Emission of money and its consequences. What is a money issue? Additional emission of money is a factor affecting the economy and changes in exchange rates

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Introduction

In the economy of any state, ever since money appeared, emission has played and plays a versatile, and sometimes contradictory role every day. It affects the strengthening and weakening of the economy, increasing state budget revenues and covering their deficits, changing the purchasing power and exchange rates of national currencies.

In recent years, as a result of mistakes made in the conduct of monetary and financial policy, as well as an insufficiently correct interpretation of the relationship between money emission and inflation in the media, a significant part of the population of our country has firmly established the point of view that money emission and inflation are almost not identical concepts. In fact, this is far from the case. Money emission underlies the organization of money circulation, the formation and structuring of the money supply, and the implementation of money circulation. The emission finds its manifestation in the variety and functionality of monetary instruments, the composition and structure of the money supply, the fullness of the money circulation, the quantitative and qualitative provision of the function of money. Through emission schemes in the banking system, the activities of banks, the volume and structure of the money supply are directly regulated, and indirectly - the state of federal and regional finances, the finances of business structures, public organizations, and the population.

Finally, the central place in the analysis of the state of the monetary system is occupied by the study of the issue of money.

The purpose of this work was to consider issues related to the issue of money, namely:

concept and types of emission;

principles of organization of emission;

bank issue;

deposit and check issue;

monetary structure.

Issue of money. Factors that determine the issue of money

The banking system should provide the national economy with funds in the amount that is needed for its normal functioning. An increase in the economy's need for money due to an increase in the national product, an increase in the price level, or for other reasons, leads to the need for a corresponding increase in the money supply on the part of banks, that is, in their emission of money.

The emission of money is an additional release of money into circulation, leading to an increase in the circulating money supply; is the issuance of banknotes in all forms. The issuing authorities are central banks that issue banknotes and treasuries that issue treasury notes and change coins.

It should be noted that the concepts of "issue of money" and "issue of money" are not equivalent. The release of money into circulation occurs constantly. Non-cash money is issued into circulation when commercial banks provide loans to their customers.

Cash is issued into circulation when banks, in the process of carrying out cash transactions, issue them to customers from their operating cash desks. However, at the same time, customers repay bank loans and hand over cash to the operating cash desks of banks. At the same time, the amount of money in circulation may not increase.

Thus, we can conclude that, unlike the issuance of money, the emission always leads to an increase in the money supply, i.e. money emission can be characterized as the process of formation and replenishment of the money supply and the accompanying regulatory and managerial influences on the money supply. Money emission, as well as inflation and money deficit, can be identified through a formalized expression of the law of money circulation:

where the money supply in circulation D, weighted by the speed of money turnover C, is balanced with the mass of commodities T, weighted by prices Z. At the same time, the growth in the money supply D can be characterized as direct emission, and the increase in the turnover rate C as indirect emission. However, it is more interesting to determine the factors and reasons that either necessitate the issue of money or predetermine the negative consequences of its implementation. In the first case, emission, direct or indirect, restores the disturbed balance, in the second case, it itself creates an imbalance between the volume of money supply and the need for it from the economy, which is manifested in inflation.

The factors that determine the issuance of money include:

firstly: the increase and expansion of the mass of commodities, the growth of production under the influence of an increase in the number of small producers, the market orientation of large industries; activity and organization of trade, increasing the product offer and reducing damage and loss of goods; expanding the structure of the commodity market by bringing to the market goods, the sale of which was previously prohibited, etc.;

secondly, price increases (primarily not associated with changes in the properties and quality of goods and services), speculative transactions; inadequate tax policy in the absence of competitive pricing conditions; the emergence of intermediaries, often not carrying out the completion and movement of goods; the strengthening of monopolies and the influence of the criminal environment, artificially inflating prices and preventing attempts to reduce them, etc.;

thirdly, a decrease in the speed of money turnover: an increase in the share of cash in the structure of the money supply and savings of the population; poor organization of trade, shortage and inadequacy of the assortment of the product offer, slowing down the commodity and, accordingly, money circulation; political and administrative restrictions that limit the use of savings; general risks, etc.

The conditions that are formed under the influence of these, as well as a number of other factors, almost invariably cause the issue of money.

Types and types of money issue

The variety of types and types of monetary emission determines the need for their classification, both in the development and in the conduct of emission regulation.

Depending on the type of funds additionally entering circulation, a distinction is made between cash and non-cash money emission.

The issue of cash is their release into circulation, in which the amount of cash in circulation increases.

If cash is issued only by the state, then non-cash money can also be created by commercial banks, issuing loans. Non-cash emission occurs in the process of banks conducting their active operations. At the same time, an increase in non-cash money supply in circulation can occur when active operations are carried out by both the central bank and commercial banks.

One of the significant classification approaches is also the allocation of types of money emission according to their target settings or functional purpose:

formative emission;

replenishment issue;

regulatory issue;

exchange-regulating;

exchange;

conversion.

The emission may have as a target the initial formation of the money supply, the complete replacement of all its elements when the state declares depreciated paper money invalid, replenishment of the volume or change in the structure of the money supply; restriction in circulation or change of individual monetary instruments. Historically, this approach is implemented in the process of evolution of material carriers of money and in scenarios of monetary reforms. During the initial, formative emission, the money supply is formed at the stages of monetary reforms of a radical type, associated with a change in the type of the monetary system, or at the transitional stages of the historical evolution of material carriers of money. To ensure the sustainability of economic growth and maintain the balance of "money supply - mass of commodities", replenishing emission is of particular importance. Regulatory emission introduces temporary adjustments to the composition and structure of the money supply. When individual elements of the money supply are replaced by one another in order to regulate its condition, they speak of exchange-regulating emission. In operations to replace money that has lost its solvency, in fact, there is also a money issue, which can be defined as an exchange issue. It does not change the volume and structure of the money supply, but maintains its functionality. Conversion emission occurs when there is a change in the structure of the money supply of individual monetary instruments. It leads to a change in qualitative characteristics and the formation of other functions of its specific elements.

Allocate money emission by the objects of emission or monetary instruments:

Issue of official banknotes;

Issue of specialized unofficial monetary instruments;

Issue of securities used in settlements;

Issue of investment values.

In addition to the official banknotes issued by the central bank, one can single out monetary instruments that are officially allowed to be used as a means of settlement and payment, but have a limited circulation sphere: bills of exchange, some types of government securities, etc. Their issue is of a pronounced regulatory nature with a high degree of selectivity. The next group consists of monetary assets that have the status of legal tender and settlement instruments, but are used as settlement and investment instruments in certain specific transactions by agreement of counterparties. Such assets include government debt securities, standard issue credit money: bonds, financial futures; credit money of bank non-standard issue: deposit and savings certificates, bank acceptances, etc.

Money emission is classified according to the issuers:

Emission of the central bank;

Treasury issue;

Bank issue;

Commercial issue.

First of all, among the issuers, one should name the central banks that issue monetary instruments, have the official status of banknotes, change coins and carry out non-cash money emission. Quite significant issuers that occupy a leading position in some states include the Ministry of Finance, the Treasury, etc., which issue treasury notes, treasury bills, and other government securities, as well as local authorities that can issue bonds of local loans performing a number of monetary functions. An important role in the formation of the money supply is played by commercial banks and other credit institutions, the activities of which will be described below.

The historical experience of our country and foreign countries, theoretical developments and analysis of practice make it possible to classify the types and types of money emission on the basis of its organization:

Natural and spontaneous;

Natural production;

Open coinage;

Closed coinage;

Open emission;

Open regulated issue;

Open controlled emission;

Closed issue.

It should be noted that there is a classification of money emission on the basis of the spheres of circulation of monetary instruments:

Emission in the retail sector;

Issue in the commercial sphere;

Emission in the banking sector;

Issue in the financial sector;

Issue in the international sphere.

The spheres of turnover are also associated with the objects and subjects of the issue, since many of them initially have a certain orientation, and in some, the specialization of monetary instruments is also manifested. So, cash is aimed primarily at the sphere of circulation of consumer goods - servicing the turnover of the population, retail, small-scale wholesale trade, and the service sector. Such specific areas of emission can also be distinguished, such as organizationally closed (circulation of coupons, checks only within enterprises, organizations, associations between their organizational structures or employees) and instrumentally closed (circulation of bills with their transfer by endorsement).

The classification features of certain types of emissions can underlie the development of directions, scenarios, methods of emission regulation and analysis of its impact on various elements of the country's economy. The considered types and types of money emission allow us to conclude that this economic category is ambiguous, multifaceted and diverse. Various goals, objects, subjects, spheres of organization of money emission suggest various scenarios for its implementation, and most importantly, its results.

Principles of organizing the issue of money

In Russia, the following principles of organization of emission are in force:

denomination principle (FZ “On the Central Bank of the Russian Federation (Bank of Russia)”, Article 27) - the official monetary unit (currency) of the Russian Federation is the ruble. One ruble consists of 100 kopecks. The introduction of other monetary units on the territory of the Russian Federation and the issue of monetary surahats are prohibited.

the principle of optional security - fiduciary emission (FZ "On the Central Bank of the Russian Federation (Bank of Russia)") - no official ratio is established between the ruble and gold or other precious metals;

the principle of monopoly and uniqueness (FZ "On the Central Bank of the Russian Federation (Bank of Russia)", Article 29) - the issue of cash, the organization of their circulation and withdrawal on the territory of the Russian Federation is carried out exclusively by the Bank of Russia;

the principle of unconditional obligation (FZ "On the Central Bank of the Russian Federation (Bank of Russia)", art. 30) - the ruble is the only legal tender in the territory of the Russian Federation;

the principle of unlimited exchangeability (FZ "On the Central Bank of the Russian Federation (Bank of Russia)", art. 31) - no restrictions on amounts or subjects of exchange are allowed. When exchanging banknotes and coins for banknotes of a new type, the period of their withdrawal from circulation cannot be less than one year and more than five years;

the principle of legal regulation (FZ "On the Central Bank of the Russian Federation (Bank of Russia)", Article 33) - the decision to issue money into circulation and withdraw it from circulation is made by the Board of Directors of the Bank of Russia.

Thus, the mechanism of modern money emission determines the credit nature of the security of banknotes. The provision of banknote emission directly affects the stability of the national currency, therefore, in many countries, the norms and methods of such provision are determined by law.

Bank issue. Monopoly right of the Central Bank to issue cash

Before giving a definition of bank emission, we will give the concept of money circulation.

Cash turnover is a set of cash payments made in the form of non-cash transfers and with the help of cash by all entities with the population of an economic entity and the state.

The first stage of money circulation is the issue of money. The primary is the issue of non-cash money, which is carried out by crediting additionally issued money to correspondent accounts in commercial banks in the form of loans from the Bank of Russia or budgetary notes.

Cash issue (bank issue) is secondary to non-cash issue; cash is brought to the territorial divisions of the Bank of Russia and then presented to commercial banks in exchange for debiting a similar amount of non-cash money from their correspondent accounts. In the same way, enterprises receive cash while simultaneously debiting non-cash amounts from their settlement and current accounts in commercial banks. The issue of cash ends with the payment of wages and social benefits to the population, which has the character of an additional turnover in relation to ordinary payments.

The issuance of cash is the basis for controlling the expansion of the entire money supply, including funds in the accounts of commercial banks.

The monopoly right to issue cash in the territory of the country is usually vested in the central bank of the state.

The Central Bank is the center of the credit system.

The emergence of central banks is historically associated with the centralization of the issue of banknotes in the hands of a few of the most reliable and universally trusted commercial banks, whose banknotes could successfully serve as a universal credit instrument of circulation. Such banks began to be called emission banks. The state, by issuing relevant laws, actively contributed to this process, since the banknotes issued for issuing loans by numerous small banks lost their ability to circulate in the event of bankruptcy of the issuers.

The first central banks appeared 300 years ago (Swedish Riksbank in 1668), but they have acquired ubiquitous distribution and modern significance only in recent decades. In 1920, an international financial conference in Brussels noted that "in countries where there is no central bank of issue, one should be created." It was also emphasized there: "Banks and especially issuing banks must be freed from political pressure, they must be managed on the principles of prudent finance." Thus, the question of the independence of the Central Bank is not far-fetched and is needed as a guarantee of the effectiveness of its activities.

At the end of the XIX-beginning of the XX century. in most countries, the issue of all banknotes was concentrated in one issuing bank, which became known as the central issuing bank, and then simply the central bank. The issuing bank has such large funds that none of the other banks can have, because. its liabilities are budget funds and cash in circulation. The issuing bank becomes the center for organizing banking in the country, around which all other banks and other credit institutions are grouped. The central bank serves as the axis, the center of the credit system. The state regulates the credit system through the central bank, that is, a set of measures aimed at a given change in the components of the loan capital market or its individual elements. Credit regulation of the economy is a set of measures carried out by the state through the monetary system and aimed at stabilizing the economic development of the country at the macro level.

The main legal forms of organizing the activities of the central bank in modern conditions are:

unitary central bank with 100% participation of the state in the formation of its capital (Russia);

a joint-stock company, part of whose shares is owned by the state (or without the participation of the state);

an association of an associative type (with or without the participation of state structures);

a system of independent banks collectively performing the functions of a central bank.

Historically, central banks were usually formed as joint-stock companies with special powers. Term central bank meant the largest bank located in the very center of the banking system. Then they gradually monopolized some specific functions, and at a certain stage the authorities nationalized them (while the shareholding status may be preserved, for example, the Bank of Italy or the National Bank of Austria).

Currently, cash emission is carried out mainly in the form of issuing banknotes into circulation, which are banknotes issued by the central bank and legally recognized as an official settlement and means of payment.

In a number of countries, the central bank has a monopoly on the issue of bilon (bargaining) coins, but basically in world practice, their minting is carried out by the Ministry of Finance (treasury). The central bank buys coins at face value and puts them into circulation along with banknotes.

Since the nominal value of modern money is much higher than the cost of their production, their issue allows you to receive the so-called seigniorage, or share premium. It represents the difference between the nominal value of a banknote (coin) and the actual costs of its production and issuance into circulation. It is obvious that the issue income from the issue of banknotes is the greater, the larger their denominations. It is calculated as the ratio of the increase in the monetary base to the gross domestic product or state budget revenues. Seigniorage is fully transferred to the state revenue.

The monopoly position of the central bank in the general economic monetary circulation gives it the opportunity to keep money circulation under indirect control and at subsequent stages of the development of funds in the form of current accounts or non-cash settlements. Central bank notes retain their key role only if their number is limited.

It is important to say that the issue of cash by the central bank does not coincide with the technical process of their production. The receipt of new printed banknotes in the vault of the central bank does not increase the cash supply in the national economy. Banknote emission is carried out in the process of carrying out by the central bank of a number of its operations.

Thus, the issue of cash is the issuance of banknotes by the central bank into circulation to meet the additional need of economic agents for cash, which arose as a result of the excess of cash issuance over their receipt by banks in the whole country.

The main sources of cash inflow into the economy are:

central bank lending to commercial banks;

the purchase by the central bank of government securities;

purchase of foreign currency and gold by the central bank.

It should be borne in mind that the volume of banknotes in circulation increases (that is, there is an issue of banknotes) only in the case of an increase in the net domestic and foreign assets of the central bank.

Money supply regulation mechanism

money supply

Let us consider the mechanism of regulation of the money supply in circulation, i.e. money offers. There are the following instruments for regulating monetary circulation:

open market operations with government securities;

discount rate policy (discount policy);

change in the required bank reserves ratio.

Operations on the open market are currently the main instrument for regulating money circulation in developed countries. By selling or buying government securities, the Central Bank, respectively, reduces or increases the amount of money in circulation. Note that usually the Central Bank conducts these operations jointly with a group of large banks.

If there is an excess of money supply in circulation, the Central Bank, in order to limit or eliminate this surplus, begins to actively offer government securities on the open market to banks and other economic entities. Due to the increase in the supply of government securities, their price falls, which makes them attractive to buyers. The population and banks are actively buying up government securities; transfer their money into them, which leads to a reduction in the money supply in circulation.

If there is a shortage of money in circulation, then the Central Bank usually pursues a policy aimed at expanding the money supply. He begins to buy government securities from banks and the public. As a result of increased demand, their market value increases, and the owners begin to actively sell them, receiving money for them from the Central Bank. This leads to an increase in the money supply in circulation.

As noted above, the Central Bank has a monopoly right to issue money. The emission monopoly for the central bank is necessary, first of all, to exclude abuses and promote the implementation of a unified state monetary policy. Monopoly, as a privilege granted by the state, means for the central bank the right to issue interest-free bills, the attractiveness of which is explained solely by the status of the only legal means of payment in the country, enshrined in law. It should be borne in mind that the monopoly on the issue of banknotes at the present stage does not at all mean its strict control or linkage with the goals of monetary regulation. The main task of monetary policy is the regulation of non-cash emission, the main source of which is commercial banks. At the same time, the issuing monopoly turned the central bank into the issuing and cash center of the banking system, since the obligations of the central bank (in the form of both banknotes and deposits of commercial banks) serve as a cash reserve for any commercial bank.

Thus, it is obvious that the main role in the issue is played by the state represented by the Central Bank. Although the emission directly takes place in the system of commercial banks, the Central Bank can significantly change the amount of money emitted by the bank, using various monetary policy instruments.

Banknote issue in modern conditions. Main channels of banknote issue

Banknotes are bills of issue banks that replace private commercial bills in circulation, serve as credit money and are exchangeable for gold or silver.

As credit money, banknotes differ significantly from paper money. While paper money arises on the basis of the function of money as a means of circulation, banknotes arise on the basis of the function of money as a means of payment, i.e. based on the sale of goods on credit, giving rise to commercial bills.

The issuance of banknotes is carried out in the order of crediting the turnover - by accounting for commercial bills of issue by issuing banks; meanwhile, paper money is usually issued to cover the deficit of the state budget.

It is worth saying that it is not usually written on banknotes that they are backed by gold, precious metals and other central bank assets, but this is reflected in the published balance sheets of the central bank. The collateral is the asset of the central bank, the main items of which are gold and foreign exchange reserves, a portfolio of government and securities. The issue of banknote issue has a legal basis. Quite often, legislation defines the nature of the security and, consequently, the indirect emission limits. Sometimes a fiduciary (trust-based) emission limit of no practical importance is stipulated. An important pattern of banknote circulation is the regular return flow of banknotes to issuing banks. Having been issued in the order of lending, banknotes are returned to the issuing banks when the borrowers repay the loans received from the banks. As for paper money, after issuance, they firmly settle in the channels of circulation.

The channels for issuing cash are the active operations of the central bank. Direct emission occurs as a result of an increase in the liabilities of the balance sheet of the central bank, therefore, the assets of the central bank are the security for the issue of banknotes. Thus, in modern conditions, the issue of banknotes is fiduciary (that is, not backed by gold), their circulation is based on the trust of the country's population in their issuer.

Banknotes are issued by the Central Bank in three ways:

granting loans to credit institutions;

rediscount of commercial bills;

lending to the treasury against the security of government securities;

issue of banknotes by exchanging them for foreign currency.

The modern mechanism for issuing banknotes is based on lending to commercial banks, the state and the increase in gold and foreign exchange reserves. The mechanism of issue predetermines the nature of the banknote credit security. The issue of banknotes when lending to banks is secured by bills of exchange, securities and other bank obligations; when lending to the state - with state obligations, and when buying gold and foreign currency - with gold and foreign currency itself. In other words, the assets of the central bank serve as collateral for the issue of banknotes. In this, in particular, the relationship between passive and active operations is manifested. The size of the passive operation of the central bank - "issue of banknotes" - depends on its active operations: loans to banks, the Treasury (Ministry of Finance), the purchase of foreign currency and gold. In this case, we can say that the listed active operations of the central bank are primary in relation to its passive operations.

The implementation of credit emission (emission of banknotes) by the central bank is an indicator of its independence. Any coverage of the monetary deficit, government spending by issuing money from the central bank (the so-called "budget emission") limits its independence in conducting monetary policy. If money is issued under the budget deficit, then we are actually talking about “money printing”, regardless of whether they are issued in cash or non-cash form. This issue has a strong inflationary impact.

The provision of banknote emission directly affects the stability of the national currency, therefore, in many countries, the norms and methods of such provision are determined by law. Each country has its own specifics, however, as a rule, only absolutely reliable short-term obligations are allowed to be used as collateral.

Deposit and check issue. The role of commercial banks in its implementation

Deposit and check issue

Before giving the concept of deposit-check issue, let's define what non-cash circulation, check and deposit are.

Non-cash circulation - the movement of value without the participation of cash: the movement of funds through the accounts of credit institutions, the offset of mutual claims.

Non-cash circulation is carried out with the help of checks, bills of exchange, credit cards and other credit instruments.

Non-cash money turnover covers settlements between:

enterprises, institutions, organizations of various forms of ownership that have accounts with credit institutions;

legal entities and credit institutions for obtaining and repaying a loan;

legal entities and the population on payment of wages, income from securities;

individuals and legal entities with the state treasury to pay taxes, fees and other obligatory payments.

The size of non-cash circulation depends on the volume of goods in the country, the price level, settlements, as well as the size of distribution and redistribution relations.

A deposit is an amount of money placed by a depositor in a bank for a fixed or indefinite period. The bank puts this money into circulation, and in exchange pays interest to the depositor. The deposit is the bank's debt to the depositor, that is, it is subject to return.

A check is one of the most common types of securities representing a monetary document of the established form. At its core, a check is an unconditional order, an order from the drawer (the person who issued the check) to a bank or other credit institution to pay the holder of the check (the person to whom the check was issued) a specified amount of money. This amount is withdrawn from the drawer's checking account at the bank and transferred or directly issued by the bank to the holder of the check. Such a check operation is preliminarily provided for by a check agreement between the bank and the issuer of the check. The bank can also pay checks as a credit to the drawer. Checks are registered (issued to a specific person), warrant (issued in favor of a person) or bearer (bearer). Checks are valid for a certain period. Bank checks are used for settlements between banks.

Check-deposit issuance is a type of banking operations in which banks create deposits and open loans, crediting money to deposits with the right to issue checks to customers within the limits of the account balance.

The essence of the deposit and check issue of money is the creation by banks of their loans of additional means of payment by increasing the current client accounts of deposits used for non-cash payments or cash payments (banknotes). In such cases, the issuance of loans precedes the opening of deposits, referred to as "imaginary". The creation (withdrawal) of non-cash money is a fundamental property of the banking system to expand deposits in the process of lending by multiplying any additional resources coming from outside this system (mainly the central bank by providing them with loans, buying securities, foreign currency), as well as reducing deposits when reduction of these resources - has received the name of multiplicative expansion and reduction of deposits.

This issue is carried out by commercial banks.

The following factors influence the deposit and check issue:

expansion of deposit operations;

expansion of credit operations (multiplication of deposits). As already noted, non-cash emission is carried out in the process of banks conducting their active operations. At the same time, an increase in non-cash money supply in circulation can occur during the implementation of active operations, both by the central bank and commercial banks.

The role of the central bank in non-cash issuance

Currently, there is no single point of view among economists regarding the role of the central bank in the non-cash emission of the banking system. The main positions can be summarized as follows:

non-cash emission is carried out mainly by the central bank; commercial banks, for the most part, can only redistribute non-cash money created by the central bank. The ability of commercial banks to create new deposits, that is, non-cash money, is severely limited by the amount of funds they have in a correspondent account with the central bank;

non-cash emission is carried out not only by the central bank - commercial banks create non-cash money supply in the course of their active operations in almost the same way as the central bank. The central bank would have a monopoly on non-cash issuance only if the required reserve ratio was 100%. With the existing partial reserve provision of deposits, commercial banks can create non-cash money, the volume of which exceeds the initial increase in their credit resources;

all non-cash emission is carried out by the system of commercial banks. Non-cash funds that make up the monetary base of the central bank are of a secondary nature, as they are its obligations to the banking system. In the process of lending, the central bank does not create the money supply, but redistributes the reserves of some banks for the temporary use of other banks or the government.

Accordingly, there are different points of view on the extent to which the central bank can control and regulate the volume of non-cash emission (that is, the supply of non-cash money) and, in particular, to what extent the central bank can control the growth of certain components of the monetary base.

The most common opinion is that both the central bank and commercial banks are involved in the process of non-cash issuance: if the central bank does not provide commercial banks with additional funds to maintain the circulation of cash and increase reserves, non-cash issuance of commercial banks will be severely limited or completely stopped. .

Thus, the basis of non-cash emission of the banking system is the increase in the monetary base of the central bank of the country.

The role of commercial banks in the implementation of deposit and check issue

“Commercial bank - a credit institution that has the exclusive right to banking operations to attract funds from individuals and legal entities to deposits; placement of these funds on its own behalf and at its own expense on the terms of repayment, payment, urgency; opening and maintaining bank accounts of individuals and legal entities”.

The Russian banking system, unlike the countries of Western Europe, was created on the basis of not private banks, but state-owned commercial banks. The first such “bank” (more like a pawnshop) was the Coin Office of Empress Anna Ioannovna, which since 1733 has been lending to people of all classes against the mortgage of gold and silver items, charging 8% per annum.

In accordance with the data of the Bank of the Russian Federation as of 01.01.2010, the number of Russian banks is 1058, of which 438 (42%) can be firmly attributed to small banks, because their authorized capital does not exceed 150 million rubles. Of the total number of Russian banks, 522 banks, or 49.3%, are registered in Moscow. With such a number of banks in Moscow and with an estimated population of Moscow of 10.38 million people, it turns out that there is one bank for every 19.0 thousand of the population of the capital.

It should be emphasized that a special function of banks is the creation of credit money in the form of bank deposits, which are used with the help of checks, cards, electronic transfers. Commercial banks form deposits by first accepting cash from their customers. At the same time, the total amount of money in circulation does not increase, only one type of credit money (banknotes) is replaced by another (deposits).

Secondly, the bank creates deposits on the basis of issuing bank loans, purchasing securities, foreign currency and gold from customers. This results in an increase in the amount of money in circulation. When a client withdraws cash from a bank account, the total money supply remains unchanged: the money simply moves from a non-cash form to cash. Writing off money from a deposit account (when repaying loans, selling securities, currency, gold by the bank to its customers) leads to a reduction in the money supply. In industrialized countries, commercial banks are the main issuer of money. Therefore, central banks regulate the process of issuing money primarily by influencing the scale and nature of the operations of commercial banks.

The main purpose of issuing non-cash money into circulation is to meet the additional needs of the enterprise for working capital. Commercial banks can issue only within the limits of their available resources, i.e., those funds that they have mobilized in the form of equity capital and funds in deposit accounts. With the help of these resources, it is possible to satisfy only the ordinary, and not the additional, need of the economy for working capital. Meanwhile, either in connection with the growth of production, or in connection with the rise in prices for goods, an additional need of the economy and the population for money constantly arises. Therefore, there must be a mechanism for issuing non-cash money that satisfies this additional need.

Banks play a very important role in the formation of the money supply. Credit instruments of circulation can perform the functions of money as a means of circulation, a means of payment, a means of accumulation, which ultimately affects the value of the money supply, and, consequently, the state of money circulation. Therefore, when conducting monetary policy, central banks primarily affect the ability of banks to create additional funds. The issuing and founding function of commercial banks is to mediate in the issuance and placement of securities of various corporations. With extensive economic information, commercial banks can advise clients on a wide range of economic and financial issues.

As market relations develop in the national economy, the importance of this function of commercial banks increases.

Due to the fact that banks perform important public functions, their activities in all countries are subject to state regulation. To enter the banking market, you must obtain a special permit - a license. In the Russian Federation, in order to carry out banking activities, a newly established bank may be issued licenses for the following types of activities:

carrying out banking operations with funds in rubles (without the right to attract funds from individuals to deposits);

carrying out banking operations with funds in rubles and foreign currency (without the right to attract funds from individuals in deposits);

attraction to deposits and placement of precious metals (such a license may be issued to the bank simultaneously with the license specified in paragraph above, subject to the appropriate conditions).

The essence and mechanism of the banking multiplier

The bank multiplier is the process of increasing (multiplication) of money in the deposit accounts of commercial banks during their movement from one commercial bank to another. Banking, credit and deposit multipliers characterize the multiplication mechanism from different perspectives.

The banking multiplier characterizes the process of animation from the standpoint of the subjects of animation. Here the answer to the question is given: who multiplies money? This process is carried out by commercial banks. One commercial bank cannot multiply money, it is multiplied by the system of commercial banks.

The credit multiplier reveals the engine of the multiplication process, that multiplication can only be carried out as a result of lending to the economy.

The deposit multiplier reflects the object of the multiplication - money in the deposit accounts of commercial banks (it is they that increase in the process of multiplication).

This mechanism can exist only in conditions of two-level (or more) banking systems, and the first level - the central bank manages this mechanism, the second level - the commercial bank forces it to act, and to act automatically, regardless of the desire of the specialists of individual banks. The bank multiplier mechanism is directly related to the free reserve.

Free reserve is a set of resources of commercial banks, which at a given time can be used for active banking operations.

In other words, commercial banks can carry out their active operations (issue loans, buy securities, currency, etc.) only within the limits of their available resources. The free reserve of the system of commercial banks is made up of the free reserves of individual commercial banks, therefore, from an increase or decrease in the free reserves of individual banks, the total amount of the free reserve of the entire system of commercial banks does not change. The value of the free reserve of an individual commercial bank is equal to:

Here K is the capital of a commercial bank; PR - attracted resources of a commercial bank (funds in deposit accounts); CC - a centralized loan provided to a commercial bank by a central bank; IBC - interbank credit; ORC - deductions to the centralized reserve, which is at the disposal of the central bank;

Resources that are already invested in the active operations of a commercial bank.

Consider the mechanism of the bank multiplier on a conditional example.

To simplify, we make three assumptions:

commercial banks currently do not have free reserves;

each bank has only two customers:

banks use their resources only for lending operations.

Customer 1 needs a loan to pay for supplies from customer 2, but bank 1 cannot provide him with a loan because he has no free reserve. Bank 1 applies to the central bank and receives from it a centralized loan in the amount of 10 million rubles. He forms a free reserve, at the expense of which a loan is issued to client 1.

Client 1 pays for the delivery from his current account to client 2. As a result, the free reserve in bank 1 is exhausted, but there is a free reserve in bank 2, since client 2 holds his current account in this bank, and attracted resources (PR) of this bank increase ( according to formula 2).

Part of the free reserve bank 2 puts at the disposal of the central bank in the form of deductions to the centralized reserve (CRR). We conditionally accept the rate of such deductions in the amount of 20% of the attracted resources. The rest of the 8 million rubles. free reserve is used to provide a loan in the amount of 8 million rubles. client 3.

Client 3 pays off this loan with client 4 served by commercial bank 3. Thus, this bank already has a free reserve, while it disappears from bank 2. Bank 3 part of the free reserve 1.6 million rubles. (20% of the PR) deducts to the centralized reserve, and the rest - 6.4 million rubles. is used to issue a loan to client 5. At the same time, the money on the current account of client 4 remains intact.

Client 5, using a loan received from bank 3, pays off with client 6, transferring them to his current account opened with bank 4. From here, a free reserve arises in bank 4. Again, 20% of this reserve (1.3 million rubles) is allocated to the centralized reserve, the rest is used to issue a loan in the amount of 5.1 million rubles. client 7.

Further, the process continues until the free reserve is completely exhausted, which eventually accumulates in the central bank due to deductions to the centralized reserve and reaches the size of the initial free reserve (10 million rubles in bank 1).

In accordance with the scheme, the money on the settlement accounts of clients 2, 4, 6, etc. (all even-numbered clients) remains intact and therefore the total amount of money on the settlement (deposit) accounts will, in the end, be many times greater than the initial deposit - 10 million rubles, formed when issuing a loan to client 1. However, money in deposit accounts can increase no more than 5 times, since the value of the multiplier coefficient, which is the ratio of the money supply formed in deposit accounts to the value of the initial deposit, is inversely proportional to the norm deductions to the centralized reserve.

Thus, if the rate of contributions to the centralized reserve is 20%, then the multiplier will be:

It will never reach 5, because a part of the free reserve is always used for other, non-credit transactions (for example, there must be cash in the cash desk of any bank for cash transactions).

Since the multiplication process is continuous, the multiplication factor is calculated for a certain period of time (a year) and characterizes how much the money supply in circulation has increased over this period of time.

The bank multiplier works regardless of whether loans are provided to commercial banks or they are provided to the government. In this case, the money will go to budget accounts in commercial banks, and they also refer to attracted resources (PR), so the free reserve of commercial banks, where these accounts are located, will increase and the bank multiplier mechanism will turn on.

It should be noted that the bank multiplier mechanism will work not only from the provision of centralized loans. It can also be involved in the case when the central bank buys securities or currency from commercial banks. As a result of this, the resources of banks invested in active operations decrease, and the free reserves of these banks used for credit operations increase, i.e., the mechanism of bank multiplication is turned on. The central bank can also turn on this mechanism when it reduces the rate of contributions to the centralized reserve. In this case, the free reserve of the commercial banking system will also increase, which, other things being equal, will lead to an increase in lending and the inclusion of a bank multiplier.

The management of the bank multiplier mechanism, and, consequently, the emission of non-cash money, is carried out exclusively by the central bank, while the emission is carried out by the system of commercial banks. The Central Bank, controlling the mechanism of the banking multiplier, expands or narrows the issuing capacity of commercial banks, thereby performing one of its main functions - the function of monetary regulation.

The essence of the credit multiplier is that multiplication can be carried out only as a result of lending to the economy, that is, the credit multiplier is the engine of multiplication. Banks make money by lending money. The process of making a profit from the funds invested by clients is called credit expansion or credit multiplication. If the client withdraws money from his account and the amount of deposits decreases, then the opposite process will occur - credit contraction.

Thus, the main purpose of a commercial bank is to attract savings and distribute them among borrowers. For businesses and consumers, they are the main source of credit.

Temporarily free cash concentrated in commercial banks is converted into loan capital. At the expense of these funds, banks provide loans to various economic entities - enterprises, the state, and the population. The concentration of funds of enterprises, government agencies, budget funds, population, etc. in commercial banks allows them to act as intermediaries for their clients in settlements and payments. A specific function of commercial banks is the release into circulation of credit instruments of circulation, which is carried out in the process of deposit and loan issue.

Money supply, its structure

With the development of forms of commodity exchange and payment and settlement documents, the composition and structure of the money supply have undergone changes. At the beginning of the 20th century, under gold circulation, the structure of the money supply was as follows:

gold coins - 40%;

banknotes - 50%

balances on the accounts of credit institutions - 10%;

The departure of gold money, first from the internal circulation, and then from the external one, introduced qualitative changes in the structure of the money supply. Real money completely disappeared from circulation. The dominant position was occupied by credit money, which began to act in cash and non-cash form.

Money supply - a set of purchasing, payment and accumulated funds that serve economic relations and belong to individuals and legal entities, as well as the state. This is an important quantitative indicator of the movement of money.

There are two factors that affect the money supply:

the amount of money, which is determined by the state - the issuer of money, its legislative power;

velocity of circulation of money - the influence is inversely proportional to the value of the money supply in circulation. It is determined by the amount of turnover of the ruble, which he will make in the process of performing the functions of circulation and payment for a certain period of time.

The money supply, or the totality of all money in circulation, is the most important quantitative indicator of money circulation. It includes several components that are distinguished based on the criterion of their liquidity.

Liquidity refers to the extent to which it is possible (or impossible) to use cash as a means of payment. Cash is considered highly liquid if it can be used directly for payments and settlements or easily converted into a means of payment. In accordance with their level of liquidity, certain types of funds that form part of the money supply that circulates in the country are combined into monetary aggregates.

To assess and analyze changes in the volume of money supply, various indicators, or monetary aggregates, are used. Aggregates are ranked as the liquidity of the types of funds included in them decreases. The degree of liquidity is determined by how quickly this money can be used to buy goods and services. The greatest liquidity has cash held by the buyer, or demand deposits. The money lying in the bank on a term deposit already has a number of restrictions in this respect: firstly, it is necessary to wait for the agreed term for withdrawing money from the account, and secondly, a commercial bank must be reliable. Gradually adding less liquid funds to the most liquid ones, we get a set of basic monetary aggregates M0, M1, ..., Mn (Fig. 1).

Figure 1. Structure of monetary aggregates

To determine the money supply of each particular country, a different number of units is used: in France - 2, in the USA - 4. In Russia, 4 units are used - M0, M1, M2, M3. The sum of all aggregates is called the total money supply. Let us consider in more detail their economic content.

The M0 aggregate includes cash in circulation (coins and paper money) plus cash balances at the cash desks of enterprises and organizations. This unit serves the cash turnover.

It should be noted that metallic money makes up an insignificant share of cash (2 - 3% of cash), they pay for small transactions for the purchase of goods or the receipt of services. The real value of the coin is much lower than the face value. It is made from cheap metal alloys. This is done in order to reduce the cost of money circulation, to prevent the accumulation of money in the same hands as a treasure, and also to avoid melting it into ingots, which would be done if the metal were of technical value. Thus, banknotes predominate in the M0 aggregate.

The M1 unit consists of the M0 unit plus funds on settlement accounts of legal entities, funds of insurance companies, demand deposits of the population in commercial banks.

Settlement account is an account opened by banks and legal entities to store funds and make settlements.

A demand deposit is a cash deposit that must be issued by the bank to the client at his first request. Therefore, we can talk about the availability of these savings for the depositor at any time. However, as we can see, this type of non-cash money is not included in the M0 aggregate. This is due precisely to the assessment of the ability of these funds to turn into goods and services as quickly as possible.

Unit M1 serves operations for the implementation of GDP, for the distribution and redistribution of national income, accumulation and consumption.

Most economists tend to consider the money supply in a narrow sense, that is, consisting of the M1 aggregate.

Other units - M2 and M3 - are called almost money . These are highly liquid financial assets that do not function directly as a medium of exchange, but can be easily transferred into cash or accounts without the risk of financial losses.

Aggregate M3 contains aggregate M1 plus time deposits of the population in commercial banks, as well as short-term government securities.

Unlike demand deposits, time deposits are funds placed by bank customers for a certain period specified in the documents. The client can receive the invested funds with interest only after the expiration of this period. Obviously, the operational availability of these non-cash money is lower than that of the components of the M1 aggregate.

As for government short-term securities, they are objectively the most reliable and liquid of all types of securities. Their guarantor is the state. In addition, these short-term securities are securities with a fast maturity. High reliability ensures their quick sale on stock exchanges.

Aggregate M3 contains aggregate M2 plus certificates of deposit and securities traded on the money market.

It is important to note that when we talk about the money supply, or the amount of money in circulation, we mean, first of all, the M1 aggregate (which includes M0). All other units (M2, M3), or almost money , have less liquidity, and the boundaries of these aggregates are very blurred.

As the aggregate index increases (aggregates M0, M1, M2, ...), the degree of liquidity of the components included in this aggregate decreases with an increase in their role as a means of storing value.

In Russia, in the practice of financial analysis and statistics, it was only with the start of market reforms in 1990 that the division of the money supply into aggregates began to be applied. Now about 20 components of the money supply are taken into account, which are combined in and M0, M1, M2, M3. M0 is cash in circulation.

M1, in addition to M0, includes funds of enterprises in the Russian Federation on settlement, current, special accounts in banks, as well as deposits of the population in savings banks on demand and funds of insurance companies. M2 equals M1 plus time deposits of the population in savings banks, including compensation. M3 consists of M2 and certificates, government bonds.

In Table 1, we present the monetary aggregate M2 (in billion rubles) in different years, starting from 2000.

Table 1

Dynamics of the main monetary aggregates of Russia

Datanal money (M0) Cashless funds (M2) 01.01.2000266,1448,4714,601.01.2001418.9735.51 154.401.01.01.2002583.81 028.81 612.601.01.01.01.01.01.01.01.01.01.01.01.01.01.01.01.01.01.01.01.01.01.01.01.EADE 63 212,601.01.20051 534,82 828,54 363,301.01.20062 009,24 035,46 044,701.01.20072 785,26 210,68 995,801.01.20083 702,29 569,913 272,101.01.20093 794,89 698,313 493,201.01.20104 038,111 659,715 697,7

The characterization of monetary aggregates will be incomplete without an explanation of the concept of "monetary base".

The monetary base is the amount of cash and cash from commercial banks deposited with the Central Bank as required reserves. This money not only has great liquidity, but also shows the viability of the Central Bank, its ability to fulfill its obligations. Some economists call it strong money or "high performance" money, because this category of money can be directly controlled by the Central Bank, which cannot be said about other elements of the total money supply. For example, the number and amount of bank deposits depends not only on the effectiveness of the Central Bank's policy, but also on how investors perceive this policy, whether they trust banks or not.

It should be emphasized that to justify the limits of money supply growth (M2), a money multiplier is used, which characterizes a possible increase in the money supply without negative consequences for price growth and inflation. Its value is defined as the ratio of M2 to the monetary base.

Considering that the monetary base and M2 include cash, the multiplier reflects an increase in household deposits and balances of funds of legal entities. If the share of these elements in the composition of M2 increases, then this means that the bulk of the money supply can increase in accordance with the value of the multiplier.

Conclusion

Thus, the issue of money is the main source of funds of the Central Bank, used to advance expanded reproduction. The issue of money is made in the amounts approved by the Government of the Russian Federation, and distributed in accordance with the intended purposes, it is carried out in two forms:

bank turnover money when lending to commercial banks;

cash, providing cash transactions for servicing the national economy and budget.

The formation of the money supply is a very complex and ambiguous process, quantified by many factors, including those not directly dependent on the monetary authorities. Nevertheless, forecasting and regulating the money supply in accordance with the needs of the real sector and the banking system is perhaps the main task of any central bank.

To date, the issue of money emission, or rather its essence and optimality, is one of the key issues of monetary policy, on which there is no unity of views among economists. In the economy of any state, emission plays an extremely important and sometimes contradictory role. On the one hand, it stimulates the credit expansion of commercial banks, saturates the economy with money, promotes the growth of business activity and, ultimately, leads to an increase in real output in the short term. On the other hand, and with this, perhaps, most economists agree, unjustified money emission inevitably leads to inflation and, as a result, to an imbalance in the economy and other extremely undesirable negative socio-economic consequences. Therefore, the solution of the problems of money emission is of great theoretical and practical importance.

In market relations, money is constantly present in economic circulation. New money in economic circulation comes from banks, which create them as a result of credit operations. That is why the credit nature of the issue of money is one of the most important principles of the organization of the monetary system of any state.

Literature:

Money. Credit. Banks: Textbook / Ed. G.N. Beloglazova. - M.: Yurayt, 2005;

Money. Credit. Banks: Textbook for universities / Ed. E.F. Zhukov. - M.: Unity-Dana, 2006;

Money. Credit. Banks: Textbook / Ed. O.I. Lavrushin. - M: Knorus, 2004;

Litovskikh A.M., Shevchenko I.K. Finance, money circulation and credit Textbook Taganrog: TRTU, 2003;

Miller R.L., Van Hoose D.D. Modern money. - M.: INFRA-M, 2005.

Sloman J. Economics. - St. Petersburg: Peter, 2006;

Tarasov V.I. Money. Credit. Banks: Textbook. - Minsk: Misanta, 2003;

Usov V.V. Money. Money turnover. Inflation. Tutorial. - M.: UNITI, 1999;

Finance, money circulation and credit. Textbook / Ed. Senchagova V.K., Arkhipova A.I. - M.: Prospect, 2000;

Finance, money, credit. Textbook / Ed. Sokolova O.V. - M.: Lawyer, 2000;

Economy. Textbook / Ed. Bulatova A.S.-M.: UNITI, 2000.

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The factors that determine the issuance of money include:

The conditions that are formed under the influence of these, as well as a number of other factors, almost invariably cause the issue of money.

Money is an integral part of the economic turnover of any modern society. The growing needs of the market require the constant issuance of banknotes, coins, non-cash options (credits, shares, bills, etc.). Every conscious citizen is obliged to understand what the emission of money is and in what forms it occurs.

Under the issue of funds understand the issue of banknotes, credit products, bills, shares. Only non-commercial state structures (state banks, treasuries) have the right to additional issue. The Central Bank organizes the issue of credit mass, while the Treasury issues banknotes and coins.

Each specific state has its own procedure for organizing money emission, regulates the volume of issued cash, forms of security, etc. The process of issuing money in Russia in domestic currency is an emission system. In most developed countries, there is an increase in non-cash turnover with a simultaneous decrease in cash volumes.

Speaking of the issue of money, the definition should include not only the literal designation of the printing of paper money or the minting of coins. The following situation will allow us to explain in simple terms the term "emission" and what such a phenomenon means for the economic life of the state.

The circulation of money consists of cash and non-cash resources and occurs through the issuance and use of paper banknotes and coins, or through amounts on accounts, deposits without time limits. It is important to understand that both options for the circulation of funds are closely interconnected in the process of performing their functions with the transition of one type of money to another.

Within the state, the issue of money is made in the form of paper banknotes and credit funds, which makes it possible to distinguish between the budget issue of money and the issue of credit funds.

The issue of money has always been carried out under the control of the state, which monopoly regulates the issue of cash. With the development of modern banking instruments, the issuance of credit money, bills of exchange, and checks is becoming increasingly important. With the help of rediscounting bills of exchange, the Central Bank of the Russian Federation issues banknotes. Thus, the concept includes a much broader meaning than the usual issue of cash.

The issuance of a new batch of funds does not always stimulate the growth of turnover; at the same time, there is a need to close accounts, withdraw technically and physically obsolete banknotes, and close debt obligations. Thus, when money is issued, the structure of the mass of money in circulation is redistributed.

Among the characteristics of the emission policy of the Russian Federation include:

Absence of obligation to provide the Russian ruble with gold.
The ruble acts as a payment instrument that circulates throughout the country.
The printing of banknotes, the regulation of their introduction into circulation are in the monopoly of the Central Bank of the Russian Federation, which guarantees the provision of cash with assets.
Limitation of exchange functions is prohibited, the duration of circulation of paper bills and coins is from one to five years with the possibility of further replacement.

By issuing money into circulation, the amount of mass used, an integral part of inflationary processes, increases. If gold money is used in circulation, the volumes are regulated by current needs, which means the accumulation of reserves in the treasury and a new launch into circulation. Currently, paper-money and credit circulation of funds is used with the inability to issue funds for self-regulation. With the development of production processes and the growth of sales of the products obtained, an increase in the money supply occurs. If supply exceeds demand, prices rise, which is called inflation.

The Central Bank, when issuing cash, puts funds into circulation based on the results of preliminary forecasts for volumes and regions. Funds enter into circulation in the form of banknotes and coins with a further transition between economic entities to financial structures and return back. The so-called monetary unit has no value equated to face value. Only cash is used in circulation, and non-cash funds are reflected in account entries.

The issue of deposits, checks is implemented within the framework of the issue of non-cash both by the Central Bank and privately. The deposit-check form is the basis for non-cash payments exceeding the amount of cash issue.

Most of the issue in the form of non-cash funds is represented by loans. The issuance of credit funds increases the bank multiplier, which ultimately leads to an increase in the money supply.

The issuing bank guarantees the purchasing power of the issued credit money only with its own reputation. Protection against possible risks of the bank is an adequate assessment of the client's solvency. Borrowed funds are issued for certain purposes, expenses, payments.

When issuing non-cash, the mass is replenished with credit resources according to the following scheme.

If there is a certain amount of goods in the country, a specific amount of money can balance it. The loan is issued from the funds that lie in other accounts. Although the funds are issued from the funds of other contributors, there is no actual weight reduction. As a result, the same amount can be taken into account both on the depositor's current account and as issued borrowed funds. As a result, the money supply increases by the amount of the loan.

After that, the total amount of money will exceed the value of the goods by the amount of credit. However, the borrower, having borrowed the amount from the bank, produces a certain product, which then goes on sale, balancing the excess mass.

One of the varieties of the process is the issuance of securities. This financial instrument involves solving specific tasks. The issue of securities (shares, bonds) has the right to carry out not only the state, but also commercial organizations.

The procedure for issuing securities is strictly regulated by the current laws of the Russian Federation.

The issuance of securities is intended primarily to raise capital. An organization or state issuing a batch of shares and other securities may undertake this in order to form the authorized capital of a commercial organization. Replenishment of the capital of the organization occurs with the help of non-borrowed or borrowed investments. Both state structures and ordinary Russian companies, which are joint-stock companies in various fields of activity, can act as an issuer. Issued shares are directed to the development and modernization of production, the solution of important issues for the implementation of commercial activities with new material resources. The issue is carried out with the introduction of a new batch of securities on the market, which means the possibility of acquiring them at free prices, based on the position of the company. Shares are not subject to internal distribution among the management team and lead to a reduction in the share of the initial shareholders.

Money turnover is a closely interrelated processes between business entities with a regular change of monetary forms. Thus, if a citizen hears about the issue of money, this means that it is planned to issue money into circulation, or a new batch of securities will appear or a credit direction will be activated.

Many people think that the Central Bank prints money. If we are talking about paper money and coins, then this is almost correct: the state company Goznak prints cash by order of the Central Bank. But cash is only a fifth of all money. Yes, most of the money in the modern economy does not exist in the form of cash (banknotes and coins in wallets), but in the form of non-cash money - records in the bank accounts of the population and enterprises. This money is created not by the Central Bank, but by commercial banks.

Imagine that you brought money to a bank deposit. The bank took them and gave them to someone on credit. As a result, this money has not ceased to be your money - you can receive it at any time, but the other person simultaneously received this money in the form of cash or into an account and can spend it. More money! In the economy, many people and firms are constantly borrowing and making deposits, banks are constantly issuing them, so a significant part of the money in the economy is created not by the Central Bank, but by commercial banks.

What decides how much money will be in the economy?

The amount of non-cash money is determined primarily by the desire of firms and citizens to take loans to expand production, purchase goods and services, that is, the objective needs of the economy. As for cash, their quantity is also not a whim of the Central Bank. Banknotes and coins are needed to pay for goods and services in the economy, and the regulator orders Goznak money based on the needs of the economy. The amount of money in the economy also increases when banks buy currency from people.

Why is too much money dangerous for the economy?

Can there be too much money in the economy? Yes. For example, this can happen due to excessive optimism of economic agents: it seems to banks that the economy is on the rise, and they begin to issue more loans, reduce requirements for borrowers, people take loans and start spending them. In fact, the economy is not ready to increase the production of goods and services. And then the prices just go up.

If an excessive amount of money threatens to accelerate inflation, the CBR intervenes. He raises the key rate, after which the rates on loans to the population and companies will increase - the demand for loans will decrease and lending will slow down, and inflation will not accelerate.

Issue of money, the impact of money issue on inflation

Emission - issue - emission - issue of money and securities in circulation.

The issue of funds is regulated by law and carried out by the state, which distributes this function between the central bank and the treasury. The Central Bank issues credit money - bank notes (banknotes). The Treasury issues treasury notes and change coins.

The issuance of banknotes in circulation in all forms leads to an increase in the money supply in circulation. Main forms of issue:

1) issue of credit money - banknotes;

2) deposit - check issue;

3) issue of securities.

According to the Constitution of the Russian Federation, the issue of money, i.e. the issue of money into circulation in the Russian Federation is carried out exclusively by the Central Bank of the Russian Federation (clause 1, article 75). The monetary unit in the Russian Federation is the ruble. The introduction and issue of other money in the Russian Federation is not allowed. The Constitution of the Russian Federation, while entrusting the Bank of Russia with the function of issuing money into circulation, does not limit the powers of the Bank of Russia to any one form of issue. The Bank of Russia issues money in cash and non-cash forms.

The Bank of Russia, in accordance with the procedure established by the legislation of the Russian Federation, issues into circulation and withdraws from circulation banknotes on the territory of the Russian Federation. Non-cash issue of money is carried out in the process of deposit and loan operations. The Bank of Russia regulates cash and non-cash issuance by means of monetary policy. The use of the emission of money directly to finance the deficit of the state budget of the Russian Federation is prohibited.

In order to limit the ability of commercial banks to issue deposits, the Constitution of the Russian Federation grants the Bank of Russia the exclusive right to issue money in all its forms. However, in the Federal Law, the monopoly function of the Bank of Russia to issue money is limited only to the issue of cash. The function of the Bank of Russia to organize their non-cash circulation is similarly limited and not provided for by the current legislation (Article 29 of the Federal Law). Non-cash, like cash, money circulation is subject to regulation in federal legislation. But this sphere of monetary circulation is not regulated by banking or other legislation. The procedure for issuing non-cash money and organizing their circulation by any state authority of the Russian Federation or the Bank of Russia is not legally defined.

Abroad, the emission of money is carried out by central (issuing) banks and treasuries (the former issue credit money - banknotes, the latter - treasury notes and change coins). Deposit and check issue, which serves as the basis for non-cash payments, is carried out by commercial and central banks. The issue of securities (shares and bonds) is carried out by joint-stock companies, as well as the state.

The central (issuing) bank in most countries belongs to the state. But even if the state does not formally own its capital (USA, Italy, Switzerland) or partially owns it (Belgium - 50%, Japan - 55%), the central bank performs the functions of a state body. The Central Bank has a monopoly right to issue banknotes into circulation (issue) - the main component of the cash supply. It keeps official gold and foreign exchange reserves, conducts state policy, regulating the monetary sphere and foreign exchange relations. The Central Bank participates in the management of the public debt and _ provides cash and settlement services to the state budget.

The main passive operation of the central bank and one of the forms of emission is the issuance of banknotes, the acceptance of deposits from commercial banks and the treasury, operations to form equity capital.

1. Fiduciary issue - the issue of banknotes, banknotes, unsecured by the stock of precious metals (primarily gold) of the issuing bank. Historically, the issue of banknotes was allowed only if there was a gold reserve, however, this rule was gradually abandoned. Now fiduciary emission is dominant.

The main source of central bank resources in most countries is the issuance of banknotes. At the present stage, the issue of banknotes is not backed by gold. The gold backing of banknotes has been abolished, although in some countries it formally continues to operate.

Central bank loans can be credited to commercial bank and treasury accounts opened with the central bank. In this case, there is not a banknote, but a deposit issue of the central bank.

The sources of resources of central banks are the deposits of the Treasury and commercial banks. Commercial banks may deposit part of their cash reserves in interest-free accounts with central banks, including

mandatory. In a number of countries, required reserves are credited to special accounts, usually without interest. This procedure applies, in particular, in Russia. Central banks can also open term accounts with a fixed interest rate for commercial banks. Typically, the bank's equity capital accounts for no more than 4% of liabilities.

2. Another form of issue is a deposit-check issue. It is produced by commercial banks and serves as the basis for non-cash payments. In terms of volume, the issue of deposits and checks significantly exceeds the issue of cash.

3. Also one of the forms of emission is the issue of securities.

The procedure for issuing equity securities, unless otherwise provided by the legislation of the Russian Federation, includes the following stages:

Adoption by the issuer of a decision on the issue of emissive securities;

Registration of the issue of emissive securities;

For the documentary form of issue - issuance of certificates of securities;

Placement of issuance securities;

Registration of a report on the results of the issuance of equity securities.

Issuing money can lead to inflation.

Inflation is a crisis state of the monetary system that arose in the middle of the 18th century in connection with the huge issue of paper money. The term "inflation" literally means "swelling", and has long been associated with the depreciation of money and rising commodity prices. However, the practice of foreign countries shows that inflation can occur with a relatively stable money supply.

Modern inflation is associated not only with the fall in the purchasing power of money as a result of rising prices, but also with the general unfavorable state of the country's economic development. It is due to the contradictions of the production process generated by various factors in the sphere of both production and sale, and money circulation, credit and finance.

Inflation is influenced by the following factors:

Issue of paper money;

The growth of the money supply exceeds production processes;

Rising costs and prices for goods;

inflationary expectation.

It is necessary to distinguish between internal and external causes of inflation. External - reduction in revenues from foreign trade due to falling fuel prices. The internal ones consist in the lagging behind of the branches of a consumer character, with the higher development of the branches of heavy industry.

There are two types of inflation.

1. Demand inflation. Traditionally, inflation occurs when there is excess demand. The demand for goods is greater than the supply of goods, due to the fact that the manufacturing sector is unable to meet the needs of the population. This excess demand leads to higher prices. A lot of money with a small number of goods.

2. Cost-push inflation. This phenomenon is expressed in rising prices due to rising production costs. Depending on the rate of price growth in the market, inflation is distinguished:

Creeping, with annual growth rates of prices by 3-4%. Such inflation is typical for developed countries, which consider it as a stimulating factor;

Galloping, with an average annual price growth rate of 10-50% (sometimes up to 100%), which prevails in developing countries;

Hyperinflation, with annual price growth rates of over 100%, characteristic of countries in certain periods when they are experiencing a radical breakdown of their economic structure.

Under the influence of inflation, the economic situation in the country is deteriorating, because:

Output declines as fluctuating and rising prices make production prospects uncertain;

There is a flow of capital from production to trade and intermediary operations, where capital turnover is faster and profits are higher, and it is also easier to evade taxation;

Speculation expands as a result of sharp and uneven price changes;

Credit operations are limited, since no one believes in debt;

The financial resources of the state are depreciating.

The main form of stabilization of the monetary system is the anti-inflationary policy of the state with the help of monetary reform and state regulation of the inflationary process. Monetary reform is a complete or partial transformation of the monetary system, carried out by the state in order to streamline and strengthen monetary circulation. It is carried out by various methods (nullification, restoration, devaluation, denomination) depending on the economic situation of the country, the degree of depreciation of money, state policy by adopting a one-time legislative act.

Nullification is carried out by canceling the old depreciated monetary currency and introducing a new one.

Restoration involves the restoration of the former gold content of the currency, an increase in the gold rate.

Devaluation - depreciation of the national currency in relation to foreign ones.

Revaluation - an increase in the exchange rate of the national currency in relation to foreign ones.

Denomination - a decrease in the denomination of the money supply in circulation by exchanging banknotes for new ones in proportion to their depreciation, i.e. zero-strike method.

The shock therapy method is a type of confiscatory currency reform. It includes the exchange of paper money at a deflationary rate, the complete or partial freezing of bank deposits of the population and entrepreneurs, and the widespread use of free pricing.

State regulation of the inflationary process means a set of government measures aimed at limiting price increases and stabilizing the monetary system through deflationary and income policies.

Deflationary policy includes methods of limiting money demand by reducing government spending, raising interest rates on loans, increasing the tax burden, and limiting the money supply. But it does not contribute to economic growth. The income policy involves the control and complete freezing of prices and wages, or the establishment of strict limits on their growth.

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