Home Salon International loan capital market. The essence of the loan capital market and its functions The economic role of the loan capital market

Salon

International loan capital market. The essence of the loan capital market and its functions The economic role of the loan capital market

FEDERAL EDUCATION AGENCY

STATE EDUCATIONAL INSTITUTION OF HIGHER PROFESSIONAL EDUCATION

ALL-RUSSIAN CORRESPONDENCE INSTITUTE OF FINANCIAL AND ECONOMIC

Department of Money, Credit and Securities

TEST

discipline: "Banking"

on the topic: “Loan capital market”

Introduction

Chapter 1. Loan capital market

Chapter 2. Credit system, characteristics of its links

Chapter 3. Securities market: concept, structure

Conclusion

List of used literature

Introduction

The capitalist mode of production dictates the need for the emergence and development of a loan capital market. Because during the reproduction process, individual firms, individuals and other participants in market relations have temporarily free capital in cash. The pursuit of profit forces the capitalist to invest temporarily freed capital in banks in his country and abroad to receive income in the form of interest. Banks, in turn, provide these funds to other market participants who need additional funds beyond what they currently have, at a higher interest rate. As a result of the separation of money capital from industrial capital, loan capital arises, which is money capital lent out on the terms of repayment and payment. Loan capital is a special historical form of capital inherent in the capitalist mode of production. The sphere of movement of loan capital is represented by the loan capital market.

Chapter 1. Loan capital market

The loan capital market is a system of economic relations that ensure the accumulation of free funds, their transformation into loan capital and its redistribution between participants in the reproduction process. This is a specific area of commodity relations in which the object of the transaction is the monetary capital provided on loan and the demand and supply for it is formed.

Under pre-monopoly capitalism, the loan capital market was poorly developed due to limited supply and demand for money capital. This was due to a number of reasons. The credit system was not yet able to widely accumulate monetary capital and monetary savings of the population, since it was represented mainly by banks, and other forms of credit and financial institutions were just emerging. Demand for money capital, mainly short-term, was presented by individual enterprises, while the state and the population turned to the loan capital market extremely rarely. Finally, the market for fictitious capital was just in its infancy.

Monopoly capitalism gave impetus to the development of the loan capital market. The creation of joint stock companies, high concentration and centralization of production, the development of new industries based on scientific and technical discoveries, the strengthening of the role of the state in the economy and a number of other reasons created a huge demand for loan capital. State-monopoly capitalism created the preconditions for further growth of the loan capital market. The governments of capitalist countries actively participate in the formation of economic policy, including credit. The state influences the loan capital market by establishing the discount rate of central banks, thereby regulating the supply and demand for loan capital. The creation of state credit institutions has led to the state acting in the loan capital market both as a buyer and as a seller. In the modern system of state-monopoly capitalism, the loan capital market promotes the growth of production and trade turnover, the movement of capital within the country, the transformation of monetary savings, the implementation of the scientific and technological revolution, the renewal of fixed capital, the consolidation of scattered individual monetary savings of society, saving public costs, etc. A feature of the development of the loan capital market at present is the strengthening of its role in the processes of internationalization of the world economy through capital migration.

The functions of the loan capital market are determined by its essence and the role it plays in the capitalist economic system, as well as its tasks in the reproduction process. There are five main functions of the loan capital market:

1) servicing commodity circulation through credit;

2) accumulation of monetary savings (accumulations) of enterprises, the population, the state, as well as foreign clients;

3) transformation of monetary funds directly into loan capital and its use in the form of capital investments or investments to service the production process.

These three functions began to be actively used in industrialized countries in the post-war period.

4) serving the state and the population as sources of capital to cover government and consumer expenses (given the huge role of the loan capital market in covering budget deficits and financing final consumption in the form of mortgage and consumer lending within the framework of state-monopoly capitalism).

In all four cases, the market acts as a kind of intermediary in the movement of capital.

5) acceleration of the concentration and centralization of capital for the formation of powerful financial and industrial groups.

These functions of the loan capital market are aimed at maintaining the capitalist mode of production and ensuring the functioning of the economic system of state-monopoly capitalism.

Reflecting the accumulation and movement of monetary capital, the loan capital market is organically connected with the movement of value in its monetary form, with the formation and use of various monetary funds in the form of credit resources and securities. Through the loan capital market as an economic category, it is possible to measure and determine the movement, volume, direction of monetary funds going towards the development of capitalist social reproduction, and its impact on socio-economic relations.

The modern structure of the loan capital market is characterized by two main features: temporary and institutional (Fig. 1).

Loan capital market

time factor

functional-institutional factor

money market

medium-term loans

long-term loans

credit system

stocks and bods market

primary

secondary

Rice. 1 - Modern structure of the loan capital market

The time attribute characterizes the period of time for which a loan, credit, loan is provided, and securities are issued. In accordance with this, the money market is distinguished, on which loans and credits are provided for a period of up to one year, and directly the capital market, where funds are issued for longer periods: from one to five years (medium-term loan market) and from five or more years (long-term loan market).

On a functional and institutional basis, the modern loan capital market implies the presence of two main links: the credit system (a set of various credit and financial institutions) and the securities market. The latter, in turn, is divided into the primary market, where new issues of securities are sold and purchased, the exchange market (secondary), where previously issued securities are bought and sold, and the over-the-counter market, where securities that cannot be sold on the exchange are sold. The over-the-counter market is also called the street market.

Temporary and functional-institutional characteristics of the loan capital market are characteristic of all countries. At the same time, the state of the national market is judged on an institutional basis, i.e. by the presence of two main tiers: the credit system and the securities market.

The most developed capital markets are the United States, Western Europe, Canada and Japan. These countries have extensive, flexible capital markets with well-developed two main tiers and an extensive network of various financial institutions. At the same time, the capital market in the United States is in a privileged position, since it is distinguished by a more extensive system of credit and financial institutions, their diversified activities, and an extensive, three-stage securities market.

Chapter 2. Credit system, characteristics of its links

The capitalist credit system is a set of banks and other financial institutions that accumulate and mobilize free cash capital and income and provide loans, as well as issue credit instruments of circulation.

The modern credit system includes two main concepts:

1) a set of credit, settlement and payment relations that are based on certain, specific forms and methods of lending (functional aspect). This concept is usually associated with the movement of loan capital in the form of various forms of credit.

2) a set of functioning financial institutions (institutional aspect). This means that the credit system, through its numerous institutions, accumulates free funds and directs them to enterprises, the population, and the government.

The essence and functions of credit are realized through the credit system. Credit is a form of movement of loan capital, that is, money capital that is lent out for a certain percentage on the terms of repayment. The essence of a loan is manifested in its functions: distribution, emission, control. In the first aspect, the credit system is represented by banking, consumer, commercial, government, and international credit. All these types of credit are characterized by specific forms of relationships and lending methods. These relations are implemented and organized by specialized institutions that form the credit system in the second (institutional) sense. The leading link in the institutional structure of the credit system are banks.

In the modern credit system there are three main links:

I. Central Bank and mixed state credit institutions;

II. Banking sector:

1) commercial banks;

2) savings banks;

3) investment banks;

4) mortgage banks;

5) specialized trading banks;

6) banking houses.

III. Insurance sector:

1) life insurance companies;

2) property and casualty insurance companies;

3) private pension funds.

IV. Specialized non-banking financial institutions:

1) investment companies;

2) financial companies;

3) charitable foundations;

4) savings and loan associations, building societies;

5) credit unions;

6) brokerage firms;

7) trust departments of commercial banks.

This scheme is called three- or four-tier (sometimes the third and fourth tier are combined into one - non-banking financial institutions). It is typical for most industrialized countries - mainly the USA, Western European countries, and Japan. The US credit system is the most developed. Therefore, all industrialized countries are guided by it when forming their credit system. In the credit system of Western European countries, the banking and insurance sectors have received the greatest development. Moreover, in Germany the banking sector is based on commercial, savings and mortgage banks. France is characterized by the division of the banking sector into depository (commercial) banks, business banks performing the functions of investment banks, and savings banks.

The modern credit system of Japan was formed according to the American model, and has a three-tier system. The most developed banking sector is based on urban (commercial), savings and investment banks. In the specialized sector, only insurance and investment companies are widespread.

The credit systems of developing countries are generally underdeveloped (mainly credit systems in developing countries in Africa). Most of these countries have a two-tier system, represented by a national central bank and a commercial banking system. At a higher level are the credit systems of Asian and Latin American countries. Particular attention should be paid to a number of Asian countries: South Korea, Singapore, Thailand, India, whose credit systems are quite developed, because They have a three-tier structure and are close in level to the credit systems of Western European countries. A number of Latin American countries – Mexico, Brazil, Peru – also have three-tier credit systems.

The credit system plays a vital role in maintaining a high rate of economic accumulation, which is typical for most industrialized countries. However, in the United States this figure is slightly lower than in other industrialized countries. This is explained primarily by the fact that the processes of accumulation of monetary capital in the United States were influenced by such factors as frequent fluctuations in market conditions, a high share of military expenditures in the national income and budget, a drop in the purchasing power of money, a large share of investments in the non-productive sphere, and the stability of the securities market. until the end of the 60s.

Credit plays an important role in solving the problem of selling goods and services on the market. The large increase in consumer and housing mortgage lending to the population significantly expanded the market for durable consumer goods and played a significant role in the rapid development of the relevant industries and construction.

The formation of international conditions for reproduction is also largely influenced by the development of credit relations in various forms and the activities of banks on the world stage. These factors contributed to the growth of international trade, which in turn boosted production.

Monetary crises, which usually accompany cyclical economic crises and significantly intensify them, were weakly expressed until the late 70s and early 80s. Their most acute forms - the pressure of depositors on banks, the massive demand for loans, the bankruptcy of banks - were virtually absent until this time. This was explained by many profound changes in the economy, in particular, an increase in the elasticity of the monetary system in the absence of a gold standard, changes in the structure of credit institutions and the loan capital market, and state monopoly regulation.

At the same time, the credit system in the post-war period greatly contributed to increased concentration and monopolization of the economy, deepening the social and property gap between different strata of society. More specifically, the following factors can be mentioned. The stock business, which is a unique form of credit business, has been the source of a colossal increase in the personal fortunes of the wealthiest people in society during the last two decades. At the same time, the accumulation of workers' savings by the credit system chained the latter to the existing capitalist system and therefore often served as an instrument of additional financial exploitation. The latter became especially obvious and effective in connection with inflation, which continuously devalued savings according to their real purchasing power, especially in the 70s. The credit system also exploited workers as debtors by charging extremely high interest rates on consumer and mortgage loans.

Although the credit system did not experience any problems in the period 1980-1982. acute “traditional” crises, as in 1929-1933, the credit expansion of banks, the growth of the credit superstructure, the swelling of mortgage and consumer loans required the state to take urgent measures to prevent a crisis in the credit sector, which was closely related to the crisis of the international monetary system.

While there are general patterns of development, the credit systems of individual countries have their own characteristics. In the 19th century England had the most developed and extensive credit system. Now the United States is such a leader in many respects. Other capitalist countries often seek to adopt the organizational forms and methods of American financial institutions, especially investment and insurance companies, corporate pension funds, and consumer credit organizations. At the same time, a number of countries in Western Europe are characterized by state credit institutions of a larger scale and universal nature than in the United States.

The processes of concentration in the banking sector, which largely determine the development of the credit system, have a number of important features in the post-war period. Significant changes are also taking place in the operations of banks and, in particular, in the forms of their relations with industry. Characteristic is a combination of universalization tendencies, i.e. expansion and combination of functions, and specialization, or the allocation of special types of financial institutions with their own specific functions. They are especially widespread in such areas as attracting small savings, loans secured by land and real estate, consumer loans, loans to agricultural producers, financing and settlement operations in foreign trade, capital investment and placement of securities of industrial companies. One of the most important trends in recent years in the development of credit systems in developed foreign countries is the blurring of differences between certain types of banks, between banks and non-bank credit organizations. The global trend towards universalization of the activities of large banks is successfully combined with the continued specialization of a number of credit institutions in certain types of banking operations.

The main link of the credit system is the banking system - the totality of all banks in the national economy. There are one- and two-tier banking systems. A characteristic feature of a one-tier banking system is that all banks perform similar functions. In a two-tier banking system, there is a strict division of functions between the central and commercial banks. Currently, in almost all countries with developed market economies, the banking system has two levels. The first level of the banking system is formed by the central bank (or a set of banking institutions that perform the functions of a central bank, for example the US Federal Reserve System). It is legally assigned a monopoly on the issue of national banknotes and a number of special functions in the field of monetary policy. The Central Bank acts as the official conductor of monetary policy. In turn, monetary policy, along with budgetary policy, forms the basis of all state regulation of the economy. Therefore, the effective functioning of the central bank is one of the conditions for the effective functioning of a market economy.

The first central banks arose more than 300 years ago. The Bank of England, created in 1694, is considered the first issuing bank, since it was the first to issue banknotes and discount commercial bills. Central banks gained widespread distribution and modern significance only in the 20th century.

Central banks can be state-owned, joint-stock or have a mixed form of capital ownership, when part of the capital of the central bank is owned by the state, and part is in the hands of legal entities and/or individuals. Regardless of the form of ownership, historically there have been close ties between the central bank and the government, especially strengthened at the present time. However, the central bank is a legally independent entity and has relative independence from the executive branch.

The central bank is faced with the task of ensuring the stability of purchasing power and the exchange rate of the national currency, the stability and liquidity of the banking system, the efficiency and reliability of the payment system. To solve this problem, the central bank is assigned the following functions: monopoly issue of banknotes; monetary regulation; foreign economic; function of the bank of banks; government banking function.

The Central Bank carries out its functions through banking operations: passive, with the help of which banking resources are formed: issuing banknotes (accounting for from 40 to 85% of all liabilities), accepting deposits from commercial banks and the treasury, operations for the formation of equity capital; and active - operations for their placement: accounting and lending operations (represented in the form of accounting operations and short-term loans to the state and banks), investments in securities, operations with gold and foreign currency.

The second level of the two-tier banking system is occupied by commercial banks. They concentrate the bulk of credit resources and carry out a wide range of banking operations and financial services for legal entities and individuals. The tasks of banks are to ensure uninterrupted cash flow and capital circulation, lending to industrial enterprises, the state and the population, and create conditions for national economic accumulation. The main functions of commercial banks are: mobilization of temporarily free funds and converting them into capital; lending to enterprises, the state and the population; issue and placement of securities; carrying out settlements and payments on the farm; creation of means of payment; consulting, provision of economic and financial information; carrying out operations for the cash execution of the federal budget and the budgets of the republics on behalf of the central bank.

Passive operations of commercial banks include: accepting deposits, issuing their own securities, obtaining interbank loans, eurocurrency loans, repo operations, opening and maintaining customer accounts; Active operations include accounting and loan operations (forming the bank’s loan portfolio), investment operations (forming the investment portfolio), cash and settlement operations, and others.

The modern credit system of capitalist countries in the post-war years has undergone serious structural changes: the role of banks has decreased and the influence of other credit and financial institutions (insurance companies, pension funds, investment companies, etc.) has increased. This was expressed both in an increase in the total number of new financial institutions and in an increase in their share in the total assets of all financial institutions. Such evolutionary processes have also affected many developing countries.

Important processes in the modern credit system of capitalist countries were:

Concentration and centralization of banking capital;

Further strengthening of competition between different types (species) of credit and financial institutions;

Continued merging of large credit and financial institutions with powerful industrial, trading, transport corporations and companies;
- internationalization of the activities of credit and financial institutions and the creation of international financial and credit associations and groups.

The credit system operates through a credit mechanism. It represents, firstly, a system of connections for the accumulation and mobilization of monetary capital between credit institutions and various sectors of the economy; secondly, the relations associated with the redistribution of monetary capital between the credit institutions themselves within the framework of the existing capital market, and thirdly, the relations between credit institutions and foreign clients.

The credit mechanism also includes all aspects of lending, investment, founding, intermediary, advisory, accumulation, redistribution activities of the credit system represented by its institutions.

In the post-war period, the credit system helped provide conditions for significant growth in production, capital accumulation and the development of scientific and technological progress. Thanks to credit, in its various forms, there is a mobilization of money capital and a huge concentration of capital investments in key, technically the most progressive sectors of the economy. Only powerful banks and insurance companies can carry out credit operations on the scale necessary to finance modern large industrial, transport and other facilities. Government funds involved in financing capital investments also often come to the economy in the form of credit.

The monopoly stage of capitalism led to the emergence of new credit and financial institutions, which began to develop rapidly after the crisis of 1929-1933. There has been a more complete delineation of functions between various financial institutions within the credit system. Insurance companies (mainly life insurance companies), pension funds, investment companies, savings and loan associations, and other specialized institutions quickly grew and took major positions in the capital market. They have become the main source of long-term capital in the money market, displacing commercial banks in this area.

However, the fall in the share of commercial banks does not mean a decrease in their role in the economy. They continue to perform the most important functions of the credit system: settlement operations, deposit and check issue, short-term and medium-term financing, as well as a certain part of long-term financing.

Credit and financial institutions carry out their functions in the economy in three main areas: 1) providing loan capital to industry and the state; 2) accumulation of free monetary capital and monetary savings of the population; 3) ownership of fictitious capital. A wide network of specialized credit and financial institutions made it possible to collect free cash capital and savings and make them available to commercial and industrial corporations and the state. Thus, the development of the credit system was one of the most important prerequisites for ensuring a relatively high rate of capital accumulation, which contributed to the growth of production and the implementation of the scientific and technological revolution.

Chapter 3. Securities market: concept, structure

The securities market is a set of economic relations that arise between various economic entities regarding the mobilization and placement of free capital in the process of issuing and circulating securities.

A special feature of the securities market is that a specific product is traded on it - securities, which in themselves have no value. However, they are titles of property, behind them there are real assets, which mainly determine the value of specific securities.

The securities market performs a number of functions that can be divided into two groups:

1) general market functions inherent in each market:

Commercial function, that is, making a profit from operations in a given market;

The price function, with the help of which the process of formation of market prices and their constant movement are ensured;

Information function - the market produces and communicates to its participants market information about the objects of trade and its participants;

Regulatory function - creating rules for trade and participation in it, the procedure for resolving disputes between participants, setting priorities, control or management bodies;

2) specific functions that distinguish it from other markets:

The redistribution function ensures the redistribution of funds between industries and areas of market activity and financing of the budget deficit;

The function of insuring price and financial risks, which became possible thanks to the emergence of a class of derivative securities: futures and auction contracts.

One of the main functions of the securities market is to mobilize investors' funds for the purposes of organizing and expanding production. Thus, the existence of a securities market contributes to the formation of an efficient and rational economy.

The securities market can be classified according to various criteria, depending on which the market structure can be presented from different points of view.

Based on the stages of issue and circulation of securities, a distinction is made between primary and secondary markets. The primary market is the market in which a business sells securities to the original owners. This type of activity is called placement of securities. Due to this, the enterprise attracts financial resources for the purposes of its development. The most important feature of the primary market is full disclosure of information to investors, allowing them to make an informed choice of security for investment. All activities in the primary market serve to disclose information: preparation of the prospectus, its registration and control by state authorities from the standpoint of completeness of the data presented, publication of the prospectus and subscription results, etc.

The secondary market is the market on which securities are traded, i.e. investors sell securities to each other. In the secondary market, there is no accumulation of funds for the enterprise, but a redistribution of funds between investors.

Both of these concepts are closely related. Without a primary securities market, which supplies stock values for circulation, there cannot be a secondary market. Without a full-fledged secondary market, it is impossible to talk about the effective functioning of the primary market and the securities market in general. The secondary market, creating a mechanism for carrying out transactions with securities, strengthens investor confidence in the securities market, stimulates their desire to acquire stock values, and contributes to a more complete accumulation of society's resources in the interests of expanded reproduction.

Depending on the presence of established trading rules, organized and unorganized markets are distinguished.

Based on the organization of trading in securities, a distinction is made between exchange and over-the-counter markets. The exchange market is an organized securities market, transactions for the purchase and sale of which are carried out on the exchange in strict accordance with established rules. The exchange market trades in securities of the most reliable issuers, which are admitted to the exchange only after passing a certain selection procedure, and their activities are constantly monitored by the exchange. The over-the-counter market is the trading of securities without going through the stock exchange.

Based on the terms of execution of transactions, a distinction is made between the cash market with immediate execution within one or two business days and the urgent market with an execution period exceeding two business days.

The securities market plays the role of a regulator of investment flows and makes it possible to ensure an optimal structure for the use of resources for society: through it, the redistribution of cash savings is carried out in industries that provide the greatest return on investment. In addition, securities markets make it possible to ensure the massive nature of the investment process, allowing any economic entities (including those with a nominally small investment potential) to make investments - both financial and real when purchasing shares of a new issue.

Conclusion

In the modern system of state-monopoly capitalism, the loan capital market promotes the growth of production and trade turnover, the movement of capital within the country, the transformation of monetary savings, the implementation of the scientific and technological revolution, the renewal of fixed capital, the consolidation of scattered individual monetary savings of society, saving public costs, etc.

The credit system plays a vital role in maintaining a high rate of national economic accumulation. At the same time, the credit system in the post-war period greatly contributed to increased concentration and monopolization of the economy, deepening the social and property gap between different strata of society.

In a market economy, the securities market is the main mechanism for the redistribution of monetary savings. Through the securities market, monetary savings of legal entities, individuals and the state are accumulated and directed towards production and non-production investment of capital. The stock market creates a market mechanism for the free, albeit regulated, flow of capital into the most efficient sectors of the economy.

List of used literature

1. Banking: Textbook / Ed. O.I. Lavrushin. - M.: “Finance and Statistics”, 1998.

2. Money, credit, banks: Textbook / Edited by E.F. Zhukova. - M.: UNITY, 2005.

3. Money. Credit. Banks. Securities. Workshop: Proc. manual for universities / Ed. prof. E.F. Zhukova. – M.: UNITY-DANA, 2001.

4. Finance. Money turnover. Credit: Textbook / Ed. prof. G.B. Pole. - M.: UNITY, 2001.

Tutoring

Need help studying a topic?

Our specialists will advise or provide tutoring services on topics that interest you.
Submit your application indicating the topic right now to find out about the possibility of obtaining a consultation.

Lent for a certain percentage subject to repayment. The form of movement of loan capital is credit. Loan capital is a special historical category of capital that arises and develops under the conditions of the capitalist mode of production.

The main sources of loan capital are monetary capital (money) released in the production process. These include:

depreciation fund of enterprises for renewal, expansion and restoration of fixed assets;
part of the working capital in cash, released in the process of selling products and making material costs;
funds generated as a result of the gap between receiving money from the sale of goods and paying wages;
profit used to update and expand production;
cash incomes and savings of all segments of the population;
the state's monetary savings in the form of funds from the ownership of state property, income from production, commercial and financial activities of the government, as well as positive balances of the central and local budgets.

new relations associated with the process of ensuring the circulation of loan capital.

The main participants in this market are: primary investors, that is, owners of free financial resources, mobilized by banks on various conditions and converted into loan capital; specialized intermediaries represented by credit and banking institutions that directly attract funds and convert them into loan capital; borrowers– represented by legal entities and individuals, as well as states experiencing a temporary lack of financial resources.

The modern structure of the loan capital market is characterized by two main features: temporary and institutional.

By temporary sign a distinction is made between the money market, where short-term loans are provided (up to 1 year), and the capital market, where medium-term (from 1 to 5 years) and long-term loans (from 5 years or more) are issued.

By institutional feature The modern loan capital market presupposes the existence of a capital market (or securities market) and a borrowed capital market (credit and banking system).

Main functions loan capital market:

servicing commodity circulation through credit;
accumulation of cash savings of legal entities, individuals and the state, as well as foreign clients;
transformation of monetary funds directly into loan capital and its use in the form of investments to service the production process;
serving the state and population as sources of capital to cover government and consumer expenses;
accelerating the concentration and centralization of capital for the formation of powerful financial and industrial groups.

Introduction

1. The concept of the loan capital market and its structure

2. Banking system

Conclusion

Introduction

An integral part of a market economy is the state's monetary system. It is she who should be given a special role in organizing market relations in the country.

The transition to a market economy requires radical changes in the monetary sphere. There is an obvious need to implement fundamentally new methods in managing the country’s monetary circulation, credit mechanism, and other economic levers. The monetary system is of a transitional nature, is influenced by crisis phenomena in the economy, is undergoing radical restructuring and disruption, and has a number of significant shortcomings in its activities.

The adopted laws regulating the activities of the monetary system lay the foundations for the creation of a two-tier banking system. The transformation process is underway, but so far very slowly. The central banks of the republics are operating, and the network of commercial banks is expanding. However, the adoption of laws on the creation of a banking system is only the first step; a consistent government policy in this area is needed.

Reforming the credit system in the context of the transition to a market is proceeding in several interconnected directions: the first is improving the work of Central banks and their interaction with commercial banks; the second is the creation of new market structures in the credit system; third, ways to find effective use of these levers in the monetary sphere.

In any direction, there are a number of currently unresolved problems. But it should be taken into account that over a long period of time, a single economic space was created in our country, based on the social division of labor, specialization and cooperation of production. Within the boundaries of this space, a unified monetary system was formed.

Today, what is needed is not its destruction, but a “soft” qualitative transformation, so that this reorganized system fully contributes to the development of creative processes in the national economy. With the transition to new economic forms of relations, the relevance and importance of problems associated with loan capital increases enormously. This is explained by the fact that investment activity and savings, which serve as the main indicators and the link between the financial market and the real sphere of economic activity, depend on loan capital and its interest rates.

In a crisis situation, during inflationary processes, the value and importance of loan capital increases sharply.

Loan capital and credit are one of the components of financial relations that ensure the life and functioning of a market economy.

Under the influence of many factors, credit and financial relations undergo a number of changes, so the constant study of world experience in the market of loan capital and credit is of great interest in forming a position that will help determine fruitful steps in a difficult, modern market economy.

With the development of market relations in our country, the emergence of enterprises of various forms of ownership (both private and state, public), the problem of clear regulation of financial and credit relations of business entities acquires special importance.

Enterprises of all forms of ownership increasingly need to attract borrowed funds to carry out their activities and make a profit. The most common form of raising funds is obtaining a loan under a loan agreement.

A loan is a movement of loan capital provided as a loan on the terms of repayment for a fee in the form of interest. The need for credit is determined by the laws of circulation and circulation of capital in the process of reproduction. In some areas, free funds are released, serving as sources of loan capital; in others, the need for them arises. It is on this basis, on the mutual benefit of participants in the reproduction process, that loan capital is born, exists and develops.

From what sources is loan capital formed? Firstly, from funds released from the circulation of capital. Namely:

· funds for the restoration of fixed capital in the form of depreciation;

· part of the working capital in cash, released due to a discrepancy between the time of receipt of revenue and the implementation of costs;

· profit accumulated to expand and update production.

Secondly, from cash income and savings of the population. In the post-war period, the general trend in developed countries was the active use of savings in the form of deposits, insurance, and the purchase of securities. This was the result of a slight increase in wages, as well as changes in consumption patterns. The share of expenditures on durable goods, housing construction, and education has increased, which requires preliminary accumulation of funds.

Thirdly, from the state’s cash savings, the value of which depends on the size of state property and the share of the gross national product redistributed through the state budget.

Loan capital is a kind of commodity, the use value of which consists in the ability to function as capital (buildings, structures, equipment, goods) and generate income in the form of profit. Part of this profit is used to pay for the loan capital and acts as its price or loan interest.

Loan capital comes in the form of money, but there are significant differences between these categories. Loan capital differs qualitatively from money in that it is a form of self-increasing value. Money as a value equivalent does not increase value. They also differ quantitatively. The mass of loan capital exceeds the amount of money in circulation, since one monetary unit repeatedly acts as loan capital.

So, the main feature of loan capital as an economic category is the transfer of value for temporary use in order to realize its specific quality - the ability to generate profit in the form of interest. Loan interest acts as the price of loan capital. Its economic nature is determined by relations of production. Interest is payment for the use value of loaned capital, while the prices of ordinary goods represent the monetary expression of their value.

Banks constitute an integral feature of the modern monetary economy; their activities are closely related to the needs of reproduction. Being at the center of economic life, serving the interests of producers, banks mediate connections between industry and trade, agriculture and the population. Banks are not an attribute of a single economic region or any one country; their sphere of activity has neither geographical nor national boundaries, it is a planetary phenomenon with colossal financial power and significant monetary capital. Having enormous power all over the world, banks in Russia, however, have lost their initially high role. And only the last two years have begun to play a prominent role.

Domestic banks, like our entire economy, are unlucky in many respects. Unfortunately, for quite a long time, administrative, often unprofessional thinking has replaced the economic approach. As a result, the true economic functions of credit institutions turned from primary to secondary. Throughout our history, banks have been so often ignored, their economic purpose reduced to such an extent, that even now, while organizing the transition to the market, we do not give them the attention they deserve. In other words, the command style of managing the national economy has been so long and persistently introduced into our minds, and the banks have been so driven into a corner, have lost their authority and purpose, that at present the need to restore their true role does not sound with due conviction.

We can say that in our society an understanding of the place that banks should occupy in the economic system of economic management is just beginning to emerge. Our entire theory of banks is a factual retelling of what kind of banks exist in the country and what operations they perform. Society needs detailed, deeper ideas about the essence of the bank, its concept, clarification of its social purpose is necessary.

The activities of banking institutions are so diverse that their actual essence is uncertain. In modern society, banks engage in a wide variety of transactions. They not only organize money circulation and credit relations; Through them, financing of industry and agriculture, insurance operations, purchase and sale of securities, and in some cases, intermediary transactions and property management are carried out. Credit institutions act as consultants, participate in discussions of national economic programs, maintain statistics, and have their own subsidiary enterprises.

In my work I will try to reveal the concept of the loan capital market, loan interest, and the banking system of the Russian Federation; consider their structure and condition; understand what Central Banks (CBs) and commercial banks are, what functions they perform; Let us consider the development trends of the banking system in Russia, as well as the credit and monetary policy of the Central Bank.

1. The concept of the loan capital market and its structure

The increase in the scale of accumulation of money capital under capitalism led to the development of the loan capital market. Under the influence of supply and demand, the movement of loan capital occurs: capital accumulated in the form of cash is converted directly into loan capital.

The loan capital market as an economic category expresses socio-economic relations that are determined by the laws of capitalist economics, which ultimately form its essence, i.e. connections and relationships both within the market itself and in interaction with other economic categories.

Money capital is released in the process of reproduction. It is sent there in the form of loan capital through the market, and then returns again to the lender (banks and other financial institutions).

The essence of the loan capital market does not depend on what kind of money capital is used on it: one’s own or someone else’s, accumulated, i.e. it makes no difference whether the banker conducts his business only with his own capital or only with the capital deposited with him.

The economic role of the loan capital market lies in its ability to unite small, scattered funds in the interests of all capitalist accumulation. This allows the market to actively influence the concentration and centralization of production and capital.

The increased role of the loan capital market in the economy is manifested in three main directions: the provision of loan capital to the private sector, the state and the population, as well as foreign borrowers; accumulation of free cash capital and cash savings of the population; concentration of fictitious capital. The accumulation and unification of individual monetary capital is carried out not only by private financial institutions, but also by the securities market.

An important feature of the loan capital market is the increased influence on the process of internationalization of the world economy by ensuring the migration of capital.

The loan capital market performs a macroeconomic function. In a modern capitalist economy, money capital accumulates mainly in the form of money loan capital. Therefore, the accumulation of money capital is important not in itself as a separate process, but primarily from the point of view of its impact on the entire course of capitalist reproduction, i.e. in the macroeconomic aspect. In this regard, the accumulation of monetary capital closely interacts with real accumulation, which is a completely different process. Most of the money capital is formed through the savings of the population, and their size plays a significant role in the formation of the national rate of real accumulation, the share of capital investments in the gross national product and national income.

Huge masses of money capital, accumulated and mobilized through loan capital markets, create a certain illusion that the volume of money capital is potentially equal to the volume of loan capital. This appearance occurs primarily in those countries where there is an extensive credit system.

The modern structure of the loan capital market is characterized by two main features: temporary and institutional (Fig. 1 and 2).

On the basis of time, a distinction is made between the money market, in which loans are provided for a period from several weeks to one year, and the capital market itself, where funds are issued for longer periods: from one to five years (medium-term loan market) and from five or more years (long-term loan market).

The most developed capital markets are the United States, Western Europe and Japan. These countries have extensive, flexible capital markets with well-developed two main tiers and an extensive network of various financial institutions.

Conclusion: The market for loan capital contributes to the growth of production and trade turnover, the movement of capital within the country, the transformation of cash savings into investment, the implementation of the scientific and technological revolution, and the renewal of fixed capital. In this sense, the market mediates the various phases of reproduction and is a kind of support for the material sphere of production, from where it draws additional monetary resources.

Fig. 1 Institutional structure of the loan capital market

Rice. 2 Functional (operational) structure of the loan capital market

Loan capital and loan interest

To define the modern capital market, it is necessary to turn to the concept of loan capital as an economic category. Loan capital is money lent for a certain percentage subject to repayment. The form of movement of loan capital is a loan. Loan capital is a special historical category of capital that arises and develops under the conditions of the capitalist mode of production.

The main sources of loan capital are monetary capital (money) released in the process of reproduction. These include:

· depreciation fund of the enterprise, intended for updating, expanding and restoring production assets;

· part of the working capital in cash, released in the process of selling products and making material costs;

· cash generated as a result of the gap between receiving money from the sale of goods and paying wages;

· profit used to update and expand production;

· cash income and savings of all segments of the population;

· monetary savings of the state in the form of funds from the ownership of state property, income from production, commercial and financial activities of the government, as well as positive balances of the central and local budgets.

Loan capital always appears in the form of money. However, this does not mean that the concepts of money and loan capital are identical. Money capital does not always take the form of loan capital. As one of the functional forms of industrial capital, it takes the form of loan capital only when it turns out to be free for its owner. If a functioning capitalist uses the proceeds from the sale of goods to pay for new material elements of circulating or fixed capital or to pay wages to workers, then the money is used not as loan capital, but as money capital.

Loan capital exists in the form of money. However, it is not money and differs from money qualitatively and quantitatively. The qualitative difference is that money, no matter what function it performs, does not in itself bring surplus value. Loan capital is a value that brings surplus value in the form of loan interest. The difference between loan capital and money in quantitative terms is that the mass of capital lent out exceeds the amount of money in circulation. This is due to two reasons:

Firstly, the same monetary unit can function as loan capital several times. (For example, capitalist A made a deposit in the bank in the amount of 10 thousand dollars, the bank lent this money to capitalist B to pay for goods purchased from the capitalist D, and the latter deposited money into the bank. As a result of these two operations alone, the loan capital doubled compared to the amount of cash.). In this case, the quantitative difference between cash and the mass of loan capital is entirely determined by the speed of circulation of money in the functions of the means of circulation and payment. This, in turn, depends on the degree of development of the credit system.

Secondly, a significant part of the loan capital moves and accumulates without the use of cash on the basis of credit transactions.

What are the features of loan capital:

1. Loan capital, which must be returned to the borrower upon expiration of the loan, always remains the capital of the owner; the borrower does not invest capital in production, as an industrial or commercial capitalist does. Loan capital is only given for temporary use in order to receive profit in the form of loan interest. It differs from capital-function in that it is capital property.

2. Borrowers of loan capital “sell” it as a commodity to industrial and commercial capitalists for loan interest. In turn, the latter purchase with it the means of production and labor, as a result of the exploitation of which they receive surplus value in the form of profit, part of which the loan interest and the loan itself are repaid. Thus, loan capital, as a result of the circulation, is able to act in the form of a commodity that can generate profit as a result of the exploitation of hired labor.

3. Loan capital does not change, unlike commercial and industrial capital, its monetary form. Its movement does not change its structure. When a loan is provided in cash, it is returned to the borrower in the same form, but in a different volume increased by the amount of loan interest (money growth).

4. The presence of a specific form of alienation in loan capital in the form of a unilateral transfer of value. That is, the return of loan capital occurs after a certain period of time, and not initially, as happens with goods exchanged for a sum of money during purchase and sale. That is why the contradictions between capital and labor reach their highest degree in loan capital.

5. The generation of money by money, i.e. the ability to obtain, without visible costs and intermediate links, an increase (interest) on a loan, regardless of both the production process and commodity circulation.

6. Receiving profit in the form of loan interest, i.e. that part of the surplus value that production (functioning) capitalists return to loan capitalists for the use of loan capital.

Loan interest is a kind of price of the value lent for temporary use (loan capital).

The existence of loan interest is due to the presence of commodity-money relations, which in turn are determined by property relations. Loan interest arises where one owner transfers a certain value to another for temporary use, as a rule, for the purpose of its productive consumption.

For the lender, who renounces the current consumption of material goods, the purpose of the transaction is to obtain income on the loaned value; the entrepreneur also attracts borrowed funds in order to rationalize production, including increasing profits, from which he must pay interest.

If we proceed from the principle of equal return on invested funds, then for one ruble of borrowed funds there is a profit amount corresponding to the return on one’s own investments. The clash of interests of the owner of the funds and the entrepreneur who puts them into circulation leads to the division of profits on the invested funds between the borrower and the lender. The latter's share appears in the form of loan interest.

The development of market relations in Russia determined the transformation of the functions of loan interest inherent in it in the administrative-planned economy system: the stimulating function and the function of profit distribution into a more broadly interpreted regulatory function.

In a transition economy, the prerequisites have not yet been created that would allow interest to realize this function in full. If the level of loan interest is based on the relationship between demand and supply of credit, which is typical for a market economy, it must clearly reflect changes in economic conditions. Incentives for additional investment using credit will continue as long as the expected profitability is greater than or equal to the current interest rate. However, this scheme currently does not fully correspond to real economic conditions. Despite the market formation of the level of loan interest, a number of reasons (inflation, features of monetary regulation, underdevelopment of the money market, the forms of state regulation of certain sectors of the economy used) do not allow interest to fully realize its regulatory function.

At the same time, in the conditions of the modern Russian economy, certain elements of economic regulation related to loan interest operate. This is manifested in the role that interest plays in the economic sphere:

· through the interest rate, the ratio of demand and supply of credit is balanced. It promotes a rational combination of own and borrowed funds. In the conditions of market formation of the level of loan interest, attracting borrowed funds into circulation is profitable only if the loan covers temporary and necessary additional needs. Any excessive use of credit reduces the overall level of return on investment;

· the rate of payment for resources established by the Bank of Russia, along with the norm of required reserves and the conditions for the issue and circulation of government securities, is gradually becoming an effective means of managing commercial banks. Without resorting to direct regulation of the interest rate policy of the latter, the Bank of Russia determines the unity of interest rate policy across the economy, stimulating an increase or decrease in interest rates;

· interest regulates the volume of deposits attracted by the bank. The growth in the economy's needs for loans must be covered by a corresponding increase in bank deposits as sources of lending. This leads to an increase in deposit interest rates to an amount that balances the supply of deposits and the demand for them on the part of the credit institution. On the contrary, with a reduction in the farm's need for loans, the bank's income from loans provided will decrease. He will be able to increase profits by reducing the volume of passive transactions. Thus, a decrease in the influx of resources into the credit system is a reaction to a decrease in the economy’s need for borrowed funds;

· The interest rate policy of a commercial bank is already aimed at appropriate management of the liquidity of its balance sheet. Differentiation of the level of loan interest on active operations depending on the liquidity of investments leads to compliance of the demand for risky credit on the part of borrowers with the liquidity requirements of the bank’s balance sheet. The role of interest on deposit transactions as an incentive to attract the most stable funds into the circulation of a credit institution can be seen in a similar way.

Loan interest can take different forms; their classification is determined by a number of characteristics, including forms of credit, types of operations of a credit institution, types of investments using a loan, and loan terms.

As an example, we can cite the following classifications of loan interest forms (Fig. 3 and 4).

The presence of various forms of loan interest in practice determines the variety of interest rates.

Taking into account the modern assessment of the mechanism for forming the level of loan interest, it is necessary to note the following.

Under the conditions of market mechanisms in the sphere of credit relations, the level of loan interest tends to the average rate of profit in the economy. Provided there is a free flow of capital, it will flow into that industry, that area of investment of funds that will ensure the greatest profit. If the level of income in the production sector of the economy is higher than the loan interest rate, then there will be a movement of funds from the monetary sphere to the production sector and vice versa.

When forming the market level of loan interest, the deviation of its value from the average rate of profit is influenced by both macroeconomic and private factors underlying the interest rate policy of individual loans.

Macroeconomic factors:

· the ratio of supply and demand for borrowed funds, which in a free economy is balanced by the interest rate. If the demand for loanable funds falls, as happens in an economic downturn, and the supply of resources remains unchanged, interest rates fall. The opposite trend occurs, for example, in the case of a decrease in the volume of lending to the economy by the Bank of Russia: the supply of borrowed funds is reduced, which, while demand remains constant, causes an increase in the level of interest rates;

· level of development of money markets and securities markets. The most important parameters of the securities market and money market are directly dependent on each other. For example, investments in securities have traditionally been an alternative to bank deposits. As yields on securities transactions rise, financial institutions are forced to adjust rates accordingly. The more developed the securities market, the stronger this dependence manifests itself;

· international capital migration, the state of national currencies, the state of the balance of payments. The balance of payments characterizes the balance of trade, non-trade transactions and capital movements. The inflow or outflow of funds from these balance of payments items affects the volume and structure of the money supply, the state of markets, and psychological expectations. As a result, interest rates move, accumulating the influence of these factors;

· a risk factor is inherent in any credit transaction. The nature and level of risks vary depending on specific operations, but while internal risks can be minimized, external risks often cannot be managed. They are taken into account when determining the level of interest rates, primarily for international transactions;

· monetary policy of the Bank of Russia. In pursuing its monetary policy, the Bank of Russia strives to stimulate economic growth, mitigate cyclical fluctuations in the economy, curb inflation, and balance foreign economic relations. The main instruments of monetary policy are the accounting policy of the Bank of Russia, regulation of mandatory bank reserve requirements and open market operations. Through the use of these instruments, the volume of money supply in circulation and, accordingly, the level of market interest rates are regulated;

· inflationary depreciation of money (inflationary expectations) is a significant factor influencing the level of interest rates. A decrease in the purchasing power of money during the period of use of a loan or circulation of a security leads to a decrease in the real amount of borrowed funds returned to the lender. The lender seeks to compensate for such a decrease by increasing the loan fee;

· taxation. The taxation system affects the amount of profit remaining at the disposal of the enterprise. Thus, by changing the procedure for collecting taxes, tax rates, and applying a system of benefits, the state stimulates certain economic processes. This system is also valid for the monetary market. For example, at the stage of formation of the government securities market, income received from transactions with them was not included in the tax base. Therefore, it was attractive for an investor to buy GKOs with a yield of, for example, 30% per annum, when rates in other market segments were about 40% per annum.

Private factors are determined by the specific conditions of the lender’s activities, its position in the credit market, the nature of operations and the degree of risk. In addition, the formation of the level of individual forms of loan interest has its own characteristics.

In modern Russia, the features of loan interest are determined by the state of the economy, primarily the monetary market, as well as the monetary policy of the state.

Let us name the main features of loan interest in modern Russia.

First of all, this is a high level of loan interest, which is formed as a result of the interaction of the factors discussed above. Currently, there is a steady downward trend in interest rates.

The structure of interest rates in Russia practically corresponds to the international one. However, taking into account the level of inflation, and most importantly, the complexity of its real forecasting in Russia, we can conclude that there is practically no long-term lending, and therefore interest rates on long-term debt instruments.

In our country, the mechanism for using floating interest rates has not become widespread, primarily due to insufficient recognition of monetary market indicators that could be used as a floating basis for such rates. Currently, other methods of insuring interest rate risk are used. Thus, the issuer of a long-term debt obligation has the opportunity to determine the coupon rate on the debt obligation within a specified period of time in accordance with the approved prospectus. For example, the interest rate on coupons during the first year of circulation of a three-year bond is agreed upon during issue, and for the second and third years it is announced when the issuer executes an offer to repurchase securities, say, a year after issue.

The state currently uses loan interest on a limited scale as a tool for stimulating certain economic processes. An example is the procedure for stimulating agricultural production by the state by subsidizing interest rates on loans received by agricultural producers from Russian banks. In conditions when enterprises are reimbursed from the budget for part of the costs of paying interest, preferential lending conditions are established for agricultural producers.

Commercial banks, which are the main subjects of credit relations in Russia, are characterized by a gradual decrease in interest margins. This is determined by the general trends of decreasing interest rates, increasing competition in the banking system and the development of the monetary market and the securities market.

Conclusion: Thus, we can conclude that temporarily free funds arising from the circulation of industrial and commercial capital, monetary savings of the personal sector and the state form sources of loan capital.

In general, strengthening the role of loan interest in the economy and turning it into an effective element of economic regulation is directly related to the state of the economic situation in the country and the progress of reforms. Modern economic relations are characterized by the strengthening of the role of loan interest as a result of the manifestation of its regulatory function.

1.2 Supply and demand for loan capital

The essence of the movement of loan capital is most fully manifested in the process of transferring it from the lender to the borrower and back. In fact, in this case, the owner of the capital (the lender) sells to the borrower not the capital itself, but the right to its temporary use.

Many economists consider loan capital as a kind of commodity, the consumer value of which is determined by the ability to be productively sold by the borrower, providing him with profit (part of which is used for the subsequent payment of loan interest).

The demand for money and its supply are the most difficult to predict values, since they cannot be quantified absolutely accurately and definitively by participants in money circulation. Accordingly, all other values are relative, both from the point of view of forecasting and from the point of view of regulating cash flow.

An increase in the demand for money on the part of participants in money circulation is determined by:

·further economic growth;

·decrease in inflation and inflation expectations;

·increased confidence in the banking system.

Depending on what motives a participant in money circulation is guided by, the demand for money is formed.

The first (main) type of need for money, i.e. in the supply of money (transaction motive), ensures the current economic functioning of one or another participant in money circulation. For an individual, this is a reserve of money for purchases until the next income. For enterprises, the reserve of money is intended to ensure the purchase of materials, payment of wages and other expenses until the receipt of the next cash receipts from the sale of goods and provision of services. For the state, the reserve of money is foreign exchange reserves, which make it possible to provide its residents with funds for settlements on foreign economic activities.

The second type of need for money (precautionary motive) allows a participant in money circulation to create a cash reserve to reduce risks in conditions of uncertainty and smooth out inevitable cash gaps.

The third type of need for money (speculative motive) arises due to the fact that modern money itself cannot serve as a means of storing value. A certain part of the income of a participant in money circulation must be used as a means of payment - credit resources that generate income in the form of interest. This demand is realized through the acquisition of non-material (financial) assets by participants in money circulation. Such assets can be bonds, shares, and derivative financial instruments.

The money supply is determined by the interaction of three variables:

1. monetary base of the central bank;

2. interest rate on the money market;

3. the norm of mandatory reservation.

The central bank's monetary base includes required reserves and cash. This base is provided by the assets of the central bank: gold and foreign exchange reserves, securities stored in its portfolio, and loans to banks.

The interest rate in the short-term money market is formed largely due to the optimization of the ratio of reserves of the banking system to its deposits. The determination of the required reserve ratio is influenced by the ratio of cash in circulation and deposits of the banking system.

The money supply is also influenced by:

· retail trade turnover;

·receipts of taxes and fees from the population;

·receipts from bank deposits;

·receipts from the sale of securities;

·gold and foreign exchange reserves (especially in the presence of a state budget deficit);

·the state of the country's balance of payments;

· the state of the balance sheet of the central bank.

The supply of money is formed by all participants in money circulation. But the banking system has a direct impact on the money supply through:

· organizing a more economic, sustainable cash flow;

· conducting operations in various segments of the financial market in order to influence the structure of money turnover;

· reduction or increase in the issue of money and other means of payment.

Depending on the level of development of the country’s economy, national characteristics and financial capabilities, ensuring sustainable money circulation is carried out by a strictly centralized system of specialized divisions of the central bank or the banking system as a whole. They are entrusted with the functions of establishing a well-functioning cash flow.

Conclusion: A slowdown in economic development and a decrease in the demand for money on the part of economic agents does not exclude the negative inflationary consequences of growth in the money supply while the foreign economic situation continues, and efforts are required to balance the supply of money and the demand for it. The money supply must be balanced with the economically justified demand for money.

2. Banking system

The activities of banking institutions are so diverse that their actual essence is uncertain. In modern society, banks engage in a wide variety of transactions. They not only organize cash flow and credit relations. Through them, financing of the national economy, insurance operations, purchase and sale of securities, intermediary transactions, property management and many other operations are carried out. Credit institutions provide consultations, participate in discussions of national economic programs, maintain statistics, and have their own subsidiary enterprises.

A bank is an autonomous, independent, commercial enterprise.

Of course, a bank is not a plant, not a factory, but, like any enterprise, it has its own product. The bank's product is primarily the formation of means of payment (money supply), as well as a variety of services in the form of loans, guarantees, guarantees, consultations, and property management. The bank's activities are productive.

In market conditions, banks are a key link that supplies the national economy with additional monetary resources. Modern banks not only trade money, they are also market analysts. By their location, banks are closest to the business, its needs, and the changing environment. Thus, the market inevitably puts the bank among the fundamental, key elements of economic regulation.

Today, the Bank is defined as a financial enterprise that concentrates temporarily available funds (deposits), provides them for temporary use in the form of loans (loans, advances), mediates in mutual payments and settlements between enterprises, institutions or individuals, regulates money circulation in the country, including the release (issue) of new money. Simply put, banks are organizations created to attract funds and place them on their own behalf on the terms of repayment, payment and urgency.

The banking system is a set of different types of national banks and credit institutions operating within the framework of the general monetary mechanism. Includes the Central Bank, a network of commercial banks and other credit and settlement centers. The Central Bank carries out the state emission and foreign exchange policy, regulates the economy and is the core of the reserve system. Commercial banks provide various types of banking operations and services.

Thus, we can say that the main function of the banking system is to mediate the movement of funds from lenders to borrowers and from sellers to buyers.

In creating a new market economy for Russia with various forms of ownership, the role of the banking system is great; with its help, the redistribution and mobilization of capital is carried out, monetary payments are regulated, commodity flows are mediated, etc. Banks are called upon to perform many special functions. These also include settlement and cash transactions, lending, investing, storing and managing cash and other funds, i.e. those services that a business person cannot do without today.

Keynes compared the banking system to the circulatory system of the body, and capital to the blood that nourishes its various parts. He believed that the state, by regulating the flow of financial resources with the help of banks, could influence the national economy and provide support to those industries that lag behind overall development.

Thus, we come to a deeper understanding of the role of the banking system, i.e. to the fact that its most important task is the creation and functioning of the capital market as the main link of the national economy, which determines its overall development.

The banking system is a holistic entity that ensures its sustainable development. As a collection of elements, it can be represented in the form of the following blocks and their elements. (Fig. 5)

Rice. 5 Structure of the Russian banking system

The presented blocks and elements of the banking system form a unity, reflecting the specifics of the whole, and act as carriers of its properties.

The task of intensifying the development of the banking sector, the need for government participation in this process, as well as the progress of implementation in 2002 of the Strategy for the Development of the Banking Sector of the Russian Federation (hereinafter referred to as the Strategy) guide the Government of the Russian Federation and the Bank of Russia to develop and take additional measures to increase the role of banks in economic development countries, strengthening confidence in the banking system, enhancing its transparency, and protecting creditors and depositors. This is in accordance with the provisions of the Strategy, which stipulates that the development of banking may pose new tasks, the solution of which will require clarification of the developed approaches.

One of the most important conditions for dynamic economic development is the creation of a sustainable resource base for economic growth, relying primarily on internal sources, as well as reducing the economy’s dependence on foreign economic conditions. The banking sector is one of the key instruments for solving this problem. Through banks, the accumulation of financial resources of the population and enterprises occurs, and their redistribution among sectors of the economy.

The main task for the near future is to create conditions that ensure increased efficiency of the banking sector and strengthening of its functional role in the economy. Important components of solving this problem are reducing the risks of banking activities, the cost of banking products and services, primarily credit, for the real economy and the population; increasing the terms and reducing the cost of resources attracted by banks; improving the quality of capital (equity), reducing costs of credit institutions.

The measures proposed by the Government of the Russian Federation and the Bank of Russia will contribute to the strengthening and development of the banking sector as a whole. At the same time, the structure of the banking sector is heterogeneous. There are different groups of banks operating in the banking sector (according to development strategy, risk profile, clientele served, sources of resource base formation). In this regard, the proposed measures will have a different impact on the activities of credit institutions, including from the standpoint of achieving specific government policy goals defined for the near future.

Conclusion: The most important areas of development of the banking sector were the expansion of the network of branches throughout the country, the establishment of connections with banking institutions of the near abroad, and the desire to enter the financial markets of the West. The dynamism of changes in the banking sector is increasing, which is associated with the instability of the credit market, increased interbank competition, and stratification among banking institutions.

The reliability of the bank is the main component of the basis on which the funds of Shareholders and Clients are preserved and increased.

2.1. The Central Bank and its functions

The Central Bank combines the features of a conventional (commercial) banking institution and a government department, possessing certain power functions in the field of organizing monetary circulation. The central bank is characterized by a high level of independence from other government agencies. For the most part, he is accountable directly to parliament or a special commission formed by parliament. The head of the central bank is appointed by the head of state or parliament. The government, as a rule, according to the banking legislation of developed Western countries, is given the right to select a candidate for this high post. The central bank is usually created in the form of a joint stock company vested with special powers. In most cases, its capital belongs to the state: but commercial banks and other financial institutions may be shareholders.

The degree of independence of central banks varies - from the most independent German Federal Bank to the Bank of France, which is completely dependent on the government. The banks of England and Russia occupy an intermediate place in this series. Here, a clear legislative distinction between public finance and the banking system is essential, i.e. limiting the government's ability to use central bank funds.

As the government's agent in fiscal affairs, the central bank advises the government, manages some of the government's deposit accounts and funds, issues and withdraws money on behalf of the government, manages the nation's foreign exchange reserves and acts on behalf of the government in the international foreign exchange market, is the depository of gold and the manager of the government. debt (issues government bonds, pays interest on them, repays them).

The central bank helps the government determine the best moment to issue bonds, their price, yield and other characteristics that make the issue attractive to investors, and the best place to place the bonds. To successfully cope with this task, the bank must have accurate and timely information about the state of the economy, the movement of credit resources, etc. Despite efforts to be as informed as possible, the bank is sometimes forced to make decisions before statistics confirm the expected event. Therefore, he conducts his own research, the results of which are usually published and are of great interest to scientists, economists, managers, and employees of financial institutions.

The central bank manages government deposits (even if they are held in commercial banks). Almost all government spending and revenues pass through the central bank's accounts. Interest-bearing balances are held in commercial bank accounts. The central bank also maintains an account for investing government revenues in securities (usually the government itself) and an account that holds foreign exchange reserves.

The Central Bank issues money and distributes it among commercial banks, and removes worn-out banknotes and worn-out coins from circulation. New money is issued to commercial banks on applications that reflect their cash needs by debiting the commercial banks' accounts at the central bank.

Another responsibility of the central bank, as an agent of the government, is to control and protect the exchange rate of the national currency. The Bank is authorized to buy and sell gold, silver, foreign currency, open accounts in central banks of other countries, act as an agent of foreign central banks and as a depositary of their assets.

The exchange rate is the price of a national currency on the international foreign exchange market or the proportion in which it is exchanged for the currencies of other countries. The price is determined by the balance of supply and demand. To trade currencies, the central bank must maintain foreign currency accounts with the central banks of the respective countries. When a government decides to invade the foreign exchange market in order to change the exchange rate of the national currency (such interventions are very rare now), if the goal is to keep the exchange rate from falling, the central bank withdraws some amount from the foreign exchange account and buys the national currency with it, changing thereby balancing supply and demand. Conversely, the central bank buys foreign currency if it decides to slow down the growth of the national currency exchange rate. In the first case, the invasion is limited by the availability of national currency in government accounts, in the second - by the availability of foreign currency.

The central bank also acts as a depository, the custodian of gold owned by the government of a given country. It can also store gold owned by foreign central banks and other financial institutions. The central bank buys and sells gold using a foreign exchange account. Gold is usually sold to central banks and governments of other countries, as well as international financial organizations such as the International Monetary Fund.

One of the most important tasks of a central bank is to manage the public debt, i.e. purposefully change that part of it that is represented by direct and guaranteed bonds in circulation (direct bonds are bonds issued by the government itself, and guaranteed bonds are bonds issued under a government guarantee by state corporations). To manage means to determine the properties of bonds, the terms of their issue and the location of their placement. This public debt, which is growing rapidly in many developed countries, represents the cumulative budget deficit (the excess of budget expenditures over revenues over all years). As an adviser to the government in financial matters, the central bank must not only collect and interpret economic information, but also sense changes in the demand for securities, in the flow of funds into the securities market, in the level of interest and liquidity in the securities market, in the attitude of investors to new releases, etc. To get a complete picture, the central bank consults with commercial banks, other investors and investment dealers.

Public debt management must be consistent with government objectives (not conflict with, for example, fiscal policy). This could be a serious problem for the central bank. On the one hand, the government cannot be left without cash, and on the other, obtaining it may be associated with the need to weaken the fight against the budget deficit with the resulting drop in confidence in the national currency.

Conclusion: Thus, the Bank of Russia has a dual legal nature. It is simultaneously both a government body with special competence and a legal entity carrying out economic activities.

2.2. Commercial banks and their role in the formation of the money supply

The term “Commercial bank” arose in the early stages of the development of banking, when banks primarily served trade, barter transactions and payments. The main clientele were merchants. Banks provided loans for transportation, storage and other operations related to the exchange of goods. With the development of industrial production, short-term lending operations for the production cycle arose: loans to replenish working capital, create reserves of raw materials and finished products, pay wages, etc. The terms of loans gradually increased, part of bank resources began to be used for investments in fixed capital and securities. In other words, the term “commercial bank” has lost its meaning. It denotes the “business” nature of the bank, its focus on servicing all types of business agents, regardless of their type of activity.

The banking system today is one of the most important and integral structures of a market economy. The development of banks and commodity production and circulation historically proceeded in parallel and were closely intertwined. At the same time, banks, acting as intermediaries in the redistribution of capital, significantly increase the overall efficiency of production.

Commercial banks belong to a special category of business enterprises called financial intermediaries. They attract capital, savings of the population and other funds released in the process of economic activity, and provide them for temporary use to other economic agents that need additional capital. Banks create new claims and obligations, which become commodities in the money market. Thus, by accepting customer deposits, a commercial bank creates a new obligation - a deposit, and by issuing a loan - a new requirement for the borrower. This process of creating new obligations is the essence of financial intermediation.

Among other things, banks are divided by field of activity.

Investment banks (in the UK - issuing houses, in France - business banks) specialize in issuing and founding operations. On behalf of state enterprises in need of long-term investments and resorting to issuing shares and bonds, investment banks take upon themselves the determination of the size, conditions, period of issue, selection of the type of securities, as well as responsibilities for their placement and organization of secondary circulation. Institutions of this type guarantee the purchase of issued securities, purchasing and selling them at their own expense or organizing banking syndicates for this purpose, and provide loans to buyers of shares and bonds. Although the share of investment banks in the assets of the credit system is relatively small, thanks to their awareness and constituent connections, they play a vital role in the economy.

Savings banks (in the USA - mutual savings banks, in Germany - savings banks) are, as a rule, small local credit institutions that are united in national associations and are usually controlled by the state, and often owned by it. Passive operations of savings banks include accepting deposits from the public for current and other accounts. Active operations are represented by consumer and mortgage loans, bank loans, purchases of private and government securities. Savings banks issue credit cards.

Mortgage banks are institutions that provide long-term loans secured by real estate (land, buildings, structures). The passive operations of these banks consist of issuing mortgage bonds. A mortgage loan is a long-term loan issued by mortgage, commercial banks, insurance and construction societies and other financial and credit institutions secured by land and buildings for industrial and residential purposes.

Consumer credit banks are a type of banks that operate primarily through loans obtained from commercial banks and issuing short- and medium-term loans for the purchase of expensive durable goods, etc.

In addition, innovative, industry and intra-industrial banks are distinguished.

Today, a commercial bank is able to offer clients up to 200 types of various banking products and services. Wide diversification of operations allows banks to retain customers and remain profitable even in very unfavorable economic conditions. It should be borne in mind that not all banking operations are daily present and used in the practice of a particular banking institution (for example, performing international payments or trust operations). But there is a certain basic set, without which a bank cannot exist and function normally. Such construction operations of the bank include:

· accepting deposits;

· making cash payments and settlements;

· issuing loans.

In addition to these main ones, there are a number of other operations (leasing, factoring, etc.).

Deposit. The bank covers over 90% of the total need for funds to carry out active operations through borrowed funds. Traditionally, the bulk of these funds are deposits, i.e. money deposited into the bank by clients - individuals and companies, stored in their accounts and used in accordance with the account regime and banking legislation.

In most countries, the classification of deposit accounts is based on two factors: the period of deposit until withdrawal and the category of the depositor.

Calculation functions. The payment mechanism is the structure of the economy that mediates “metabolism” in the economic system. Payment methods are divided into cash and non-cash. In large-scale turnover, non-cash payments and settlements dominate, and in the sphere of retail trade, the bulk of transactions are mediated by cash, despite the fact that forms of non-cash payments have been actively introduced in recent decades. There are a wide variety of types of non-cash payments.

Credit agreements. In the practice of banks, a distinction is made between commercial loans and personal loans. These categories correspond to various types of credit agreements that define the terms of the loan, its repayment, etc.

Leasing. This form is applicable to financing the long-term lease of expensive equipment. According to the leasing agreement, the lessee receives equipment for long-term use subject to periodic payments to the owner of the equipment. Lessors can be industrial enterprises that have their own leasing companies, as well as specialized leasing companies.

Leasing rates are calculated based on production costs, interest, and taxes.

Factoring. The factor bank buys the claims of a company and then receives payments on them itself. In this case, we are talking, as a rule, about negotiable short-term claims arising from commodity supplies. There are three participants in a factoring operation: the factor, the original creditor and the debtor, who receives goods from the client on a deferred payment basis. The factor maintains all accounting, assumes responsibilities for warning the debtor about payments, carries out collection of claims, and also bears all the risk associated with the full and timely receipt of payments. The client's expenses consist of commissions and factoring fees, consisting of interest on the advance payment provided and the advance company's profit.

Transactions with securities. The bank's investment portfolio is strictly structured by law. This means that the state sets a percentage rate, according to which a certain part (up to 90%) must consist of state securities, the rest - of private enterprises. The primary placement of all types of government securities occurs through auction sales, where applications offering the highest price (rate) are satisfied first. Secondary circulation occurs on the over-the-counter market. The market is created by a group of dealer firms conducting active operations in the purchase and sale of government bonds. In an economic downturn, the government, through the central bank, tries to stimulate economic activity and buys government bonds from dealers, increasing their reserve accounts. In conditions of an inflationary boom, the government sells its obligations to dealers and thereby reduces their liquidity. Corporate bonds are much more exposed to the risk of default than government bonds. Banks buy only high-quality securities in accordance with the credit agencies' assessment of the risk associated with them.

Conclusion: Commercial banks play a significant role in the economy of any country. And the number of banks does not always mean quality, as we see in the example of Russia.

2.3. Credit and monetary policy of the Central Bank

Central banks manage the entire credit system of the country; they are called upon to regulate credit and monetary circulation, control and stabilize the movement of the exchange rate of the national currency, smooth out with their influence differences in the level of business activity, prices and employment, and stimulate the growth of the national economy on a healthy financial basis. The central bank acts as an agent of the government. In this case, he advises the government in areas such as national debt management, exchange rate and monetary policy. In addition, he is the government's representative in the latter's financial transactions. The main function of the bank is to develop and implement monetary policy. This is its most important function.

The main instruments of monetary policy are:

· official discount rate - a relatively rarely changed rate of the Central Bank at which it is ready to discount bills or provide loans to other banks as a lender of last resort;

· required reserves - part of banks' resources deposited at the request of the authorities into an interest-free account with the Central Bank;

· open market operations - Central Bank transactions for the purchase and sale of commercial and treasury bills, government bonds and other securities, as well as short-term transactions with securities with a later reverse transaction;

· reasonable banking supervision - various methods of monitoring the functioning of banks from the point of view of ensuring their safety based on the collection of information, the requirement to comply with certain balance sheet ratios;

· control over the capital market - the procedure for issuing shares and bonds, including standard rules and requirements, the order of issue, the official limit on external borrowing regarding self-financing, quotas for issuing bonds, etc.;

· access to markets - regulation of the opening of new banks, permission to operate for foreign banking institutions;

· special deposits - part of the increase in deposits or loans from commercial banks, withdrawn to interest-free accounts with the Central Bank;

· quantitative restrictions - rate ceilings, direct restrictions on lending, periodic “freezing” of interest rates;

· currency interventions - purchase and sale of currency to influence the exchange rate and, consequently, the supply and demand of the monetary unit;

· public debt management. The issue of government bonds neutralizes the liquidity of banks, ties up their funds, and therefore the scale of government debt, the technique of its issue, the form of placement are of great importance for the control of money circulation;

· targeting - setting targets for the growth of one or more indicators of the money supply;

· regulation of stock and futures transactions by establishing a mandatory margin;

· norms of mandatory investment in government securities for banks and investment institutions.

All these tools can be effective only in conditions of close coordination with fiscal policy and legislation.

Conclusion: The performance by the Bank of Russia of its main functions presupposes the need for control and supervision over the activities of credit institutions. The Bank of Russia combines the implementation of monetary policy with supervision of the work of credit institutions, being practically the only supervisory authority in the country.

Conclusion

The loan capital market promotes the growth of production and trade turnover, the movement of capital within the country, the transformation of cash savings into capital investments, the implementation of the scientific and technological revolution, and the renewal of fixed capital. In this sense, the market mediates the various phases of reproduction and is a kind of support for the material sphere of production, from where it draws additional monetary resources.

Thus, we can conclude that temporarily free funds arising from the circulation of industrial and commercial capital, monetary savings of the personal sector and the state form sources of loan capital.

In conditions of economic recovery and sufficient economic stability, credit acts as a growth factor. By redistributing huge amounts of money and goods, credit feeds enterprises with additional resources.

A slowdown in economic development and a decrease in the demand for money on the part of economic agents does not exclude the negative inflationary consequences of growth in the money supply while the foreign economic situation continues, and efforts are required to balance the supply of money and the demand for it. The money supply must be balanced with the economically justified demand for money.

The most important areas of development of the banking sector were the expansion of the network of branches throughout the country, the establishment of connections with banking institutions of the near abroad, and the desire to enter the financial markets of the West. The dynamism of changes in the banking sector is increasing, which is associated with the instability of the credit market, increased interbank competition, and stratification among banking institutions.

The reliability of the bank is the main component of the basis on which the funds of Shareholders and Clients are preserved and increased

Thus, the Bank of Russia has a dual legal nature. It is simultaneously both a government body with special competence and a legal entity carrying out economic activities.

The main feature of the legal status of the Bank of Russia at present is that the implementation of its administrative rights and economic activities are subordinated to the solution of the same task - managing the credit system.

Administrative functions can be divided into organizational (organization and management of monetary circulation) and the function of protecting civil circulation, the interests of depositors and other creditors of commercial banks.

Commercial banks play a significant role in the economy of any country. And the number of banks does not always mean quality, as we see in the example of Russia.

The bank’s systematic fulfillment of its functions creates the foundation on which the stability of the country’s economy as a whole rests. And although each type of operation is concentrated in special departments of the bank and carried out by a special team of employees, they are intertwined. Thus, banks have the unique ability to create means of payment that are used in the economy to organize commodity circulation and settlements. We are talking about opening and maintaining check and other accounts that serve as the basis for non-cash transactions. An economy cannot exist and develop without a well-functioning cash settlement system. Hence the great importance of banks as organizers of these settlements.

The performance by the Bank of Russia of its main functions presupposes the need for control and supervision over the activities of credit institutions. The Bank of Russia combines the implementation of monetary policy with supervision of the work of credit institutions, being practically the only supervisory authority in the country.

Annex 1

CREDIT ORGANIZATIONS

(for the beginning of the year)

2001	2002	2003	2004	2005	2006
Number of credit institutions registered on the territory of the Russian Federation	2126	2003	1828	1668	1518	1409
including those having the right to carry out banking operations (current)	1311	1319	1329	1329	1299	1253
Number of branches of operating credit institutions on the territory of the Russian Federation	3793	3433	3326	3219	3238	3295
of them:
Sberbank of Russia	1529	1233	1162	1045	1011	1009
banks with 100% foreign participation in the authorized capital	7	9	12	15	16	29
Registered authorized capital of operating credit institutions, billion rubles.	207,4	261,0	300,4	362,0	380,5	444,4
Number of credit institutions with licenses (permits) granting the right:
to attract deposits from the population	1239	1223	1202	1190	1165	1045
for transactions in foreign currency	764	810	839	845	839	827
for general licenses	244	262	293	310	311	301
for transactions with precious metals	163	171	175	181	182	184
Number of credit institutions with foreign participation in the authorized capital that have the right to carry out banking operations	130	125	126	128	131	136
including:
with 100% foreign participation	22	23	27	32	33	41
with foreign participation from 50 to 100%	11	12	10	9	9	11

GROUPING OF OPERATING CREDIT INSTITUTIONS BY SIZE OF REGISTERED AUTHORIZED CAPITAL

(for the beginning of the year)

authorized capital, million rubles.

Literature

1. Lavrushin O.I. Money. Credit. Banks: textbook / M.: Knorus, 2006

2. Gusakov N.P. International monetary and credit relations: textbook. for universities / M.: INFRA-M, 2006

3. Zhukov E.F. General theory of money and credit: textbook / M.: Unity, 2000

4. Russian statistical yearbook, 2006

5. Kovalev A.P. Finance. Money turnover. Credit: textbook/ R-on-D.: Phoenix, 2001

6. Yanova V.V. Economics: textbook / M.: Exam, 2007

1. The essence and functions of the loan capital market

2. Credit as a form of movement of loan capital

3. The essence of judgment interest

4. Credit institutions in the financial market infrastructure

5. Regulation of the activities of commercial banks

1. The essence and functions of the loan capital market

Loan capital - This is money lent for a certain percentage subject to repayment.

Loan capital arose on the basis of the circulation of industrial capital, and is a special, independent form of capital separated from it, characterized by a circulation different from the circulation of industrial and commercial capital.

Basic loan sources capital:

monetary capital released in the process of reproduction; depreciation fund of enterprises;

funds released in the process of selling products and making material costs;

funds generated as a result of the gap between receiving money from the sale of goods and paying wages;

profit used to update and expand production;

cash income and savings of all segments of the population;

monetary savings of the state in the form of funds from the ownership of state property;

income from industrial, commercial and financial activities of the government;

positive balances of the central and local banks.

Loan capital market – a specific sphere of commodity relations, where the object of the transaction is the money capital provided on loan and the demand and supply for it is formed.

WITH functional point of view The loan capital market is a system of market relations that ensures the accumulation of free funds, their transformation into loan capital and its redistribution between participants in the reproduction process.

WITH institutional point of view The loan capital market is a set of financial institutions and stock exchanges through which the movement of loan capital occurs.

The essence of the loan capital market is manifested in its functions :

commodity circulation service through credit;

accumulation of cash savings(accumulations) of enterprises, the population, the state, as well as foreign lenders (servicing sources of loan capital);

transformation of funds directly into loan capital for its use in credit form in the sphere of social production;

servicing enterprises, the population and the state as consumers of loan capital;

acceleration of concentration and centralization of capital for the formation of powerful financial and industrial groups.

The modern structure of the loan capital market is characterized by two main features:

temporary;

institutional.

By temporary sign distinguish:

money market is a market where loans are provided for periods ranging from several weeks to one year.

capital market - this is a market where funds are issued for longer periods: from one to five years (medium-term loan market) and from five or more years (long-term loan market).

By functional-institutional basis The modern loan capital market implies the presence of two main links:

credit system – a set of various credit and financial institutions.

stocks and bods market is a market where securities are sold.

The instruments of the loan capital market are:

money market instruments;

securities market instruments.

Money market instruments – obligations, usually short-term (less than one year), which are usually released for sale at a discount.

The following main ones can be identified money market instruments:

treasury bills – issued by the state as an obligation to pay a certain amount of money;

bills of exchange (commercial bills) - issued by companies as debt instruments in payment for goods and services as an obligation to pay a certain amount of money;

certificates of deposit – these are certificates confirming the placement of a deposit with the issuer and are an object for trading, similar to a savings book issued by a bank when making a deposit into an individual bank account.

Securities market instruments are securities . Securities are monetary documents certifying the property right or loan relationship of the issuer that issued the security in relation to its owner.

The international loan capital market (IDMC) is an established international credit system in which financial institutions of a certain state provide loans and borrowings on repayment terms.

In this case, borrowers can be companies, banks, governments, as well as various international financial organizations.

IDGC is one of the most powerful instruments in the financial world. With its help, interested parties achieve the most efficient distribution of capital between participants in transactions. Based on this, we can say that MRSK, at its core, is a rather narrow group of various financial and credit structures, the main task of which is the correct redirection of available funds from lenders to borrowers.

Transactions between different states are quite often carried out at MRSK. Based on this criterion, experts distinguish 2 types of this market:

the European market, which is characterized by transactions outside the issuing country in foreign currency;
the foreign loan market, intended for the implementation of transactions with non-residents in the country's markets.

Stages of formation

IDGC was formed over a fairly long period of time. It is customary to distinguish the following stages of its formation:

Pre-monopolistic. All national capital markets existed separately and were not united into a global network.
Imperialist. International lending is gaining popularity, economic ties are rapidly developing and strengthening. By the end of the period, major financial centers emerged.
Crisis. It is characterized by a sharp decline in trade volumes in both national and international markets.
Innovative. The main distinguishing feature of this stage is the emergence of the European market, which was able to contribute to the unification of national markets and the development of IDGCs. The active phase of the formation of the new institute took place in the 1960s.
Integration. It started in the 1980s and continues today. It is distinguished by the removal or easing of currency restrictions and the optimization of the most popular credit mechanisms.

Structural elements

The main elements of IDGC are:

the mortgage market, which includes all loan agreements in the real estate and construction sectors;
the capital market, where loans are issued to service fixed assets;
the stock market, where agreements related to the turnover of securities are concluded;
money market, based on the provision of so-called “short” loans for the formation of working capital.

However, experts distinguish the components of IDGCs depending on the location, as well as the zone of influence of the financial institution. According to this gradation, its structural elements are:

National markets. They operate within one single state.
Regional markets. They unite several national markets of a certain geographical region (such associations are typical for North Africa, Southeast Asia, etc.).
International financial centers. At the beginning of the twentieth century there were only 3 of them - New York, London and Paris. In the second half of the last century, Tokyo, Singapore, Zurich and others received such recognition.

Work principles

IDGC operates on the principles:

payment - loans are issued only for a pre-agreed fee;
repayment - the borrower is obliged to repay the funds within a certain period of time;
urgency - when issuing a loan, specific terms for its repayment are always agreed upon.