money: uniformity in quality, divisibility and connectability without loss of properties, portability (high concentration of value), storability, complexity of mining and processing.
The peculiarity of such money is that it has its own value and is not subject to depreciation. This means that if there is full-fledged gold money in circulation in excess of the actual need, they go out of circulation into treasure. On the contrary, with an increase in the need for circulation in cash, gold coins freely return to circulation from the treasure. Thus, gold coins are able to adapt quite flexibly to the needs of circulation without prejudice to the owners of money.
Under such conditions, there is no need for certain measures to regulate the amount of money in circulation in accordance with the needs of circulation, which is typical for paper banknotes.
However, gold money has many disadvantages: 1. Gold mining did not keep pace with the production of goods and did not provide the full need for money;
2. Gold money of high portability could not serve a turnover of small value;
3. Due to objectivity, gold circulation did not have economic elasticity; rapidly expand and contract;
4. The gold standard as a whole did not stimulate production and trade.
In connection with the above, as well as some other reasons, gold has gradually ceased to be used as a material for making money all over the world. On the contrary, substitutes for real money or signs of value began to be widely used.
Substitutes for real money (signs of value) - money, the nominal value of which does not correspond to the real one, i.e. of the social labor spent on their production. These include: - metal signs of value (worn gold coins and billon coins, i.e. small coins made of copper and aluminum); paper denominations, usually made of paper. Distinguish between paper money and credit money.
Paper money appeared as a substitute for the gold coins in circulation. In Russia, since 1769, the right to issue paper money belongs to the state. The difference between the nominal value of issued money and the value of their issue forms the share premium of the treasury, which is an essential element of government revenues. Excessive issuance of money to cover the budget deficit leads to their depreciation. Paper money has two functions: a medium of exchange and a means of payment. They are usually indestructible for gold and endowed by the state with a forced exchange rate.
Credit money. Their appearance is associated with the function of money as a means of payment, where money is an obligation that must be repaid after a specified period of time with real money. Credit money has gone through the following development path: bill, accepted bill, banknote, check, electronic money, credit cards
A bill of exchange is a written unconditional obligation of the debtor to pay a certain amount at a predetermined date and place. In the USSR, bills of exchange were used in domestic circulation from 1922 to 1930. and from 1991 to the present. Distinguish between a promissory note and a bill of exchange, the difference between which is that the payer for a promissory note is the person who issued the bill, and for a transferable one - some third party. Treasury bills are bills issued by the government to cover budget deficits and cash gaps. A commercial bill is a bill issued on the security of goods. A bank bill is a bill of exchange issued by a bank to its client.
A banknote is a perpetual debt obligation secured by a guarantee of the central (issuing) bank of the country. Initially, banknotes had a gold guarantee, which ensured their exchange for gold. Banknotes are issued in a strictly defined denomination, and in essence they are national money throughout the state. In the Russian Federation, the issuer of banknotes is the Central Bank of Russia.
Check - a monetary document of the established form, containing an unconditional order of the account holder in a credit institution to pay a certain amount to the holder of the check. Checks first appeared in the 16th-17th centuries. in the UK and Holland. There are three main types of checks: nominal - for a specific person without the right to transfer; bearer - without indicating the name of the recipient; order - for a certain person, but with the right of transfer by endorsement. In accordance with the “Regulations on Checks” of 1929, there is also a distinction: settlement checks are a written instruction to the bank to make a cash payment from the account of the drawer to the account of the holder of the check, i.e. employees for non-cash payments; cash checks - checks intended for receiving cash from credit institutions.
On March 1, 1992, a new “Regulation on checks” was adopted, which determines the procedure for check circulation in the country.
With the help of electronic money, i.e. on the basis of paperless media in the form of electronic signals, the vast majority of interbank transactions are carried out.
The role of money in modern conditions
In a modern market economy, all goods, services, natural resources, as well as the ability of people to work, acquire a monetary form. The qualitatively new role of money, in contrast to the money of simple commodity production, lies in its transformation into money capital, or self-increasing value. The new role of money can be traced through five previous functions.
Thus, in the first function, money not only measures the value of all goods and services, it also measures the value of capital.
When buying and selling various valuables for cash, money acts as a means of circulation of both goods and capital. Money as a means of accumulation and savings is concentrated in the credit system and provides the owner with a profit, and accumulation in the form of the thesaurus of gold (bars and coins as treasure) protects monetary wealth from depreciation.
Money serves a variety of payment relations, including labor relations. This function basically ensured the widespread development of the credit system. Functioning in the world market, money provides the flow of capital between countries. They also serve the production and sale of social capital through the system of cash flows between the sectors of the economy, industries and regions of the country. And these flows are organized by the state, business entities and, to some extent, individuals, while the turnover of the value of the social product begins and ends with the owner of the capital.
In modern market conditions, the effectiveness of the use of a currency largely depends on the stability of its monetary unit, that is, on the constancy of the exchange rate and the presence of a tendency to increase it.
The concept of the monetary system
The monetary system is a historically established form of organization of monetary circulation in the country, enshrined in national legislation.
There are two types of monetary systems: systems of metallic circulation and systems of circulation of banknotes, when gold and silver are forced out of circulation by credit and paper money that cannot be exchanged for them. Systems of metallic money circulation, in turn, are divided into bimetallic and monometallic systems. Bimetallic - these are monetary systems in which the state legislates the role of the universal equivalent (i.e. money) for two noble metals gold and silver. At the same time, free minting of coins from. These metals and their unlimited circulation. Under monometallism, the universal equivalent is one monetary metal (gold or silver). At the same time, other banknotes function in monetary circulation: banknotes, treasury notes, and change coins. These banknotes are freely exchanged for monetary metal (gold or silver).
The most widespread in the world is gold monometallism. There are three types of gold monometallism: gold coin, gold bullion and gold trade standards.
Under gold-coin monometallism (which existed in Russia until 1914-1918), the prices of goods are calculated in gold, full-fledged gold coins function in the internal circulation of the country, and gold performs all the functions of money. Free minting of gold coins is carried out; all banknotes (banknotes, change coins) are freely exchanged for gold; free export and import of gold is allowed, and the functioning of free markets for gold. After the First World War, instead of gold coin monometallism, gold bullion and gold exchange (gold motto) types of monometallism were established. Under the gold bullion standard, the exchange of banknotes and other money is carried out only for ingots weighing 12.5 kg; under gold exchange - the exchange of banknotes and other money began to be carried out for the currency of the mottos of countries where exchange for gold bars was allowed.
After 1929-1933 all forms of gold monometallism were eliminated, and after World War II, at a conference in Bretton Woods (USA) in 1944, the so-called Bretton Woods monetary system was formalized, characterized by the following features: gold is being squeezed out of free circulation and acts only as a means of final settlement between countries; along with gold, the dollar (USA) and the pound sterling (Great Britain) act as an international means and reserve currency; only reserve currencies are exchanged for gold according to the established ratio, as well as in free gold markets; interstate regulation of currency relations is carried out by the IMF (International Monetary Fund). The Bretton Woods monetary system was a system of international gold exchange monometallism based on the dollar.
In the 70s. 20th century in connection with the Reduction of gold reserves in the US, this system has collapsed. In 1976 the Bretton Woods monetary system was replaced by the Jamaican monetary system, formalized by the Agreement of the countries - members of the IMF (Jamaica) in 1976. and ratified by countries - members of the IMF in 1978.
Under the Jamaican monetary system, SDRs were declared world money and became an international unit. At the same time, the dollar retained an important place in international settlements and foreign exchange reserves of other countries. In addition, the demonetization of gold was legally completed, that is, the loss of monetary functions by gold. At the same time, gold remains a state reserve; it is necessary to purchase the currency of other countries. There is currently no metal circulation in any country; the main types of banknotes are credit bank notes (banknotes), state money (treasury notes).
The official currency of Russia is the ruble. The official exchange rate of the ruble against foreign currencies is determined by the Central Bank and published in the press. On the territory of Russia, cash (banknotes and coins) and non-cash money (in the form of funds in accounts with credit institutions) function. The Bank of Russia has the exclusive right to issue cash, organize their circulation and withdrawal on the territory of Russia.
Principles of organization of modern monetary systems
The principles of organization of the monetary system depend on other elements of the basic (fundamental) block of the monetary system. The main principles of the organization of the monetary system include the following.
1. The principle of stability and elasticity of money turnover: the monetary system must meet the needs of the economy in cash, but not allow the development of inflationary processes. The Central Bank ultimately assumes the obligation to regulate non-cash issuance in accordance with the needs of economic turnover, as well as to link the issue of banknotes with the process of production and exchange of goods and services or the obligation not to issue such a quantity of banknotes that the owners of goods, performers of works and services do not agree to exchange their own assets. The need to service the turnover actually means that new issues of cash can be carried out either to replace physically worn out banknotes, or to increase national wealth.
2. The procedure and types of security for banknotes established by the legislation, on the basis of which it is determined what can serve as security for the issue of banknotes. These can be inventory items, gold or other precious metals, currency values, securities, insurance policies, guarantees from the government, banks, etc. Today, in all countries, the issue of banknotes is secured by central bank assets.
Inflation
Inflation is the overflow of financial channels with paper money, which leads to their depreciation.
Inflation is a monetary phenomenon, but it is not limited to the depreciation of money. It penetrates into all spheres of economic life and begins to destroy these spheres. The state, production, the financial market suffer from it, but people suffer the most. During inflation:
1. Depreciation of money in relation to gold;
2. Depreciation of money in relation to the product;
3. Depreciation of money in relation to foreign currency.
We can read another definition of inflation in modern American textbooks.
Inflation is an increase in the general price level. This does not mean, of course, that all prices necessarily rise, even during periods of fairly rapid inflation, some prices may remain relatively stable while others fall. One of the main sore spots is that prices tend to rise very unevenly. Some bounce, others rise at a more moderate pace, and still others don't rise at all. Inflation is measured using a price index. Recall that the price index determines their general level in relation to the base period. The inflation rate for a given year can be calculated as follows: subtract last year's price index from this year's price index, divide that difference by last year's index, and then multiply by 100%.
In order for the economy not to experience inflationary crises:
1. There must be a constant balance of the state budget;
2. The central bank should pursue an ideal policy;
3. The state should not interfere in the distribution of income;
4. The country should be inhabited by citizens with a healthy market psychology, people deprived of inflationary expectations.
1.2 Money circulation and characteristics of the total money turnover
Cash
Cash turnover includes the movement of the entire cash supply for a certain period of time between the population and legal entities, between individuals, between legal entities, between the population and government agencies, between legal entities and government agencies.
Cash flow is carried out with the help of various types of money: banknotes, metal coins, paper money (treasury bills). The issue of cash is carried out by the central bank (usually the state). It issues cash into circulation and withdraws it if it has become unusable, and also replaces money with new samples of banknotes and coins.
Cash is used:
for the circulation of goods and services;
for settlements not directly related to the movement of goods and services, namely: settlements for the payment of wages, bonuses, benefits; on payment of insurance indemnities under insurance contracts; when paying for securities and paying income on them; on payments of the population for utilities, etc.
Cash is the currency of one of the countries in any physical representation of a particular individual or legal entity.
An example of physical representations would be banknotes and coins. Cash is inconvenient in that it cannot be paid remotely (for example, on the Internet), for this you need to use electronic money or non-cash payment, but it is very convenient when you need to pay something confidentially.
Non-cash money turnover is the movement of value without the participation of cash by transferring funds to the accounts of credit institutions, as well as offsetting mutual claims.
Non-cash payments are carried out on the basis of settlement documents in the form established by the Central Bank and in compliance with the relevant document flow. Non-cash turnover is realized through appropriate methods of organization of non-cash payments.
Depending on the method of payment, the type of settlement documents and the organization of workflow in a bank, the following main forms of non-cash payments between payers and recipients can be distinguished: settlements by payment orders, letters of credit, checks, collections, payment cards.
The basis of non-cash payments are interbank settlements. Settlements between banks in Russia are made, as already noted, through cash settlement centers created by the Central Bank of the Russian Federation. Banking operations for settlements can also be carried out on correspondent accounts of banks opened to each other on the basis of interbank agreements.
Monetary Aggregates
Cash is the basis of the entire monetary system, the most liquid cash and cash reserve, which attaches particular importance to ensuring the strength and stability of the cash component of the money supply. The most important quantitative indicator of monetary circulation is the money supply. The money supply is the total volume of purchasing and payment means serving the economic turnover and belonging to individuals, legal entities and the state. The characteristic of the total money turnover is reflected in monetary aggregates, which are indicators of the volume and structure of the money supply. In economic theory, an aggregate is a collection of specific economic units that are treated as if they were one unit. Monetary aggregates are used to analyze quantitative changes in money circulation on a certain date and for a certain period, as well as to develop measures to regulate the rate of change in the money supply and its individual components. Based on this analysis, the Central Bank develops the main guidelines for monetary policy and exercises control over the money supply in circulation. The principle of constructing aggregates is based on the fact that all goods can be ranked from absolutely liquid to absolutely illiquid. Consistently adding less liquid funds to the most liquid ones, we obtain, respectively, the indicators M0, M1, M2 ... Aggregates M0, Ml, M2, M3 constitute the total money supply. Each of the aggregates represents a part of the money supply. The M2 aggregate is taken as an indicator of the money supply used for macroeconomic analysis and statistics.
Monetary aggregates are indicators of the structure of the money supply. Monetary aggregates are types of money and funds that differ from each other in the degree of liquidity (the ability to quickly turn into cash). In different countries, monetary aggregates of different composition are allocated. The IMF calculates a common M1 indicator for all countries and a broader “quasi-money” indicator (term and savings bank accounts and the most liquid financial instruments circulating on the market).
Monetary aggregates are a hierarchical system - each subsequent aggregate includes the previous one.
Monetary aggregate M1 includes cash in circulation outside the banking system (monetary aggregate M0) and balances in national currency on settlement, current and other demand accounts of the population, non-financial and financial (except credit) organizations that are residents of the Russian Federation.
The M2 monetary aggregate includes the M1 monetary aggregate and balances in the national currency on the accounts of time deposits and other funds attracted for a period of time from the population, non-financial and financial (except credit) organizations that are residents of the Russian Federation.
In the financial statistics of Russia, monetary aggregates M0, M1, M2, M3 are used to analyze the ongoing changes.
Unit M0 -- cash in circulation.
Aggregate M1 - aggregate M0 + funds of enterprises in various bank accounts, demand deposits of the population, funds of insurance companies.
Aggregate M2 -- aggregate M1 + time deposits of the population in savings banks, including compensation.
Aggregate M3 -- Aggregate M2 + certificates and government bonds.
The Central Bank of the Russian Federation calculates monetary aggregates Đś0 and Đś2. The M2 aggregate represents the amount of cash in circulation (outside banks) and balances in the national currency on the accounts of non-financial organizations, financial (except credit) organizations and individuals who are residents of the Russian Federation.
Law of currency
The law of monetary circulation was formulated by K. Marx. In his work "Capital" K. Marx gave a scientific explanation of the relationship of such economic indicators as the money supply, the sum of prices for goods and services, credit, mutual and non-cash payments, the velocity of money. The law can be represented by the formula:
KD \u003d SCT-K-P-VP / S
where KD - the amount of money needed for circulation;
MCT - the sum of the prices of goods and services sold;
K - the sum of the prices of goods sold on credit;
P - the amount of payments on obligations;
VP - the amount of mutually repayable obligations;
C - the rate of turnover of the same-name monetary unit.
From the law of monetary circulation follows the basic principle of monetary circulation - the limitation of the money supply by the needs of trade. The amount of money an economy needs depends on the following three factors:
The number of goods and services sold on the market;
The level of prices for goods and tariffs;
Velocity of money circulation.
The amount of money in circulation primarily depends on the number of goods in circulation. The greater the number of commodities circulating in the country, the more money is required, ceteris paribus, to service the turnover. Money supply growth targets are determined for a control period, for example, a year ahead, but can be adjusted during the specified period. When setting targets, the Bank of Russia is guided by the following key indicators: projected GNP growth in real terms; the estimated velocity of circulation of money in the forecast period; the maximum allowable price increase.
Section 2 Finance
The term "finance" comes from the Latin word "finansia", which means "cash payment". The long process of development of commodity-money relations has changed the content of the phenomenon of finance.
Finance is economic public relations, the subject of which is the processes of accumulation, distribution and use of funds in the process of using the social product and income.
Monetary relations turn into financial ones when, as a result of the production of goods and the provision of services, funds of funds are created during their sale. Cash funds created at the level of the state, local governments are called centralized funds, and cash funds created at the level of economic entities, households are called decentralized.
Finance as a subjective cost tool for the functioning of economic entities forms a specific decision-making mechanism regarding the processes of formation and use of monetary funds. The object of finance is financial resources, which are a set of funds of funds at the disposal of economic entities, the state, households, i.e., this is money serving financial relations. They are formed in the process of material production, where new value is created and gross domestic product and national income arise.
Finance - a set of social relations that are formed in real money circulation during the formation, distribution and use of funds of funds.
Finances express economic relations related to the provision of sources of financing for the state, municipal and private sectors of the economy, production, circulation and households. The functioning of finance is aimed at the effective development of a socially oriented economy. Finance contributes to the achievement of the overall goals of economic development, which requires their optimal organization.
The main participants in financial relations are:
1) the state;
2) business entities;
3) population.
The main features of public finance:
1) monetary relations between two subjects (where there is no money, there can be no finance);
2) subjects have different rights, one of them (the state) has special powers.
3) in the process of these relations, the state budget is formed;
4) the regular receipt of funds to the budget is provided by law.
The market mechanism of management forms and implements a system of economic relations:
Directly between economic entities - producers and consumers (sellers and buyers) of goods and services;
In the sphere of production and circulation;
Between business entities (taxpayers and the state);
In the financial and budgetary sphere - between business entities (employers and employees);
in the field of labor relations.
Business entities are multifaceted and function simultaneously as:
Producer and consumer in the market of goods and services;
Borrower and investor in the financial market;
In a market economy, 3 specific main markets interact:
1) the market for goods and services;
2) labor market;
3) financial market.
All three markets are in constant interaction, performing specific functions of the market system of management.
The functioning of finance as an economic category is necessarily associated with the operation of objective economic laws.
At the present stage, such essential characteristics of finance as the social orientation of financial relations are highlighted, which enhances the importance of issues of clear interaction between all participants in financial relations in a market economy.
In the world practice of developed countries, two main models of a market economy are distinguished that ensure the economic and social progress of society, differing from each other primarily in the degree of state regulation of the economy.
The essence of this or that model is determined by the economic and social role of the state in the development of society. The tax capacity of production and income also depends on which of the models of the market economy system is implemented in the post-socialist states.
Finance is an integral link between the creation and use of the national income of countries. Finance affects production, distribution and consumption and is objective. They express a certain sphere of production relations and belong to the basic category.
The role of finance in the economy is constantly growing, reflecting the increasingly complex redistributive relations in society.
Centralized funds of funds are created by distributing and redistributing the national income created in the branches of material production. These include:
the state budget;
off-budget funds.
Decentralized funds of funds are formed from the cash income and savings of the enterprises themselves and the population. They are the basis of the financial system, since it is in this area that the predominant share of the state's financial resources is formed. Some of these resources are redistributed, in accordance with the norms of financial law, to budget revenues at all levels and to off-budget funds. At the same time, a significant part of these funds is subsequently directed to finance budgetary organizations; commercial organizations in the form of subventions, subsidies, and is also returned to the population in the form of social transfers (pensions, allowances, scholarships, etc.).
Among decentralized finance, the key place belongs to the finance of commercial organizations. Here material goods are created, goods are produced, services are provided, profit is formed, which is the main source of production and social development of society.
The salient features of finance are:
the distributive nature of relations, which is based on legal norms or business ethics, is associated with the movement of real money, regardless of the movement of value in a commodity form;
unilateral (unidirectional), as a rule, the nature of the cash flow;
creation of centralized and decentralized funds of funds.
The essence of finance is manifested in their functions: distributive, control and stimulating. At the same time, the distribution and control functions are interconnected and are performed simultaneously.
The distribution function of finance. During the distribution of national income, basic, or primary, incomes are created, the amount of which is equal to the national income. Formed during the distribution of national income among the participants in material production, these incomes are divided into two groups:
wages of personnel employed in the sphere of material production;
income of enterprises in the sphere of material production.
But since the state also has other areas and industries where national income is not created, it is necessary to allocate funds for their development. These are industries such as, for example, the defense industry, education, health care, management, social security and the maintenance of depressed areas. To ensure these monetary expenditures, with the help of finance, the state withdraws part of the income created in the sphere of material production, directing them to other areas. This is the redistribution of national income with the active participation of finance. In particular, in our country, the redistribution of national income is taking place in the interests of structural adjustment and development of agriculture, transport, energy, conversion of military production and in favor of the least well-to-do strata of the population.
Control function of finance. The control function is to ensure financial control over the distribution of gross domestic product, national income for the relevant funds, as well as their spending for the intended purpose. Control covers both production and non-production spheres, although incomes are not created in it. The purpose of financial control is to ensure the rational and economical use of material, labor and financial resources, natural resources and the reduction of unproductive costs and losses.
The control function of finance is provided by the multifaceted activities of financial authorities: employees of the financial system, treasury, tax service, exercising financial control. Control can be national, departmental, on-farm and public.
Audit is an independent type of control.
The Ministry of Finance of Russia and its local authorities play an important role in the implementation of financial control.
The stimulating function of finance. This function of finance allows the state, with the help of various financial levers, to influence the development of enterprises and entire industries in the direction necessary for society. Such levers of influence on economic processes are:
The budget, the funds from which are allocated for the development of a particular industry or facility;
Prices and tariffs, which, even in a market economy, allow the state to influence the financial condition of companies through state intervention in the pricing mechanism;
Taxes, which, as the most powerful financial instrument, allow, at a low level, to stimulate production, and at an excessively high level, to slow it down;
Export-import duties, which, due to low, preferential or high levels, make export-import operations multi-beneficial.
The simultaneous impact of several financial levers greatly enhances the effect on the development of production.
Financial resources are the totality of all funds that are at the disposal of the state, enterprises, organizations, institutions for the formation of the necessary assets in order to carry out all types of activities both at the expense of income, savings and capital, and at the expense of various types of income. An important component of financial resources are banking resources.
Financial resources are intended:
to fulfill financial obligations to the budget, banks, insurance organizations, suppliers of materials and goods;
implementation of costs for the expansion, reconstruction and modernization of production, the acquisition of new fixed assets;
wages and material incentives for employees of enterprises;
financing other costs.
Financial resources are divided into:
Centralized funds (state budget, off-budget funds);
Decentralized financial resources (cash funds of enterprises).
There are also financial resources of the state, regions, enterprises.
The main source of formation of centralized funds at the macro level is the national income. On the basis of the distribution and redistribution of national income, centralized funds of funds are formed. Part of the national income is formed and remains at the disposal of enterprises, that is, decentralized financial resources are created at the micro level, which are used for production costs.
The main source of financial resources of the enterprise is its profit from production activities.
The use of financial resources is carried out mainly through special-purpose funds, although a non-fund form of their use is also possible.
The financial resources of the state and enterprises are the direct objects of financial management, that is, the management of their formation, use and cash flow.
The presence of a sufficient amount of financial resources, their effective use, predetermine the good financial position of the enterprise, solvency, financial stability, liquidity. In this regard, the most important task of enterprises is to find reserves for increasing their own financial resources and their most effective use in order to increase the efficiency of the enterprise as a whole. The effective formation and use of financial resources ensures the financial stability of enterprises and prevents their bankruptcy.
The financial system of the state and its structure
The main documents regulating the financial system of the state are:
Tax Code of the Russian Federation;
Budget Code of the Russian Federation;
laws and regulations in the field of finance.
From an institutional point of view, the financial system is a collection of financial institutions.
From an economic point of view, the financial system is a set of forms, methods of formation, distribution and use of state and enterprise funds.
The financial system is a form of organization of monetary relations between all subjects of financial relations for the distribution and redistribution of the social product. The financial system of the state consists of three links:
1) National finances - have a three-level structure:
federal finance,
subjects of the federation,
Finances of municipal subjects.
2. Finances of enterprises - business entities.
3. Household finances.
Each link in the financial system performs its specific tasks and serves a specific group of financial relations.
The main task of national finance is the concentration of financial resources at the disposal of the state and their direction to finance national needs. They are formed at the expense of taxes, fees, duties, income from state property, etc.
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The textbook "Finance and Credit" was prepared in accordance with the program of the course "Finance and Credit"; is intended for students studying in the specialties "Management "Economics", "Commerce business)", "Mathematical methods in economics", etc. The manual reveals the essence of finance and their role in the development of the economy and the social sphere, the theory and practice of developing financial relations. The forms of credit, the stages of the organization of the credit process in the bank are considered. The task of giving the necessary minimum of knowledge to students and those who are interested in finance and credit issues has been solved. Therefore, the main issues in the field of credit finance have been selected, making it possible to navigate them.
Books and textbooks on the discipline Finance and Credit:
- Ed. T.M. Kovaleva. Finance, monetary circulation and credit: textbook / team of authors;. - M.: KNORUS. - 168 p. - 2016
- Klimovich V.P. Finance, money circulation and credit: textbook / V.P. Klimovich. - 4th ed., revised. and additional - M.: ID "FORUM": INFRA-M, - 336 p. - (Professional education). - 2015
- Neshitoy A.S. Finance and Credit: Textbook / A.S. Neshitoy. - 6th ed., revised. and additional - M.: Publishing and Trade Corporation "Dashkov and Co." - 576 p. - 2011
- V. V. Asaul, A. V. Dementiev, D. K. Molchanov; ed. V. V. Asaul. Finance, monetary circulation and credit: textbook. allowance; SPbGASU. - St. Petersburg, - 322 p. - 2010
- Troshpn A. N., Mazurina T. Yu., Fomkina V. I. Finance and credit: Textbook. - M.: INFRA-M, - 408 p. - (Higher education). - year 2009
- Makarova L. A. Finance and credit: textbook / L. A. Makarova. - Tambov: Tambov Publishing House. state tech. university, - 120 p. - year 2009
- Nikolaeva T.P.. FINANCE AND CREDIT: Educational and methodological complex. - M.: Ed. EAOI center. - 371 p. - 2008
- Ed. G.B. Pole. Finance. Money turnover. Credit: textbook for university students studying economics (080100) and management (080500) - 3rd ed., revised. and additional - M.: UNITY-DANA, - 639 p. - (Series "Golden Fund of Russian textbooks") - 2008
"FINANCE, MONEY CIRCULATION AND CREDIT A course of lectures FOR STUDENTS OF FULL-TIME AND CORRESPONDENCE TRAINING IN SPECIALTIES: 38.02.01 ..."
MINISTRY OF AGRICULTURE OF THE RUSSIAN FEDERATION
FEDERAL STATE BUDGET EDUCATIONAL INSTITUTION
HIGHER EDUCATION
"OMSK STATE AGRARIAN UNIVERSITY NAMED AFTER P.A. STOLYPIN"
(FGBOU VO Omsk State Agrarian University)
Omsk Agricultural College
FINANCE, MONETARY CIRCULATION AND CREDIT
Lecture courseFOR STUDENTS OF CORRESPONDENCE AND CORRESPONDENCE FORMS OF TRAINING
BY SPECIALTY:
38.02.01 "Economics and accounting (by industry)"21.02.05 "Land and property relations"
Omsk Considered and approved at the meeting of the PCMK of general professional disciplines Protocol No. __5__ "15" June_2016
A course of lectures on the discipline "Finance, monetary circulation and credit" for the specialties: 38.02.01 Economics and accounting (by industry), 21.02.05 and Land and property relations, - Omsk, 2016.
Developed by: A.P. Pepelyaeva, teacher of the 1st qualification category.
Reviewer: Ovodova N.D., teacher of the highest category of the department of economic education of the Federal State Budgetary Educational Institution of Higher Education Omsk State Agrarian University This manual is intended for students to master theoretical knowledge in the discipline "Finance, monetary circulation and credit" for specialties: 38.02.01 Economics and accounting (by industry ), 21.02.05 and Land and property relations The manual reveals the main elements of the financial, budgetary, monetary, credit systems, the securities market and the foreign exchange market.
The manual is compiled in accordance with the work program for the discipline for these specialties, meets the requirements of the state educational standard and is intended for students of secondary specialized institutions.
OAT FGBOU VO Omsk State Agrarian University © A.P. Pepelyaeva, compilation, 2016 Contents Introduction ………………………………………………………………………………. 3 Section 1. The essence of finance and its management
1.1. Essence and functions of finance…………………………………..…… 4
1.2. Financial system……………………………………………………. 6
1.3. Financial management ……………………………………….……… 7
1.4. Financial policy …………………………………………………….. 8
1.5. Financial control………………………………………….……… 9 Section 2. Budget and budget system
2.1. Budget device of the Russian Federation. Budget system……………..……… 12
2.2. Budget revenues………………………………………………..…….. 14
2.3. Budget expenditures …………………………………………………….. 15 2.4.
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INTRODUCTION
The market economy puts forward certain conditions for the conduct of the financial and economic activities of an enterprise and places high demands on knowledge in such an area as financial relations, since it is this knowledge that will allow obtaining the financial result that any enterprise strives for - profit. The financial position of an enterprise determines its competitiveness and growth prospects. Lack of financial management (financial management) leads to bankruptcy.But the lack of financial results indicates a crisis not only in a commercial organization, but also at the state level. At the same time, finances are the main lever of state regulation in order to maintain the country's economy at a normal level.
The textbook is devoted to the study of such elements of the modern financial market, the knowledge of which determines the competent government.
The textbook is a course of lectures given by the author in the discipline "Finance, monetary circulation and credit".
SECTION 1. ESSENCE OF FINANCE AND THEIR MANAGEMENT
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FINANCE is an economic relationship associated with the formation, distribution and use of centralized (state) and decentralized funds of funds in order to perform the functions and tasks of the state and ensure conditions for expanded reproduction.
CENTRALIZED FINANCE - economic relations associated with the formation, distribution and use of state funds accumulated in the budget system and state extra-budgetary funds;
DECENTRALIZED FINANCE - monetary and economic relations that ensure the circulation of monetary funds of enterprises of various forms of ownership.
Thus, financial relations constitute a significant part of economic monetary relations.
However, finance and money are different.
Money is a universal equivalent, a measure of the costs of social labor.
Finance is an economic mechanism by which financial resources are distributed within the state.
Finance combines the following groups of monetary relations:
Between enterprises in the process of acquiring goods and materials, selling products, goods and services.
Between enterprises and when pooling financial resources
Between the state and enterprises when paying taxes and financing their expenses from the budget and extra-budgetary funds.
Between the state and citizens when paying taxes and receiving funds from the budget and extra-budgetary funds.
Between budgets of different levels
Between enterprises, the population and insurance organizations when they pay insurance premiums and compensate for damage
Within the organization in the formation of production assets and the distribution of income.
FUNCTIONS OF FINANCE
1. DISTRIBUTION function is implemented in 2 processes.
one). Distribution of the national income among the participants in material production. Here are created the so-called. primary income of enterprises in this area.
Primary incomes ensure the normal course of material production, but do not make it possible to solve nationwide economic, as well as social and political problems. So step 2 is needed.
2). Redistribution of national income between the production and non-production spheres, between different social groups of the population, between different regions. The basis of redistribution is the collection of taxes and the use of funds in the interests of the state.
2. The CONTROL function of finance is manifested in control over the distribution of GDP (gross domestic product) in the relevant areas and their intended use.
The control function is based on normative acts on financial and tax issues. Control is carried out by special bodies (KRU, tax office, etc.), as well as partners in financial relations (bank, etc.).
–  â€“  â€“
MANAGEMENT - a set of actions aimed at ensuring the optimal functioning of any system, any process.
Management is inherent in all spheres of human activity, including financial. In any managed system, objects and subjects of management are allocated.
The purpose of financial management is to ensure the stable development of economic systems, which include enterprises and organizations, industries for the development of productive forces, individual territories and sectors of the economy. All these activities are closely interconnected and interdependent.
The totality of all organizational structures that manage finances is called the financial apparatus.
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FINANCIAL MANAGEMENT ELEMENTS
1. Strategic management is expressed in the development of financial policy, the determination of financial resources through forecasting the prospects for establishing the volume of financial resources for the implementation of targeted programs, the development of financial plans that ensure the achievement of strategic goals.
2. Operational financial management includes a set of measures aimed at achieving maximum financial results in a particular situation and ensuring the implementation of financial plans.
3. Control over finances consists in studying their compliance with legislative and regulatory acts, planned indicators, clarifying reserves for the growth of resources. It serves as the basis for strategic and operational management.
1.4. financial policy
FINANCIAL POLICY is a control action, the main content of which is the establishment of the principles for the functioning of the state's financial system, its individual elements or the finances of an economic entity (the financial policy of an enterprise) and their implementation in practice.
Directions of financial policy:
1. Economic
2. Social
3. Cultural
4. Technical
5. Budget
6. Credit
7. Domestic and foreign policy
The financial policy includes:
1. BUDGET policy, which aims to determine:
Sources of formation of the "donor" of the state budget;
Priority directions of budget expenditures;
Permissible limits of budget imbalance;
Sources of financing the budget deficit;
The principles of the relationship between the individual links of the budget system.
As part of the budget policy, there are: tax, investment policy, public debt management policy, etc.
2.CREDIT AND MONETARY POLICY - ensures the stability of monetary circulation through the management of emissions, regulation of inflation and the exchange rate of the national currency, timeliness and uninterrupted settlements through the regulation of the banking system.
In credit policy allocate: emission, price, currency, credit.
The state in the process of its functioning carries out political activities in various spheres of public life. The object of this activity is the economy as a whole, as well as individual constituent elements: pricing, monetary circulation, finance, loans, foreign exchange relations, etc.
The totality of state measures for the use of financial relations for the performance by the state of its functions - characterizes the state financial policy.
1. Development of a general concept of financial policy, determination of its foundations, directions, goals, main tasks.
2. Creation of an adequate financial mechanism Z. Management of the financial activities of the state and other economic entities in its interests.
An important component of financial policy is the establishment of a financial mechanism through which all state activities in the field of finance are carried out. The financial mechanism is a system of forms, types and methods of organizing financial relations established by the state. The financial mechanism is the external side of finance, manifested in financial practice. Its elements include the forms of financial resources established by the state, the methods of their formation, the system of legislative norms and standards that are used in determining the income and expenses of the state, the organization of the budget system, enterprise finance and the securities market.
1.5. Financial control
FINANCIAL CONTROL - control over compliance with financial legislation in the process of formation and use of cash funds, assessment of the effectiveness of financial transactions and the feasibility of expenses.
FC can be divided into 2 spheres - state and non-state.
STATE FINANCIAL CONTROL - ensures the implementation of the financial policy of the state and is carried out by state financial authorities.
NON-STATE FINANCIAL CONTROL - subdivided into external and internal. External control can be performed by banks, insurance companies and institutions. Internal control financial management. Its main content is the assessment of the financial condition, creditworthiness and investment attractiveness of the enterprise.
Both external and internal control can be performed with the involvement of audit firms.
Let us dwell on the state financial control in more detail.
1. Financial control by representative bodies For its implementation, special structures are created: committees and commissions of the Council of Federations (SF) and the State Duma (DG), the Accounts Chamber of the Russian Federation. The State Duma Commission on Budget, Taxes, Banking and Finance conducts expert analytical work on financial issues.
The Accounts Chamber has the following tasks:
Organization of control over the execution of the federal budget (FB) and off-budget funds (VBF),
Preparation of proposals to eliminate detected violations and improve the budget process,
Evaluation of the effectiveness and expediency of spending public funds,
Determination of the degree of validity of articles of FB projects,
Financial expertise, i.e. assessment of the financial consequences of the adoption of federal laws for the budget,
Control over the receipt and movement of budget funds in bank accounts, etc.
The main forms of control carried out by the Accounts Chamber are thematic inspections and revisions.
2. Presidential control - finances are exercised in accordance with the Constitution of the Russian Federation by issuing decrees on financial issues, signing federal laws, appointing and dismissing the Minister of Finance of the Russian Federation, submitting candidates to the State Duma for appointment to the post of chairman of the central bank.
3. The most important place in the system of financial control by executive bodies is occupied by the Ministry of Finance of the Russian Federation. The Ministry of Finance exercises financial control in the process of developing the federal budget.
Operational financial control within the Ministry of Finance is carried out by the Control and Revision Department (KRU) and the bodies of the Federal Treasury. The KRU of the Ministry of Finance and its local bodies exercise control over budgetary funds at state enterprises and commercial structures that receive funds from budgets and non-budgetary funds, check the financial activities of municipally owned enterprises, as well as the execution of estimates and compliance with financial discipline by local administrations. In addition, the KRU bodies carry out checks on the instructions of law enforcement agencies.
KRU authorities can send information about detected violations to higher and law enforcement agencies.
Treasury bodies are called upon to implement the state budget policy to manage the process of execution of the federal budget, while exercising strict control over state federal extra-budgetary funds and financial relations between them and the federal budget. They can use the following measures to influence the offender.
Suspension of account transactions
Undisputed collection of funds
Penalty in the amount of the discount rate of the Central Bank of the Russian Federation.
4. Ensuring a unified system of control over compliance with tax laws, correct calculation, completeness and timely payment of taxes and other obligatory payments is the main task of the State Tax Service. A whole range of measures can be applied to violators of tax laws:
Financial sanctions (fines, penalties, recovery of illegally obtained income)
Administrative sanctions against management and criminal liability.
5. The Federal Insurance Supervision Service (Rosstrakhnadzor) - subordinated to the government of the Russian Federation, in addition to licensing insurance activities and regulating the single insurance market, monitors the validity of insurance rates and ensuring the solvency of insurers. Suspension and revocation of licenses are the main measures of their influence on violators.
6. A special role in the implementation of the FC belongs to the Central Bank of Russia (CBR). As a body of state administration, endowed with power, organizes and controls monetary and credit relations in the country. The Central Bank of the Russian Federation supervises the activities of commercial banks and has the ability to apply the following measures of influence to them: fines up to 1% of the authorized capital of the bank, prohibition of certain operations, change of management, revocation of licenses.
7. Non-departmental financial control is carried out by structural subdivisions of ministries, departments, state committees and other government bodies over the financial and commercial activities of enterprises, institutions, organizations subordinate to them.
SECTION 2. BUDGET AND BUDGET SYSTEM
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BUDGET - a form of formation and spending of a fund of funds intended for financial support of the tasks and functions of the state and local self-government. In any country, the state budget is the leading link in the financial system. It combines the main revenues and expenditures of the state.
The centralization of funds is of great economic and political importance; this makes it possible to maneuver resources, concentrate them on decisive areas of economic and social development, and implement a unified economic and financial policy throughout the country.
MAIN BUDGET FUNCTIONS
redistribution of national income and GDP and the creation of a nationwide fund of funds;state regulation and stimulation of the economy;
financial support of social policy;
control over the formation and use of a centralized fund of funds.
Through expenditures and taxes, the budget acts as an important tool for regulating and stimulating the economy and investment, and increasing production efficiency.
The budget system of the Russian Federation is based on the economic relations of the state structure of the Russian Federation, it regulates the totality of the federal budget, the budget of the constituent entities of the Russian Federation, local budgets and the budgets of state non-budgetary funds by the rules of law.
The budget system of the Russian Federation consists of budgets of three levels:
federal budget and budgets of state off-budget funds;
budgets of subjects of the Russian Federation (regional) and budgets of territorial state extra-budgetary funds;
local budgets.
Budgets are approved in the form of state laws by the representative bodies of the respective levels.
The federal budget and all regional budgets together make up the consolidated budget of the Russian Federation, and the specific regional budget and the budgets of all municipalities in the region together make up the consolidated budget of the constituent entity of the Russian Federation.
In addition to the budgets themselves, in accordance with the Budget Code of the Russian Federation, the budget system includes target budget funds and state off-budget funds.
TARGET BUDGET FUND - a cash fund formed in accordance with the legislation of the Russian Federation as part of the budget at the expense of special-purpose income or in the order of targeted deductions from specific types of income or other receipts and used according to a separate estimate. The funds of the target budget fund cannot be used for purposes that do not correspond to the purpose of the target budget fund.
STATE EXTRA-BUDGETARY FUND - a fund of funds formed outside the federal budget and the budgets of the constituent entities of the Russian Federation and intended for the implementation of the constitutional rights of citizens to pensions, social insurance, social security in case of unemployment, health protection and medical care. Expenses and incomes of the state off-budget fund are formed in the manner prescribed by federal laws.
Budgets are drawn up for one financial year, which corresponds to the calendar year and lasts from January 1 to December 31.
Bodies of state, municipal financial control established by legislative and executive authorities carry out:
Control over the execution of the budgets of the relevant levels and the budgets of state off-budget funds;
They carry out examinations of draft budgets, federal and regional targeted programs and other normative legal acts of budget legislation.
The grouping of revenues and expenditures of budgets of all levels of the budget system, as well as sources of financing the deficits of these budgets, used for the preparation and execution of budgets and ensuring comparability of budget indicators at all levels of the budget system, is called BUDGET
CLASSIFICATION, which includes:
classification of budget revenues of the Russian Federation;
economic classification of expenditures of the budgets of the Russian Federation (according to the economic meaning - current and capital);
functional classification of expenditures of the budgets of the Russian Federation (according to the areas of financing of state functions and powers);
departmental classification of federal budget expenditures (by ministries and departments):
classification of sources of internal and external financing of budget deficits of the Russian Federation;
classification of types of state external and internal debts of the Russian Federation, constituent entities of the Russian Federation, municipalities, external assets of the Russian Federation.
2.2. Budget revenues
REVENUES of the budget represent a part of the centralized financial resources of the state necessary for the performance of its functions. Incomes express the economic relations that arise in the process of forming part of the centralized funds and are placed at the disposal of the authorities.
TYPES OF BUDGET INCOME
tax revenues - federal, regional and local taxes and fees provided for by the tax legislation of the Russian Federation, as well as penalties and fines, tax credits, deferrals and installments granted to the relevant budget.non-tax income - income from the use of property in state or municipal ownership; income from paid services rendered by budgetary institutions under the jurisdiction of the federal executive authorities, executive authorities of the constituent entities of the Russian Federation and local governments, respectively; fines, funds received as a result of confiscation, compensation, compensation for harm caused to the Russian Federation or its subjects; income in the form of financial assistance received from the budgets of other levels of the budget system of the Russian Federation, with the exception of budget loans and budget credits; other non-tax revenues;
income of target budget funds;
free transfers.
All budget revenues are divided into own and regulatory.
OWN INCOMES of budgets - types of income fixed on a permanent basis in whole or in part for the corresponding budgets by the legislation of the Russian Federation. Financial assistance is not the own income of the relevant budget, the budget of the state off-budget fund.
REGULATORY REVENUES of budgets - federal and regional taxes and other payments for which the rates of deductions (as a percentage) to the budgets of the constituent entities of the Russian Federation or local budgets for the next financial year, as well as on a long-term basis (at least 3 years) for various types of such income. The deduction rates are determined by the law on the budget of that level of the budget system of the Russian Federation, which transfers regulatory revenues to the budget of another level.
CLASSIFICATION OF INCOME
1. Depending on the sources of education:
income from legal entities;
taxes from individuals;
loans (GKO);
proceeds from the sale of state property.
2. By types of taxes:
unified social tax;
income tax, etc.
3. By collection methods:
tax;
non-tax.
BUDGET INCOME GENERATION METHODS
1. Taxes - are the state method of redistribution of national income, they account for about 90% of all revenue receipts.
2. Government loans.
3. Emission of money - used only in emergency circumstances, leads to an increase in the money supply and increased inflation.
2.3. Budget expenditures
EXPENDITURES of the budget are the costs arising in connection with the performance of the state of its functions. Each type of expenditure has a qualitative and quantitative characteristic. A qualitative characteristic allows you to establish the purpose of budget expenditures, and a quantitative one - their size.
All budget expenditures are divided into capital and current.
Capital expenditures of budgets - a part of budget expenditures that ensures innovation and investment activities, including items of expenditure intended for investment in existing or newly created legal entities in accordance with the approved investment program, related to expanded reproduction, etc.
Current budget expenditures - part of budget expenditures that ensures the current functioning of public authorities, local governments, budgetary institutions, the provision of state support to other budgets and individual sectors of the economy in the form of grants, subsidies and subventions for current functioning.
Each type of expenditure is divided according to departmental and targeted features.
Departmental - allows you to select in each group of expenses the corresponding state institution or legal entity that receives budget funds. Target - defines specific types of costs for the purpose of their rational use and control over their use.
CLASSIFICATION OF EXPENSES
1. According to their role in the process of reproduction:
Costs associated with financing material production;
The costs associated with the maintenance of the non-productive sphere.
2. For public purposes:
Expenses for financing social and cultural events;
National defense spending;
The cost of maintaining the administrative apparatus, etc.
3. By industry structure:
Agriculture;
Industry;
Transport;
Trade, etc.
The balance of budgets should ensure the correspondence of their expenditures and sources of formation. In the practice of budget planning, both a budget deficit is possible - an excess of budget expenditures over its revenues, and its surplus - an excess of budget revenues over its expenditures.
SOURCES OF FINANCING THE BUDGET DEFICIT
1. Credits received by the Russian Federation from credit institutions in the currency of the Russian Federation;
2. State loans carried out by issuing securities on behalf of the Russian Federation:
3.Budget loans and budget credits received from the budgets of other levels of the budget system of the Russian Federation;
4. Proceeds from the sale of state-owned property:
5. The amount of excess of income over expenditure on state stocks and reserves;
6.Changing the balances of funds on accounts for accounting for federal budget funds:
7. Government loans in foreign currency by issuing securities on behalf of the Russian Federation;
8. Credits of foreign governments, banks and firms, international financial organizations, provided in foreign currency, attracted by the Russian Federation.
2.4. State loan
STATE CREDIT is a set of economic relations between the state represented by its authorities and administration, on the one hand, and individuals and legal entities, on the other, in which the state acts as a borrower, creditor and guarantor.
In quantitative terms, the activity of the state as a borrower of funds prevails. The volume of operations as a creditor, that is, when the state provides loans to legal entities and individuals, is much lower. In cases where the state assumes responsibility for paying off other obligations assumed by individuals and legal entities, it acts as a guarantor.
FUNCTIONS OF STATE CREDIT
1. Through the distribution function, the formation of centralized state monetary funds or their use on the principles of urgency, payment and repayment is carried out. As a borrower, the state provides additional funds to finance its expenses.
2. The regulatory function is that, entering into credit relations, the state affects the state of money circulation, production and employment.
3. The control function has specific features:
associated with the activities of the state and the state of the centralized fund of funds;
covers the movement of value in both directions, since it involves the return and compensation of receiving funds;
is carried out not only by financial structures, but also by credit institutions.
The Federal Assembly, which sets the maximum size for both raising funds to finance both the budget deficit and lending at the expense of the budget, is the supreme body for managing public credit in the Russian Federation.
Borrowing activities of the state in the domestic and foreign markets
INTERNAL LOANS OF THE FEDERATION.
To cover the budget deficit, the Russian Federation is forced to borrow money. In the Budget Code, BORROWED FUNDS are defined as loans and credits attracted from individuals and legal entities, foreign states, international financial organizations, for which debt obligations of the Russian Federation arise as a borrower or a guarantor of repayment of loans (credits) by other borrowers.As a result of borrowing activities, a state debt is formed - debt obligations of the Government of the Russian Federation to individuals and legal entities, foreign states, international organizations and other subjects of international law, including obligations under state guarantees provided by the Russian Federation. The national debt includes the debt not only of the Government of the Russian Federation, but also of the lower-level management bodies that are part of the state.
All property constituting the state treasury serves as security for the state debt of Russia.
FEDERATION EXTERNAL LOANS.
Russia is among the top five countries with the highest external debt along with Brazil, Mexico, India and Argentina.The bulk of the debt of the Russian Federation falls on the Paris Club, which unites about two dozen states.
The second place in terms of debt is occupied by interbank loans provided to Vnesheconombank during the Soviet era. The interests of this group are represented by the London Club, which unites more than 600 commercial banks.
The state as a creditor
INTERNAL LOANS
The Budget Code of the Russian Federation distinguishes between budget loans and budget loans.Budget credit as a form of financing budget expenditures, which provide for the provision of funds to legal entities or other budgets on a returnable and reimbursable basis.
Budget loan - budgetary funds provided to another budget on a repayable, gratuitous or reimbursable basis for a period of not more than six months within a financial year.
Borrowers of federal budget funds on a repayable basis may be Russian enterprises and organizations, except for enterprises with foreign investments.
EXTERNAL LOANS.
State loans provided by the Russian Federation to foreign states, their legal entities and international organizations are credits (loans) for which foreign states, their legal entities and international organizations have debt obligations to the Russian Federation as a creditor.The debt obligations of foreign states to the Russian Federation as a creditor form the debt of foreign states to the Russian Federation.
SECTION 3. FINANCE OF COMMERCIAL ORGANIZATIONS
AND ENTERPRISES
3.1. The essence of the finance of commercial organizations (enterprises) Finance of commercial organizations (enterprises), being the main link in the financial system, covers the processes of creation, distribution and use of gross domestic product and national income in value terms. They function in the sphere of material production, where the total social product and national income are mainly created.
FINANCE OF COMMERCIAL ORGANIZATIONS (ENTERPRISES) is
financial or monetary relations arising in the course of entrepreneurial activity, as a result of which equity capital, targeted centralized and decentralized funds of funds are formed, their distribution and use take place.The financial relations of commercial organizations are based on the following
PRINCIPLES:
1. Economic independence - enterprises independently determine the scope of economic activity, sources of financing, directions for investing funds, etc.
2. Self-financing means full self-sufficiency of costs for the production and sale of products, investment in the development of production, etc.
3. Material interest - that is, making a profit.
Interest in the results of activities is manifested not only by its participants (owners, administration, employees), but also by the state.
4. Liability - the presence of a certain system of responsibility for the conduct and results of financial and economic activities, the safety of equity, compliance with contractual obligations, legislation, etc.
5. Ensuring financial reserves - the formation of financial reserves and other similar funds that can strengthen the financial position of the enterprise at critical moments of management.
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Two factors influence the organization of enterprise finance:
1) organizational and legal form of management;
2) branch technical and economic features.
Organizational and legal form of management The organizational and legal form of management is determined by the Civil Code of the Russian Federation, according to which an organization that owns separate property and is liable for its obligations with this property is recognized as a legal entity. It has the right on its own behalf to acquire and exercise property and personal non-property rights, to bear obligations. Be a plaintiff and defendant in court. A legal entity must have an independent balance sheet or estimate.
Organizations can be legal entities:
1) pursuing profit as the main goal of their activities - commercial organizations;
2) not having profit-making as such a goal and not distributing profits among participants - non-profit organizations.
The organizational and legal form of management determines the content of financial relations in the process of formation of the authorized (share) capital. The formation of the property of commercial organizations is based on the principles of corporatism. The property of state and municipal enterprises is formed on the basis of state and municipal funds.
Commercial organizations are created in the following FORMS:
1. Participants in a general partnership create an authorized capital at the expense of the contributions of participants and, in essence, the authorized capital of a general partnership is a share capital. By the time of registration of a general partnership, its participants must make at least half of their contribution to the share capital.
The rest must be paid by the participant within the terms specified in the founding document. If this rule is not followed, the participant is obliged to pay to the partnership 10% per annum from the amount of the unpaid part of the contribution and compensate for the losses incurred (clause 2 of article 73 of the Civil Code of the Russian Federation). A participant in a full partnership has the right, with the consent of the other participants, to transfer his share in the share capital or part of it to another participant in the partnership or to a third party.
2. The founding agreement of a limited partnership stipulates the conditions on the amount and composition of the share capital, as well as the size and procedure for changing the shares of each of the general partners in the share capital, the composition, terms for making contributions and liability for violation of obligations (clause 2 of article 83 of the Civil Code RF). The procedure for the formation of the authorized capital is similar to the procedure for its formation in a full partnership. The management of the activities of a limited partnership is carried out only by general partners. Participants-contributors do not take part in business activities and are in essence investors.
3. The authorized capital of a limited liability company is also formed from the contributions of its participants. The minimum authorized capital in accordance with the law is set at 100 times the minimum wage on the day of registration of the company and must be paid at the time of registration at least half. The rest must be paid during the first year of the company's operation. If this procedure is violated, the company must either reduce its authorized capital and register this reduction in the prescribed manner, or terminate its activities by liquidation (clause 3, article 90 of the Civil Code of the Russian Federation). A member of the company has the right to sell his share in the authorized capital to one or more members of the company or to a third party, if this is stipulated in the charter.
The authorized capital of a company with additional liability is formed similarly (clause 1, article 95 of the Civil Code of the Russian Federation).
4. Open and closed joint stock companies form the authorized (share) capital based on the par value of the company's shares.
The minimum amount of the authorized capital of an open joint-stock company, in accordance with the current legislation, is set at 1,000 minimum salaries on the day of registration of the company. The authorized capital is formed by placing ordinary and preferred shares. Moreover, the share of preferred shares in the total authorized capital should not exceed 25%. An open subscription for shares of an open joint stock company is not allowed until the authorized capital is paid in full. This restriction is directed against the creation of fictitious joint-stock companies. When establishing a joint-stock company, all its shares must be distributed among the founders. At the end of the second and each subsequent financial year, in the event that the value of net assets turns out to be less than the authorized capital, the joint-stock company is obliged to declare and register in the prescribed manner the reduction of its authorized capital. If the value of the specified assets of the company becomes less than the minimum authorized capital determined by law, the company is subject to liquidation (Article 99 of the Civil Code of the Russian Federation). An open joint stock company has the right to conduct an open subscription for shares issued by it and to carry out their free sale on the stock market. Shares of a closed joint stock company are distributed only among its founders. The authorized capital of a closed joint stock company cannot be less than 100 minimum salaries established at the time of its registration.
5. In such areas of entrepreneurial activity as production, processing and marketing of industrial and agricultural products, trade, consumer services, etc., the preferred form of entrepreneurial activity is a production cooperative. The property of a production cooperative consists of shares of its members in accordance with the charter of the cooperative. A production cooperative may create indivisible funds at the expense of a certain part of the property, if so stipulated in its charter. By the time of registration of the cooperative, each of its members is obliged to pay at least 10% of their share contribution, and the remaining part - within a year from the date of registration.
6. A fundamentally different procedure for the formation of unitary enterprises (state and municipal enterprises). They can be created on the right of economic management and on the right of operational management. The former are created by decision of the authorized state or municipal body, and, accordingly, the property is located, and state or municipal property. A unitary enterprise is managed by a head appointed by the owner or his authorized representative. The size of the statutory fund of a unitary enterprise must not be less than the amount specified in the law on state and municipal unitary enterprises. The authorized capital must be fully paid up by the time of registration of the unitary enterprise.
Unitary enterprises based on the right of operational management are created by decision of the Government of the Russian Federation. Their property is state property. The enterprise has the right to dispose of its property only with the consent of the owner.
The issue of profit distribution is also solved differently. The profit of commercial organizations, remaining after its distribution in the general established order, is distributed among the participants on the principles of corporatism. The profit of unitary enterprises after paying income tax and other obligatory payments remains entirely at the disposal of the enterprise and is used for production and social development.
Industry specific technical and economic features The content of financial relations and the organization of the financial work of economic entities are significantly affected by their sectoral affiliation, technical and economic features. Industry specificity affects the composition and structure of production assets, the duration of the production cycle, the features of the circulation of funds, the sources of financing for simple and expanded reproduction, the composition and structure of financial resources, the formation of financial reserves and other similar funds.
So, in agriculture, natural and climatic conditions dictate the need to form financial reserves, both in cash and in kind; natural conditions determine the natural cycle of development of plants and animals and, consequently, the circulation of financial resources, the need for their concentration by certain periods, which, in turn, necessitates the attraction of borrowed funds.
Organizations and institutions of transport carry out financial and economic activities on the principle of combining state regulation and market relations. The finished product to be sold in transport is the transport process itself. Thus, the production and sale of products coincide in time and the circuit is carried out in two stages instead of three. The costs of social labor associated with the transportation of products increase its value by the amount of transportation costs, which, in addition to additional new value, also contain a surplus product. In transport, the share of fixed production assets is large, the reproduction of which requires significant funds. Features of payments for transport services, the reproduction of fixed assets determine the need for centralization of part of the funds at the level of the Ministry of Railways with their subsequent redistribution, which is reflected in the financial plan of the transport enterprise.
Organizations (enterprises) in the sphere of commodity circulation, being a link between the production of products and their consumption, contribute to the completion of the circulation of a social product in a commodity form and thereby ensure its continuity.
The specifics of trade is the combination of production operations (sorting, packaging, packaging, processing and storage of agricultural products, etc.) with operations associated with changing forms of value, i.e. directly with the sale of products. The cost of purchased goods is not included in the costs of trade enterprises. A trade organization buys already produced goods, incurring costs only to bring them to consumers. There are peculiarities in the composition and structure of working capital, a significant part of which is invested in inventories.
A feature of the sectoral structure of fixed assets is a combination of own and leased fixed assets. All these features are taken into account in the formation of financial resources and their use.
Finance construction organizations also have a number of features. Construction is characterized by a long production cycle compared to industry. A large proportion of work in progress is in working capital. The need for working capital has large fluctuations both for individual objects and for technological cycles, which affects the structure of sources of financing for working capital.
The implementation of construction in various climatic and territorial zones determines the individual cost of objects and leads to an uneven receipt of revenue.
SECTION 4. MONEY AND MONEY CIRCULATION
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Money spontaneously emerged from the mass of commodities as a result of the development of commodity exchange. At various stages of historical development, the role of money was played first by commodities, then by noble metals, which was facilitated by their homogeneity, divisibility, storability, transportability - qualities that made them most suitable for performing the function of money. The Russian economist Sieber defined that money is a universal equivalent, a commodity for which other commodities are exchanged, it is a universal means of measuring the value of all other commodities.
MONEY is an economic category in which social relations are manifested and with the participation of which money is built, money acts as an independent form of exchange value, means of circulation, payment, accumulation. Money arises under a certain condition of production and economic relations and contributes to their development.
Immediate prerequisites for the emergence of money:
1) Transition from natural economy to the production of goods and the exchange of goods;
2) Property segregation of producers of goods.
In the initial period of the existence of human society, a subsistence economy dominated, in which products were produced for their own consumption. Gradually there was a specialization of people in the manufacture of certain types of products. At the same time, it was possible to use the excess production for exchange for other products needed by this manufacturer.
The direct exchange of goods for goods has extensive restrictions:
Money is a special commodity that serves as a universal equivalent.
FUNCTIONS OF MONEY
1. Measure of value.
The value of commodities finds general expression in money, i.e. the magnitude of their value is determined by equating them to a certain amount of money. Money serves as a universal embodiment and measure of value.
2. Medium of exchange.
In the process of commodity circulation, Commodity - Money - Commodity, money plays the role of an intermediary in the exchange of goods and performs the function of a means of circulation. Compared with the exchange of goods for goods, commodity circulation with the use of money does not require: the mutual correspondence of the needs of two exchanging commodity owners, the coincidence in time of the acts of sale and purchase, the coincidence of the acts of sale and purchase in space.
With the advent of money, there is the possibility of a gap between selling and buying.
3. Means of accumulation.
Selling a product without a subsequent purchase makes it possible to accumulate wealth embodied in money. Money acts in the function of the formation of treasures, accumulations and savings, when they are temporarily withdrawn from circulation and settle in the hands of commodity producers.
4. Means of payment.
Due to the unequal duration of the periods of production of various goods, by the time a commodity producer appears on the market, potential buyers may not have cash. There is a need to buy and sell on credit. The medium of circulation then is not the money itself, but the debt obligations expressed in them. When used to pay off debt, money acts as a means of payment.
5. World money.
The development of international political and economic relations (foreign trade, international credit relations, etc.) determines the functioning of money in the world market. World money is in the form of ingots of precious metals, and in the conditions of developed capitalism - in the form of ingots of gold, because. defective money that circulates within a particular country loses its force on the world market.
World money can perform the following functions:
international means of payment; international purchasing medium; the universal embodiment of social wealth.
ROLE OF MONEY
1.Money is a universal value equivalent.
2. Advancing money capital to expand production.
3. Purchase of goods and resources on credit.
4.Purchase and sale of labor in the labor market (Payment of wages).
5. Realization of goods in the domestic market.
CONCEPTS ON THE ORIGIN OF MONEY
1. Rationalistic (Aristotle) ​​- explains the origin of money by an agreement between people and believes that money is an instrument of technical exchange and nothing more.
2. Evolutionary (Karl Marx) - proves that money appeared against the will of people as a result of long-term development, exchange, i.e. From the vast world of commodities, a special commodity has emerged that plays the role of money.
STAGES OF METABOLIC DEVELOPMENT
1. The simple (random) form of value corresponds to the early stage of exchange (between communities), when the exchange was of a random nature, i.e. when one commodity expressed the value of another.
2. The full (expanded) form of value is associated with the development of exchange and the emergence of specialization in production, while each commodity could be exchanged for many other commodities.
3. The universal form of value - i.e. separation from the commodity world of individual goods that play the role of a general equivalent (salt, flour, livestock).
4. The role of the universal equivalent is assigned to noble metals (gold, silver) due to their natural properties.
EVOLUTION OF MONEY
1. Metal:
1) gold - bullion - metal money in the form of ingots of various shapes (plates, wire).
2) gold - motto - coinage in the form established by law with a certain weight content.
2. Paper - banknotes issued to cover the budget deficit, endowed by the state with a forced exchange rate, allowing them to play the role of a purchasing and means of payment.
3. Credit - check, plastic credit card, electronic money, etc.
4.2. Cash and non-cash money circulation MONETARY CIRCULATION - the movement of money in the performance of their functions in cash and non-cash form. The beginning of the movement of money is preceded by their concentration in the subjects (in the wallets of the population). In order for the movement of money to arise, the need for money must arise from one of the two parties.
The demand for money arises in the implementation of transactions, money is needed for circulation, payments for goods and services. Their volume is determined by the nominal gross domestic product. Demand for money is also presented for accumulation, which appears in various forms: deposits of credit institutions, securities, official state reserves.
Money circulation is carried out in two forms: cash and non-cash.
CASH CIRCULATION - the movement of cash in the sphere of circulation and their performance of two functions (means of payment and means of circulation).
Cash is used:
For the circulation of goods and services;
For settlements not directly related to the movement of goods and services, namely: settlements for the payment of salaries, bonuses, allowances, pensions, for the payment of insurance compensation under insurance contracts; on payments of the population for utilities, etc.
Cash turnover includes the movement of the entire cash supply for a certain period of time between the population and legal entities (between individuals, between legal entities, between the population and the state, etc.).
Cash flow is carried out with the help of various types of money: banknotes, metal coins, other credit instruments (bills, checks, credit cards). The issue of cash is carried out by the Central Bank of the Russian Federation. It issues cash into circulation and withdraws it if it has become unusable, and also replaces money with new samples of banknotes and coins.
Cash circulation is regulated by the Civil Code of the Russian Federation.
NON-CASH CIRCULATION is a change in the balance of funds in bank accounts, which occurs as a result of the execution by the bank of the instructions of the account holder for payment, mutual settlements through transfers from one account to another.
All issues with the regulation of cashless payments are established by the Central Bank of the Russian Federation in accordance with the law. It defines the rules, forms, terms and standards for non-cash payments. The law provides for a total term for non-cash payments of no more than 2 business days within the subject of the Federation and five within the Russian Federation.
The following forms of non-cash payments are used:
payment orders, payment requests (collection);
letters of credit;
settlement checks;
electronic payments.
4.3. Theory of money. money supply
Commodity-money relations require a certain amount of money for circulation. The law of money circulation, discovered by Karl Marx, establishes the amount of money needed to perform the functions of a medium of circulation and a means of payment.
The quantity of money (function: money as a medium of exchange) depends on three factors:
the quantity of goods and services sold on the market;
the level of prices for goods and tariffs;
velocity of money circulation.
All these factors are determined by the conditions of production.
The formula is:
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K - the sum of the prices of goods sold on credit, the payment deadline for which has not come.
P - the amount of payments on debt obligations.
VP - the amount of mutually repaying payments.
S.o. - the average turnover of money as a means of circulation and means of payment.
In a simplified form, this formula can be represented as follows:
M*C D= S.o.
M is the mass of goods sold, C is the average price of goods, S.o. is the average turnover rate.
Transforming this formula, we obtain the equation of exchange: D*S.o.=M*C, which means that the product D*S.o. is equal to the product of the price level by the mass of goods.
When there are crisis phenomena in the economy, this equality is violated, money depreciates, which can be expressed in the formula:
D*S.o.M*C (inflation).
MONEY SUPPLY - a set of purchasing, payment and accumulated funds serving various communications and belonging to individuals and legal entities and the state.
In economically developed countries, and later in Russia, monetary aggregates began to be used in financial statistics to analyze changes in the money supply on a certain date and for a certain period:
M0, M1, M2, M3, M4
M0 includes cash, i.e., outside banks - banknotes, metal coins M1 = M0 + funds on settlement, current and special accounts in credit institutions, in deposits of the population and enterprises in banks, as well as on demand deposits of the population in Sberbank.
M2 = M1 + time deposits of the population in Sberbank.
Đś3 = Đś2 + certificates and government bonds.
M4 = M3 + various forms of deposits in credit institutions.
4.4. Inflation, its types and types
INFLATION - the depreciation of money, manifested in the form of an increase in prices for goods and services, not due to an increase in their quality.
The inflation rate is influenced by many factors that can be divided into groups:
1. INTERNAL FACTORS:
1) Non-monetary - this is the cyclical development of the economy, the monopolization of the state, state-monopoly pricing, etc.
2) Monetary - the crisis of public finances: budget deficit, the issue of money, the growth of public debt, etc.
2. EXTERNAL FACTORS - world structural crises (raw materials, energy, currency), illegal export of gold, currency, etc.
TYPES OF INFLATION
1. Creeping (moderate) - the annual rate of price growth from 3% to 5-10% is typical for economically developed countries, considering it as an incentive for production;
2. Galloping - the average annual growth rate of prices from 20% to 100% (sometimes up to 200%), and prevails in developing countries, causes concern in society;
3. Hyperinflation - an increase in prices of more than 1000% per year or more than 50% per week, occurs under extraordinary conditions as a result of a radical breakdown of the entire economic structure of the country and leads to the disorganization of production and the market.
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SECTION 5. INSURANCE
According to scientists, insurance is one of the oldest categories of social relations. It is assumed that the original meaning of this concept was associated with the word "fear". People felt fear for their property, thought about its preservation, about how it would not be stolen, so that it would not suffer from a natural disaster. However, one cannot speak only in the past tense - since the very concept of insurance was born, fear itself has remained so.5.1. The essence of insurance and the history of its development
In those days when there was no capitalism yet, the main form of insurance was mutual assistance. She was one-time. Scientists suggest that the primary forms of insurance met several millennia before our era.
So, the laws of the Babylonian king Hamurabi provided for agreements between the participants in the trade caravan. They said that all merchants were obliged to bear together the losses that befell someone along the way from the attack of robbers, theft, natural disaster, etc.
In the future, insurance began to acquire a more perfect form. It was built on the basis of regular payments, which, in turn, led to the accumulation of funds and the creation of an insurance fund. Similar organizations existed, for example, in ancient India and ancient Egypt. Basically, these were mutual aid organizations of artisans and merchants.
The emergence of insurance in Russia is associated with the monument of ancient law "Russian Truth" (X-XI centuries). It spelled out the rules regarding material compensation for harm by the community in the event of a murder, and you can also find all the elements of a civil liability insurance contract.
At the state level, insurance in Russia began to develop since the time of Catherine. At the beginning of the X|X century. insurance appears as a form of commerce. The first insurance companies - "Salamander", "Russia", "Rossiyskoe Obshchestvo" and others.
specialized in fire insurance.
In St. Petersburg, and then in Moscow, since 1869, mutual aid societies began to emerge on a professional basis. In the XIX century. there are also the first cases of workers' insurance.
The main event in terms of social insurance of workers in Russia in the early twentieth century. was the law of 1912, according to which social insurance became state.
During the Soviet period, insurance was monopolized by the only insurer - Gosstrakh. The situation began to change after the legalization of entrepreneurship.
In 1996, the Government of the Russian Federation adopted a resolution “On Priority Measures for the Development of the Insurance Market in the Russian Federation”.
In 1997, a special target program for insurance and reinsurance of risks against major industrial accidents, catastrophes and natural disasters was developed. But one cannot speak about the final formation of insurance in Russia.
Improvement of the insurance market continues.
5.2. Essence of insurance
INSURANCE is an economic category, a system of economic relations that includes a set of forms and methods for the formation of trust funds of funds and their use to compensate for damage caused by various unforeseen adverse events, i.e.
FUNCTIONS OF INSURANCE
1. Formation of a specialized fund of funds as a payment for the risks that insurance companies take on their responsibility. This function is implemented in the system of reserve and reserve funds, which ensure the stability of insurance, the guarantee of payments and compensation for losses.
2. Compensation for damage and personal material support of citizens. Only individuals and legal entities that are participants in the formation of the insurance fund have the right to compensation for damage to property. The procedure for reimbursement is determined by insurance companies based on the terms of insurance contracts, and is regulated by the state.
3. Prevention of an insured event and minimization of damage. This function involves a wide range of measures, including the financing of measures to prevent or reduce the negative consequences of accidents and natural disasters (prevention). In order to implement this function, the insurer forms a special monetary fund for preventive measures.
CLASSIFICATION OF INSURANCE
1. According to the form of organization:
1) State insurance is an organizational form, where the state acts as an insurer in the person of organizations specially authorized for this. The circle of interests of the state includes its monopoly on carrying out any or certain types of insurance (the law on the status of insurance activities).
2) Equity insurance is a non-state form, where private capital acts as an insurer in the form of a joint-stock company, the authorized capital of which is formed from shares and other securities.
3) Mutual insurance - a non-state organizational form that expresses an agreement between a group of individuals, legal entities to compensate each other for future possible losses in certain shares according to the accepted conditions. This form of insurance is non-commercial, i.e.
e. This activity does not pursue the goal of making a profit.
4) Cooperative insurance is a non-state organizational form.
It consists in carrying out insurance operations by cooperatives.
5) Medical insurance is a special organizational form of insurance activity. In Russia, it acts as a form of social protection of the interests of the population in the protection of health. Its purpose is to guarantee citizens, in the event of an insured event, receiving medical care at the expense of accumulated funds.
2. By industry:
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1. INSURED - a natural or legal person who pays cash contributions and has the right, on the basis of an agreement, to receive a sum of money upon the occurrence of an insured event.
2. INSURER (underwriter) - a legal entity that conducts insurance and assumes the obligation to compensate for damage or pay the sum insured. The insurer is obliged to pass state registration and have a license for insurance.
3. INSURANCE AGENTS AND INSURANCE BROKERS.
Insurance agents - representatives of the insurer, insurance brokers - representatives of both the insurer and the insured. Agents and brokers work for a commission.4. INSURED – a natural person in whose favor the insurance contract is concluded. In practice, the insured person can be the insured at the same time if he pays cash (insurance) contributions.
5. BENEFICIARY:
1) the recipient of the benefit in the event of the death of the insured.
2) the recipient of the payment appointed by the owner, or the owner of the property himself.
6. THIRD PARTY:
1) a person who has suffered damage by a person insured against liability risk.
2) guilty of payment of personal and property insurance.
5.4. Basic concepts of insurance
1. OBJECT OF INSURANCE - a material carrier of insurance protection:
life, health, ability to work - in personal insurance; buildings, equipment, vehicles and other material assets - in property insurance).
The insurance coverage of an object is limited to the extent that the insured objects are located.
2. INSURED EVENT - an event upon the occurrence of which the insurer is obliged to pay the insurance indemnity or security to the insured, subject to the timely payment of insurance premiums. The randomness of an insured event lies in the fact that insurers sell a service about which nothing is known in advance (where, when it will happen, and what objects will be damaged).
3. INSURANCE PREMIUM (payment, installment) – paid insurable interest, payment for insured risk in cash. The insurance premium is paid by the policyholder and paid to the insurer in accordance with the insurance contract. It is paid in a lump sum in advance when entering into insurance relations ml in installments (monthly, quarterly) during the entire period of insurance. The amount of the insurance premium is reflected in the insurance policy.
4. INSURANCE POLICY - a standard document issued by the insurer to the insured. Certifies the concluded insurance contract and contains all its conditions.
5. SUM INSURED - the amount of money for which material values, life, health, work capacity are insured.
6. INSURANCE TERM – the time interval during which the objects of insurance are insured. It can vary from a few days to several years.
7. RIGHT TO REGRESS - the right to present a recourse claim of the insurer against the guilty party.
8. FRANCHISE - the minimum part of the loss, not compensated by the insurer, incurred by the insured. Established voluntarily and fixed in the contract. The deductible rate can be determined: 1) as a percentage of the sum insured; 2) as a percentage of the amount of insured loss. When applying a franchise, the insurer receives a discount from the insurance tariff.
Conditional franchise: the insurer is released from liability if the damage does not exceed the amount of the franchise; if the damage exceeds the amount determined by the deductible rate, the insurer pays the insurance indemnity in full.
Unconditional deductible: the insurer pays the insured compensation for the loss minus the deductible amount.
5.5. Insurance systems
1. Insurance at the actual value of the property (damage = compensation).
2. Insurance under the system of proportional liability (incomplete, partial insurance of the object). In this case, the amount of insurance compensation is reduced in proportion to the share of the sum insured in the actual value of the object:
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3. Insurance under the first risk system. In this case, the insurance indemnity is paid in the amount of damage, but within the sum insured.
Damage in excess of the sum insured is not paid at all.
4. Insurance at replacement cost. In this case, the insurance indemnity is equal to the price of a new property of the corresponding type. But insurance premiums will be higher than with other insurance systems.
SECTION 6. BANKING AND CREDIT SYSTEM
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The banking system in the Russian Federation since 1991 has been two-tier:
1. The only state bank is the Central Bank of the Russian Federation.
2. Commercial banks.
The CENTRAL BANK is a monetary institution located at the top level of a two-tier banking system and performing the tasks of the emission center of the country. "The Bank of Banks", the government's bank, the country's main clearing house and economic regulator.
The Central Bank of the Russian Federation is the main bank of the country, a single issue and settlement center. The Central Bank of the Russian Federation is an economically independent institution, i.e., it carries out all expenses at the expense of its own income. The state is not liable for the obligations of the Central Bank of the Russian Federation and the Central Bank is not liable for the obligations of the state.
The legal status of the Central Bank of the Russian Federation is enshrined in the Constitution and the law "On the Central Bank (Bank of Russia)".
FUNCTIONS OF THE CBR
1. Ensuring stability and purchasing power, as well as the exchange rate of the national currency.
2. Ensuring the stability of the functioning and liquidity of the banking system.
3. Ensuring the efficiency and reliability of the country's payment system.
OBJECTIVES OF THE CBR
1. Monopoly issue of banknotes.
2. Monetary regulation.
3. Central Bank of the Russian Federation - "bank of banks".
4. Central Bank of the Russian Federation - the bank of the government.
5. Externally economic, i.e. the Central Bank of the Russian Federation is a currency control body.
The Central Bank is accountable to the State Duma of the Federal Assembly of the Russian Federation, which, on the proposal of the President, appoints the Chairman of the Central Bank of the Russian Federation and members of the supreme body of the Central Bank of the Russian Federation - the Board of Directors for 4 years. The Duma considers the annual report of the Central Bank of the Russian Federation and the auditor's report. It also determines the audit firm for the Central Bank of the Russian Federation. The Chairman of the Council is the Chairman of the Central Bank of the Russian Federation.
The goals of the council are:
1. Consideration of the concept of development and improvement of the banking system.
2. Formation of the draft of the main directions of monetary policy.
3.Determination of the currency regulation policy.
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RCC RCC RCC
RUTSB - regional departments of the Central Bank of the Russian Federation RCC - cash settlement centers Territorial institutions of the Central Bank of the Russian Federation do not have the status of a legal entity and do not have the right to make decisions of a regulatory nature, as well as issue guarantees and sureties without the permission of the board of directors.COMMERCIAL BANK - a monetary enterprise located at the lower level of a two-tier banking system and engaged in the provision of services on a paid (commercial) basis of banking services to individuals in legal entities in conditions of market competition with other commercial banks.
FUNCTIONS OF A COMMERCIAL BANK
1. Intermediation in a loan - banks redistribute mostly not their own capital, but temporarily free funds attracted from individuals and legal entities.
2. Stimulation of savings - banks are interested in individuals and legal entities in keeping funds in bank accounts. For this, a flexible deposit policy is used, for example, the longer the storage period. The higher the bank interest on the deposit.
3. Mediation in payments.
PRINCIPLES OF OPERATION OF A COMMERCIAL BANK
1. Working within the limits of actually attracted resources means that a commercial bank must not only ensure a quantitative correspondence between resources and credit investments, but also a correspondence in terms of attracting resources and their placement.
2. Full economic independence of a commercial bank, which implies not only the ability of banks to determine the resource base and the nature of its placement, but also provides for economic responsibility, which extends not only to the bank's income, but also to all its property, i.e.
The bank assumes the entire risk of its operations.
3. Relationships between the bank and customers must be of a market nature, i.e. the bank pays interest to customers for keeping funds in bank accounts, regardless of the storage period, and customers pay the bank for any service provided by the bank.
4. Regulation of the activities of a commercial bank should be carried out by indirect economic rather than administrative methods, i.e. the state establishes the legal framework for the bank's activities and controls the implementation of this framework through the Central Bank of the Russian Federation. But the state should not give orders on the nature of the bank's activities.
According to the Law “On Banks and Banking Activities”, a BANKING OPERATION is a transaction, the object of which can be money, securities, precious metals and precious stones.
TRADITIONAL BANKING
1. Attracting deposits from individuals and legal entities.
2. Placement of attracted funds on its own behalf and at its own expense.
3. Opening and maintenance of bank accounts.
4. Implementation of settlements on bank accounts.
5. Collection.
6. Operations with foreign currency.
7. Operations with precious metals and stones.
8. Issuance of guarantees and guarantees.
9. Consulting and information services of the bank.
10. Work with plastic and credit cards.
NON-TRADITIONAL BANKING
1. TRUST - trust management of funds, securities and property of the client.
2. FACTORING - assignment of the rights of claim from the client to the bank, i.e., the redemption of receivables.
3. LEASING - long-term lease of property (from 6 months), providing for the possibility of their subsequent redemption by the tenant.
4. CHECKING ACCOUNT - current account + loan account.
5. OVERDRAFT - an ultra-short loan (from 1 hour to a decade), caused by a temporary lack of money.
In accordance with the law "On banks and banking activity"
provides for the procedure for state registration of a commercial bank and the issuance of a license to carry out banking operations.
A LICENSE is a special permit of the Central Bank of the Russian Federation, certifying the right of a commercial bank to carry out the banking operations specified in it, and is valid without a time limit.
TYPES OF LICENSING
1. License to carry out banking activities with funds in rubles (without the right to attract deposits from individuals).
2. License for the bank to carry out operations to attract deposits from the population.
3.Licence for the bank to carry out operations in foreign currency.
4.Licence to attract deposits and placement of precious metals.
5.License for cash collection.
6.Licence for the implementation of a bank loan.
7. General license.
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CREDIT - is the bank's operations for the placement of free credit resources on the terms of security, payment, repayment, urgency and the whole nature of use.
The need for a loan is caused by the circulation of funds.
FORMS OF LOAN
1. Commercial is a loan provided by one enterprise to another when selling goods, in the form of a deferred payment of money for the goods sold.
2. Banking - provided by a commercial bank to borrowers in the form of cash loans in accordance with the principles of lending.
3.Consumer - a loan, which consists in deferred payment for goods to individuals who have bought this product for consumption.
4. State - a loan received by the state as a result of issuing an internal or external loan) due to a budget deficit or to accelerate the pace of economic development.
5. International - the movement of loan capital in the field of international economic relations associated with the provision of goods or foreign exchange resources.
CREDIT FUNCTIONS
1. Redistribution. those. temporarily free funds accumulated in the bank are redistributed for reasons of profitability to the most financially stable, profitable, i.s. promising industries.
2. Cost savings, i.e. bank credit, contributes to the continuity of the enterprise's production activities and accelerates the turnover of funds and increases the amount of profit.
3. Accelerating the concentration and centralization of capital, i.e. a bank that issues loans only to creditworthy customers, not to bankrupts
4. Regulation of the country's economy, i.е. the state lends itself, and also develops a preferential lending system for strategically important sectors of the economy.
PRINCIPLES OF LENDING
1. Repayment - on the basis of a loan agreement between the bank and the borrower, and depending on the form of lending, the terms for repaying the loan are set (at a time or in part).
Short term
medium-term
Long-term For untimely repayment of the loan, the contract provides for sanctions.
In addition, at the request of the client, the contract can be extended, i.e.
the repayment period has been extended, for this an additional agreement is being drawn up and lending conditions are being tightened.
2. Urgency - the date of repayment of the loan and the frequency are fixed in the loan agreement, i.e. the date of payment of interest for it, in case of violation of the term for payment of interest, the bank has the right to demand early repayment of the loan. In case of violation of the loan repayment terms, the bank immediately starts selling the pledge (through 3 persons) or demands funds from the guarantor, insurance company, guarantor.
3. Payment - interest is fixed in the loan agreement, which the client is obliged to pay to the bank for using the loan. The agreement also specifies the amount of overdue interest in case of violation of the agreement.
4. Collateral - in order to guarantee the repayment of the loan and reduce the credit risk, the bank, at the time of issuing a loan, draws up a security with an additional document (collateral agreement, insurance policy, guarantee).
5. Target nature of use - at the time of issuing a loan, the client in the application, and then in the loan agreement, the purpose of lending is fixed, and the bank, transferring the loan debt to the client, checks the target nature of spending these funds.
Check mechanism
1. Current, i.e. each payment document of the client is endorsed for debiting funds, either from the current account or from the ship account.
1. Follow-up - the exit of the represented bank to the place and verification of compliance with the objectives of lending according to the internal and accounting data of the enterprise.
LENDING SYSTEM
The credit system is based on three main elements:
1. Depending on the subjects of lending, the bank classifies them in the following areas:
State enterprises, organizations and public authorities;
Joint ventures;
Legal entities of various forms of ownership;
Commercial banks;
Citizens engaged in individual labor activity;
Individuals;
The main thing is the legal capacity of the subjects and material or other guarantees of a credit transaction with them.
2. Objects of credit - these are specific items, but about which a credit transaction is concluded.
Object classification:
Material objects of a private nature:
Aggregate objects of lending;
Consumer objects:
A specific object of lending is seasonal sectors of the economy (river, sea transport; agriculture, etc.)
3. Types of lending:
a) By the terms of the loan
Overdraft - ultra-short-term loan;
Checking account - demand loan;
Revolving - a loan that is constantly renewed;
Credit line - i.e. not a one-time loan, but the distribution of the amount over time;
b) By purpose of lending
Loans for replenishment of working capital;
Loans for the development of production;
consumer loans;
For project financing, etc.;
c) Depending on the size
Large loans (more than 5% of the authorized capital);
STAGES OF THE LENDING SYSTEM
1. Preparatory - negotiations with clients, collection of information, reporting and other documents required for lending.
2. Analytical - analysis and consideration of a specific application and assessment of the client's creditworthiness.
3. Technical - the final decision on the issuance of a loan by the credit committee and the execution of loan documentation.
4. Control - organization of the process of monitoring the solvency of the client and his financial condition.
The credit policy of the bank is an internal document of the bank, which is formed before the start of the new financial year, approved by the board of the bank and is a mandatory guide when organizing credit operations in the bank.
STRUCTURE OF LENDING POLICY
1. The sphere of the economy is fixed, which lends to the bank in the coming period.
2. The maximum loan amount per borrower is fixed.
3. Requirements for repayment and loan security are established.
4. The mechanism of the lending process and the conditional level of interest rates are determined depending on the creditworthiness of the borrower
5. The powers are signed when a commercial bank decides to issue a loan.
6. The procedure and limit amounts for issuing loans to bank employees, founders, etc.
7. The mechanism for assessing the creditworthiness of the borrower is determined.
SECTION 7. SECURITIES MARKET
7.1. The essence of the securities market Regular transactions for the purchase and sale of securities form a MARKET
VALUABLE PAPERS.
STOCKS AND BODS MARKET
PRIMARY SECONDARY
ISSUER INVESTOR STOCK OTC
EXCHANGE AND MARKET
PRIMARY SECURITIES MARKET is a market where newly issued securities and securities of subsequent issues are sold. The primary market is the initial placement of securities, which are usually sold at par. An issuer and an investor operate in the primary market.SECONDARY SECURITIES MARKET is a market in which there is a transfer from hand to hand of securities that were previously issued (issued) and are already in circulation. In the secondary market, securities are sold at the market price or exchange rate. The market price in the secondary market is formed as a result of extensive trading, when many traders and buyers participate.
The subject of transactions in the primary and secondary markets are various types of securities.
A SECURITY PAPER is a document drawn up in a special way and expressing property or debt relations between members of society, banks, the state and confirming the right to any property or a sum of money that cannot be sold without the presence and presentation of an appropriate document.
SECURITIES MARKET PARTICIPANTS
ISSUER is a legal entity (commercial organization, executive authority, local government, etc.) that issues securities (shares, bonds, etc.) and bears obligations on its own behalf to the owners of securities to exercise the rights attached to them.
INVESTOR - a legal or natural person who invests his money in various types of securities in order to make a profit.
PROFESSIONAL PARTICIPANTS (INTERMEDIARY)
SECURITIES MARKET
BROKER - an intermediary who performs civil law transactions with securities as attorneys, acts on the basis of commission agreements, as well as powers of attorney for such transactions. Broker's income is commission.A DEALER is an intermediary that performs securities purchase and sale transactions on its own behalf and at its own expense by publicly announcing the purchase and sale prices of certain securities with the obligation to purchase or sell these securities at the announced prices. Dealer's income is the difference between the purchase and sale prices of securities.
BROKER - an employee of the exchange, his main function is to control the order in the exchange ring and the correctness of transactions.
MANAGER - receives the rights to perform transactions with securities in the interests of the client on his own behalf for a fee within a specified period. The manager can be a legal entity or an individual entrepreneur. The manager is obliged to compensate for any damage caused.
INVESTMENT COMPANIES AND FUNDS are professional stock market participants performing the following operations:
Determination of conditions and preparation of new issues of securities;
Purchase of securities from issuers for further resale to investors;
Guaranteed placement of securities.
JOBBERS - consultants on the problems of the securities market (evaluate the investment qualities of issued securities, help issuers organize new issues, make forecasts for changes in share prices, etc.) REGISTRARS - organizations that, under an agreement with the issuer, will leave the register (list of owners of registered securities ) compiled on a specific date.
There is no register for bearer securities.
DEPOSITORIES - organizations that provide services for the storage of certificates of securities and accounting for ownership of securities.
Depositories have supplanted registrars in developed countries.
SETTLEMENT AND CLEARING ORGANIZATIONS are specialized banking-type organizations that provide settlement services to participants in the organized securities market.
7.2. Share as a type of securities
A SHARE is a security that testifies to the contribution of a share in the authorized capital of a joint-stock company (hereinafter referred to as JSC), giving its owner the right to part of the JSC's property and participation in its management, as well as to receive dividends.
A share is valid for as long as the corporation that issued it exists, although its owner may change several times. Shares cannot be returned to the JSC that issued it. They can only be sold on the secondary market. The owner is entitled to a portion of the profits to be distributed and a portion of the value of the property that remains after the sale due to the bankruptcy of the company.
DETAILS OF SHARES
1. Company name of JSC and its location.
2. Name of the security - "Share".
3. Ordinal number.
4. Release date.
5. Nominal value.
6. Type of share (simple/preferred).
7. Name of holder/bearer.
8. The size of the authorized capital on the day of issue.
9. Number of issued shares.
10. Dividend payment period and its rate for preferred shares.
11. Signature of the chairman of the JSC and his seal.
PAR value of a share is the price at which a share is sold on the primary securities market (indicated for shares). The nominal value is valid only at the initial placement of shares. It is needed to characterize the authorized capital of a JSC.
DIVIDEND is a part of the distributed profit, which remains after the payment of taxes from JSC.
It can be paid in the form of:
cash payments
New shares (profit capitalization process)
Property (upon liquidation of the company)
Produced goods
SHARES CLASSIFICATION
1. According to the mode of operation:
Ordinary - a share, the dividend on which depends on the performance of the joint-stock company.
A common share can be of two classes. A class A ordinary share is a share held by the founders of the company. The owners of such shares have a number of advantages, for example, a larger number of votes, an increased dividend, etc.). Class B common shares are shares owned by other investors.
Preferred is a share for which the dividend is fixed and does not depend on the results of the JSC. The dividend is a certain amount of the par value of the share. The general meeting itself decides whether or not to issue preferred shares and to whom to sell them. Dividends on them are paid before payments on ordinary shares. If the JSC fails, then the owners of these shares are the first to be reimbursed, like the owners of bonds, but do not have the right to vote at the shareholders' meeting. The description of the privileges of this share is placed on the share certificate.
2. By the nature of the presentation:
A registered share is a share owned by a certain shareholder, which is registered in a special book O. The owner of a registered share receives another security from the JSC - a certificate for all acquired shares. It indicates the owner of the share and the number of shares. A registered share can be sold, in which case the sale is evidenced by an endorsement - a special endorsement on the share certificate, which indicates who and how many shares purchased.
Bearer shares are shares, the owners of which are not registered, the JSC does not have information about who owns them. The nominal value of such shares is small, but they are issued in large numbers.
SHARES PROPERTIES
1. A share is a title of ownership.
2. The share does not have a lifetime, i.e. the rights of the holder remain for the entire period of the JSC.
3. The share has limited liability, i.e. the shareholder will not lose more funds than he invested in the shares.
4. The indivisibility of a share, i.e., the ownership of shares is not connected with the division of rights between the owners, they all act as one person.
5. Splitting and consolidation of shares. Given the current situation, when determining the nominal price of shares, it is necessary to focus not so much on determining the need for financial resources of an enterprise, but on the effective demand of the population: the availability of free money and confidence in the products manufactured by this enterprise.
5.1. An enterprise can increase the number of investors by reducing the par value of shares, i.e., split shares (this is the so-called split) splitting shares: instead of withdrawn old shares, shareholders are given new shares for the same total amount, but with a smaller par value; used to reduce the supply of shares of this type. For example, instead of an existing share with a par value of 1000 rubles. upon splitting, the shareholder will be issued five shares with a par value of 200 rubles.
5.2. In conditions of inflation, if the company's shares are sold at too low a rate, the company's management may resort to consolidation. It is the opposite of a split, i.e. the number of shares decreases, which can lead to an increase in their market value. For example. With a consolidation ratio of 3, for every three shares of 500 rubles. the shareholder is provided with a par value of 1.5 thousand rubles.
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A BOND is a security that certifies the provision of a loan and gives the right to receive a fixed income for a certain period.
BONDS DESCRIPTION
1. Have the face value indicated on the title of the bond.
2. The amount of interest paid is indicated on the title.
3. They pay annually a fixed percentage of the face value of the bond, which is included in the company's costs.
4. Payment of interest is carried out before the payment of other payments on dividends. Failure to pay interest is equivalent to the bankruptcy of the company.
5. They are of an urgent nature, that is, after the expiration date, the bond is redeemed and the borrowed funds are returned to the owner.
6. Resellable.
7. The owner of the bond is the creditor of the company and does not have the right to vote at the meeting of shareholders.
8. A bond's redemption guarantee is the right of its owner to a part of the issuer's property.
BONDS CLASSIFICATION (TYPES)
1. In terms of company registration:
Registered bonds are bonds whose owners are registered. Income is credited to the account or a check is sent to the owner.
To bearer - bonds that have a special coupon sheet.
The owner cuts the coupon and presents it to the company for payment.
2. In terms of availability of collateral:
Secured - bonds that give its owner the right to claim the main property of the company (real estate, securities, etc.)
Unsecured - bonds that are issued only under the obligations of the issuer, that is, under his good name.
3. In terms of convertibility:
Convertible - bonds that after a certain period of time can be exchanged for a share of this joint-stock company.
Non-convertible.
4. In terms of interest calculation (coupon rate):
With a fixed percentage (decursive) - have a firmly fixed rate, can be withdrawn ahead of schedule.
With floating interest - for them, the rate changes in accordance with the rate of inflation, the revision of interest is carried out once within 1-3 years.
Zero-coupon (discount) – purchased at a price below face value and redeemed at face value. The difference between the purchase and sale prices is the discount percentage.
5. Terms of feedback:
Callable bonds are bonds that give the company the right to redeem the bond before it expires.
Irrevocable.
6. In terms of having an option:
With an option is a bond that gives the owner the right to return it to the company after a certain period of time (usually 3 years). The issuer must redeem it at face value. This is beneficial for the owner in case of inflation.
No option.
7.4. A promissory note as a type of securities A promissory note is a debt obligation issued for a short period of time. The bill is used:
As a means of payment;
As an instrument of credit relations;
as a form of guarantee.
BILL DETAILS:
1. Name "Promissory note".
2. An unconditional order to pay a certain sum of money.
3. Payer's name.
4. Payment term.
5. An indication of the place of payment and to whom the payment is to be made.
6. Date and place of drawing up the bill.
7. Signature of the issuer of the bill and its seal.
In the absence of any props, the bill is invalidated.
AVAL is a bill of exchange guarantee for the drawer, issued by a third party to increase the reliability of the bill.
ALLONJE is an additional sheet to the bill (or a designation on the reverse side).
ENDORSEMENT - an endorsement on the reverse side of the bill, which fixes the transfer of the right to claim on the bill from one person to another. The person making the endorsement is called the ENDORSER.
CLASSIFICATION OF BECKS:
1. Depending on the occurrence of debt and the functions performed:
Commercial - a debt obligation of a certain form, which appears as a result of a deferred payment for a commodity transaction. The debtor company does not pay money immediately, but issues a bill of exchange.
Commodity - a commercial security, the basis of which is the financing of commodity transactions. It formalizes the receipt of a loan provided by the seller of the goods to the buyer.
Financial - a bank security issued for the purpose of creating funds, is a receipt for a loan. A bank bill serves to attract temporarily free funds of individuals and legal entities on a short-term basis. Its main difference from a term deposit is that the owner of a bill of exchange can, with the help of endorsement, transfer it to someone in payment for services.
2. By the nature of the presentation:
Urgent - a bill with a due date in a certain number of days. Can be redeemed ahead of schedule by the bank. The size of the discount is set by the bank depending on the amount and term of circulation. Term notes are usually purchased by firms when they know exactly what day they will need the money.
At sight – a bill of exchange can be presented for payment on any day, starting from the day following the day of drawing up.
3. By type:
Simple (solo promissory note) - an IOU in which the debtor undertakes to unconditionally pay the agreed amount to the creditor after a certain period of time.
A bill of exchange (draft bill) is a strictly formatted financial document containing an unconditional order from the creditor (drawer) to the debtor (drawee) to pay a certain amount within a certain period of time to the creditor himself or to another person (remittent).
7.5. Other types of securities
1. DEPOSIT and SAVINGS CERTIFICATES, which are a written certificate of the issuing bank on the deposit of funds, certifying the right of the depositor (beneficiary) or his successor to receive the amount of the deposit (deposit) and interest on it after the expiration of the established period.
Only banks can act as issuers of deposit and savings certificates. Deposit certificates are intended exclusively for legal entities, and savings certificates - for individuals. Certificates must be current. Terms of circulation of certificates: deposit (from the date of issuance of the certificate to the day when the owner of the certificate receives the right to claim the deposit) - one year, savings - three years.
2. A CHECK containing a written request of the issuer of the check to the payer to pay the amount specified in it to the holder of the check is also a security. Checks are always written on forms prepared by banks. The drawer is the person who issued the check, the holder of the check is the person in whose name the check is issued, and the payer is the bank or credit institution in which the drawer has an account.
3. WAREHOUSE REPORT - a document certifying the storage agreement concluded between the parties, and
4. BILL OF LADING - a document of title certifying the right of its holder to dispose of the cargo specified in the bill of lading and to receive the cargo after the completion of transportation.
5. WARRANT - an additional certificate issued together with a security and giving the right to special benefits to the owner of the security after a certain period (for example, to purchase new securities).
6. DEPOSITARY RECEIPTS - a freely tradable security issued for shares of a foreign company deposited in a depository bank. In world practice, there are two types of depositary receipts:
American depositary receipts, which are admitted to circulation only on the American stock market;
Global Depositary Receipts that may be traded in other countries.
7.FUTURES - a document that provides for a firm commitment to buy or sell securities after a certain period at a predetermined price. Futures is one of the financial instruments for accounting for the future value of securities. An investor who receives a futures contract agrees to buy shares in the future, with the date of purchase fixed in the contract. The seller of the contract agrees to sell the securities after a specified period of time in the contract at today's price. Thus, a person planning to purchase securities in the future can avoid the risk that their price will increase. However, if the price of them falls, the buyer loses the opportunity to purchase these securities at low prices.
8.OPTION - a bilateral agreement on the transfer of the right to purchase (sell) securities at a pre-fixed price at a certain time. If the price of this security rises, the buyer uses the concluded option contract and buys the security at a price below the market price. If the price falls, the buyer may not exercise the option. Thus, by buying an option, the investor receives the right to buy from the seller of the option or sell him a specified number of securities at an agreed price or waive his right. For the option provided to the investor, he pays the seller of the option a premium - the price of the option paid by the buyer to the seller against the issuance of the option contract. There are two types of options based on expiration dates:
1) American - can be executed on any day before the expiration of the contract;
2) European - can be executed only in the laziness of the expiration of the contract.
9. SUBSCRIPTION RIGHTS is a short-term security certifying the pre-emptive right to purchase by shareholders of a new circulation of securities. Subscription rights arise when a company decides to issue a new issue of shares. With the involvement of new owners, the percentage of current owners is reduced. This is especially important for owners of a controlling stake.
There is a procedure (specified in the articles of association) whereby each former owner receives a certificate of rights showing how many newly issued shares he can buy and the selling price. The sale price is usually below the current share price, which is valid only for a month.
The owner must decide to buy him new shares, sell the right to subscribe, or ignore the offer. The certificate can be quoted along with the shares of this company on the market.
7.6. Stock exchange and features of its functioning
STOCK EXCHANGE is a part of the securities market organized in a special way, on which purchase and sale transactions are made with these securities through the mediation of members of the exchange. The peculiarity of exchange trading is that transactions are always made in the same place, at a strictly defined time - during a session (or exchange session) and according to clearly established rules binding on all participants. The exchange creates a clear organizational structure and mechanism for concluding and executing transactions with exchange values, as well as a reliable system for monitoring the result of executing transactions.
Basically, exchanges are created in the form of an association, a state institution or a joint-stock company.
The activities of stock exchanges in Russia are regulated by the Federal Law "On the Securities Market". A stock exchange may be recognized only as an organizer of trade in the securities market that does not combine the activity of organizing trade with other types of activity, with the exception of depository activities.
The stock exchange has the right to establish quantitative restrictions on the number of its members.
The stock exchange is obliged to ensure the transparency and publicity of the trading sessions by notifying its members about the place and time of the trading, about the list and quotation of securities admitted to circulation on the stock exchange, about the results of trading sessions, and also provide other information.
The supreme body of the exchange is the general meeting of its members, which resolves general financial and organizational issues and determines the internal regulations. Between meetings, the supreme body is the exchange board (committee, supervisory board), which exercises control over current activities, an executive directorate is created. Certain divisions are also created, each of which performs specific functions.
SECTION 8. CURRENCY AND FINANCIAL RELATIONS
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CURRENCY MARKET (1st approach) is a sphere of economic relations that manifests itself in the implementation of operations for the purchase and sale of foreign currency, securities in foreign currency, as well as operations for the investment of foreign exchange capital.
CURRENCY MARKET (2nd approach) is an official financial center in which transactions for the purchase and sale of currencies and currency values ​​are carried out.
FUNCTIONS OF THE FOREIGN MARKET
1. Timely implementation of international payments.
2. Regulation of exchange rates.
3. Insurance of currency risks.
4. Receiving profits of participants in the foreign exchange market in the form of a difference in exchange rates.
5. Conducting a monetary policy aimed at state regulation.
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TYPES OF CURRENCY MARKETS
1. World currency markets serve the movement of cash flows and goods, redistribute capital between countries. The movement of foreign exchange resources occurs through foreign exchange transactions, foreign investments, transactions with securities and foreign exchange and credit and settlement services for the purchase and sale of goods. The largest world markets: London, Paris, New York, Frankfurt, Singapore, Hong Kong.
1. National currency markets - ensure the movement of cash flows within the country and maintain communication with world currency centers.
2. Regional currency markets - serve communication between countries within a particular region.
Currency is a commodity in the foreign exchange market.
CURRENCY - the monetary unit of the country used in this state.
EXCHANGE RATE - the price of the monetary unit of one country, expressed in the monetary units of another country:
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An increase in the exchange rate means an increase in the value of the national currency in relation to a foreign one. A depreciation means a fall in the value of the national currency against a foreign currency.
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International currency and settlement relations, the procedure and scope of the use of foreign currencies by citizens and credit institutions are regulated by the Law of the Russian Federation "On currency regulation and currency control", as well as a number of instructions of the Central Bank of the Russian Federation and the State Customs Committee, the Law establishes the procedure for conducting currency transactions, types of currencies and currency values, the competence of the currency regulation and control bodies, the rights and obligations of residents and non-residents, their responsibility in relation to currency values.
Settlements between residents in the currency of the Russian Federation are carried out without restrictions, and the procedure for the acquisition of the currency of the Russian Federation by non-residents is established by the Central Bank of the Russian Federation.
Individuals can transport currency and currency values ​​subject to customs regulations.
The purpose of currency control is to ensure compliance with currency laws.
It is carried out by currency control authorities, which include:
Government;
Agents - organizations that are authorized to exercise the function of control (the State Customs Committee of the Russian Federation, the Federal Service for Currency and Export Control, the Ministry of Economic Development and Trade, authorized banks).
CURRENCY TYPES
1. Currency of the Russian Federation - rubles in circulation in the form of bank notes and coins; funds in rubles on accounts in banks and other credit institutions of the Russian Federation;
funds in rubles on the accounts of credit institutions located outside the Russian Federation on the basis of an agreement concluded by the Central Bank of the Russian Federation with the relevant authorities of a foreign state; securities in Russian currency,
2. Foreign currency - money in the form of banknotes and coins, which are in circulation in the relevant foreign state, as well as funds on accounts in monetary units of foreign states.
Currency values ​​are material objects involved in the sphere of international monetary and financial relations.
These include:
Foreign currency;
Payment documents in foreign currency (bills, checks, letters of credit);
Stock values ​​(shares, bonds);
Natural precious stones (diamonds, rubies, emeralds, sapphires, alexandrites, pearls) in their original and processed form;
Precious metals (gold, silver, platinum and platinum group metals)
- palladium, iridium, osmium, rhodium, ruthenium).
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CURRENCY OPERATIONS - these are operations related to the transfer of ownership of currency values, import and transfer to the Russian Federation, as well as export and deportation of currency values, international money transfers.
GROUPS OF CURRENCY OPERATIONS
1. Current - transfers to the Russian Federation and back of foreign currency when exporting or importing goods and services, making settlements related to loans for a period not exceeding 90 days; transfers to the Russian Federation and back of dividends, interest and other investment income; non-commercial transfers.
2.Capital - direct investment, portfolio investment; obtaining loans for a period of more than 90 days; granting a deferred payment for export-import transactions for a period of more than 90 days and other foreign exchange transactions.
Exchange operations of the "spot" type
The transaction with the immediate delivery of currency is carried out on the terms of SPOT.
The spot rate reflects how much the national currency is valued outside the country at the time of the transaction. The essence of "spot" transactions is the purchase and sale of currency on the terms of its delivery on the second business day from the date of the transaction, at the rate that is fixed at the time of its conclusion. The term for the delivery of the currency is called the value date - this is the date when the corresponding funds should actually be available to the parties under the transaction.
The "spot" conditions include the determination of the rate at the market rates of the day, or market quotations (setting the exchange rate of the national currency against the foreign one), which is reported by the media and the ticker.
A currency quote combines two sides:
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Direct quotation determines the price of foreign currency in one or another amount of domestic currency.
The reverse quotation determines the price of the national currency in a certain amount of foreign currency.
Currency quote contains 2 values:
–  â€“  â€“
$1 = 63.05/63.25 The difference between the currency buying and selling rates is the margin - this is the payment for the services and potential risks of an institution trading in currency.
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Currency position - the ratio of claims (bids) and liabilities of a commercial bank in foreign currency. If they are equal, the currency position is considered closed, and if they do not match, it is considered open. An open position can be short if the amount of liabilities in the sold currency exceeds the amount of claims, long if the amount of claims in the currency exceeds the amount of liabilities.
Example The bank had closed positions at the beginning of the day. During the day he sold $1,000, bought €20,000, bought €1,500, sold €10,000. Determine bank positions for each currency.
Solution $ - open, short.
€ - open, long
Open, long.
Determination of currency positions completes the bank's working day.
Cross-transactions Cross-transactions originated as the settlement of currency exchange between two persons through a third party. The quotation of two currencies, neither of which is the national currency of the participant in the transaction, is called the cross rate. Cross-rates are based on direct quotes of currencies in against the dollar.
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Arbitrage transactions CURRENCY ARBITRAGE - purchase of currency with its simultaneous sale in order to profit from the difference in exchange rates. Currency arbitrage is divided into spatial and temporal.
Spatial currency arbitrage is carried out according to the following scheme: a participant buys currency on the market at the spot rate. Then he makes a transfer of the purchased currency to another currency market and sells it at the "spot" rate of this market and makes a profit due to the difference in exchange rates.
Temporary arbitrage is an operation carried out for the purpose of profiting from the difference in exchange rates over time. Profit can be obtained if currency is purchased at the spot rate and the currency is placed on a deposit for a certain period, and then, at the end of the deposit term, the currency is sold at a different spot rate.
Example A market participant buys $50,000 on the exchange at the spot rate of 29 rubles/$ and enters into a contract to sell in 1 month at the rate of 29.5 rubles/$. The interest rate on the international currency market is 5.56% per annum. Calculate the profit from the arbitrage operation.
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BALANCE OF PAYMENTS is a systematic record of the results of all economic transactions between residents of a given country and the rest of the world or non-residents of other countries during a certain period of time (month, quarter, year).
The balance of payments reflects the quantitative and qualitative expression of the volume, structure and nature of the state's foreign economic operations.
At present, the main document regulating the methodology for compiling the balance of payments is the IMF's balance of payments manual. In accordance with this manual, the balance sheet is divided into
TWO PARTS:
1. Accounts of current operations (export-import movement of goods, balance of wages, balance of current transfers).
2.Accounts for the movement of capital.
SECTIONS OF THE BALANCE OF PAYMENTS
1. The current account balance of payments includes the trade balance, i.e.
the ratio between exports and imports of goods; balance of services (includes services combined by non-commodity nature of origin; transportation, export and import of licenses and patents; technology trade, foreign trade insurance operations, etc.) and non-commercial payments (balance of "invisible"
operations)
2. The balance of movement of capital and loans reflects payments and receipts on export-import of public and private long-term and short-term capital. This includes direct and portfolio investments, bank deposits, commercial loans, social financial transactions, etc.
REFERENCES
1. Neshitoy A.S. Finance, money circulation and credit: textbook / A.S.
Unsewn. – 4th ed., revised. and additional – M. : Dashkov i K, 2013.
2. Gorelik V.N. Finance: The system of money movement: monograph / V.N.
Gorelik. - M.: ITs RIOR: NITs Infra-M, 2012. - 150 p.
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