The financial system and its constituent elements. Financial system of the state and its main elements
The concept of “financial system” is used in two meanings:
firstly, as a set of institutions involved in monetary transactions (funds, companies, banks), and, secondly, as a system of financial relations. Moreover, the concept of “system” presupposes the presence of connections. Taking this into account, the financial system is a collection of various spheres or links of financial relations, each of which is characterized by features in the formation and use of funds of funds and a different role in social reproduction.
The financial system of Russia includes the following links of financial relations: state budget, extra-budgetary funds, state credit, insurance funds, stock market, finance of enterprises of various forms of ownership.
All the variety of listed links in financial relations can be divided into two interconnected subsystems. The first includes national finances, meeting the needs of expanded reproduction at the level of the national economy as a whole. Secondly, finances enterprises(economic entities) that are used to support the reproduction process with funds at the level of individual enterprises.
These two subsystems differ in the methods of forming and using funds of funds. National finances - these are centralized funds of monetary resources that are created through the distribution and redistribution of national income created in sectors of material production (second subsystem). The need to concentrate a significant portion of financial resources at the disposal of the state is caused by the important role it plays in the field of economic and social development of the country 1 .
The forms of use of these resources are budgetary and extra-budgetary funds that meet the needs of the state in solving economic, political and social problems. The insurance parts of the financial system use other forms and methods of formation and use of monetary funds. As for the finances of enterprises, these decentralized funds of funds are formed from the cash income and savings of the enterprises themselves,
Let us emphasize once again that, despite the delimitation of the scope of activity and the use of special methods and forms of formation and use of monetary funds in each individual link, the financial system is a unified system, since it is based on a single source of resources for all links. The unifying basis of a unified financial system is the finance of enterprises, since they are directly involved in the process of material production. The source of centralized state funds of funds is the national income created in the sphere of material production, i.e., in the same enterprises.
However, such a connection between national finances and the finances of enterprises is explained not only by the fact that they have a single source of their formation, the national income created in the sphere of material production. Having accumulated funds in centralized state funds, for example in the budget, at the expense of enterprises in the sphere of material production, the state also directs part of these resources to the development of material production, but already the most necessary sectors of the economy at a given time. Let’s say the country’s budget was replenished with income from the oil and gas or fuel and energy complex, and these incomes were directed to the development of enterprises in the food or medical industries, which are so necessary at the present time. After all, the process of expanded reproduction in many enterprises is carried out not only at the expense of their own funds, but also by attracting a national fund of funds in the form of budgetary allocations, as well as the use of bank loans. This means that national finance, which the state has the opportunity to maneuver, plays a significant role in ensuring the development of certain sectors of the national economy, in the redistribution of financial resources between sectors of the economy, as well as between regions of the country, between production and non-production spheres, between individual groups and layers of the population. This interconnection and interdependence of the constituent parts of the financial system reveals the unified essence of finance, as well as the unity of the Russian financial system.
Let us briefly consider the economic content of the components of national finance, which include the state budget, extra-budgetary funds, state credit, insurance funds and the stock market.
The state budget- This is the main link of the entire financial system. The state budget is the centralized monetary income of the state. Sometimes a simpler and more concise definition is given: The state budget is a list of state income and expenses. The state budget consists of two interconnected parts: revenue and expenditure. The revenue side of the state budget indicates the sources of funds and their quantitative characteristics. The expenditure part of the state budget indicates the directions, areas in which money is spent, and their quantitative parameters.
By the size of the state budget and its structure, one can judge the level of economic development of the country, the nature of its economic system and the financial situation of the main part of the population. And indeed, what can be said about a country whose budget has a huge deficit, that is, the expenses provided for in it significantly exceed the planned income? It is clear that in this case some investment projects will remain on paper, some of the state employees will again not receive their salaries on time, and financial holes in one place will be patched up due to the formation of holes in other places. Another thing is that the budget has no deficit, and even better if it has a surplus, i.e. with income exceeding expenses.
Let's analyze the structure of the expenditure side of the state budget. If the main or significant part of the expenses is directed towards the acquisition of new types of weapons and the maintenance of the army, then this is a militaristic budget. The size of social expenditures in this case cannot be large; on the contrary, they are extremely insignificant, and, consequently, the people in such a country cannot live well. And it’s a completely different matter if the bulk of the resources are directed to social purposes: healthcare, education, housing construction, support for the elderly, etc. Note that in the recent past, military spending dominated the USSR budget. At present they are sometimes below the minimum required to maintain an effective army.
The main and main source of the formation of the state budget are taxes from enterprises and the population (approximately 75-80%). The rest of the state budget revenue is replenished from customs duties, government loans, and money issues.
In addition to the state budget, in any economy, off-budget funds.
Off-budget funds are funds from the federal government and local authorities associated with the financing of expenses not included in the budget.
The formation of extra-budgetary funds is carried out through mandatory targeted contributions, which for an ordinary taxpayer (enterprise, individual) are no different from taxes. The main amounts of contributions to extra-budgetary funds are included in the cost price and are set as a percentage of the wage fund. Extra-budgetary funds are separated from budgets and have a certain independence.
The total number of federal extra-budgetary funds is more than 40. The main ones in size and importance are social funds - the Pension Fund, the Social Insurance Fund, the State Employment Fund, the Federal Compulsory Medical Insurance Fund. Economic ones include the Russian Fund for Technical Development and industry off-budget R&D funds, financial funds for supporting industries, investment funds, etc.
The total income (and expenses) of all extra-budgetary funds is quite impressive. In recent years, they have exceeded 60% of state budget revenues. Extra-budgetary funds have a specific purpose, which guarantees the use of funds in full. According to the laws of the Russian Federation, extra-budgetary funds are prohibited from being used to finance government and administrative bodies, as well as other government agencies. Funds are to a certain extent a financial reserve. For example, pensions must be paid uninterruptedly, and therefore the funds of the Pension Fund must be used strictly for their intended purpose.
An important element of national finance is state loan(not to be confused with a loan from commercial banks).
The state, and this is typical not only for Russia, constantly experiences a great need for financial resources and money. Revenues provided for in the budget, as a rule, fall far short of the amount of expenses that the state must or intends to make. Additional money is needed to cover the budget deficit. The easiest way to get additional money is to carry out an additional issue, i.e. print the required amount. But a simple solution, as a rule, is not always correct. Emissions (now everyone in Russia knows about this) lead to inflation, depreciation of money, rising prices, a decrease in the purchasing power of wages, pensions, discontent among the population and other undesirable consequences for the population and the government. Therefore, the government resorts to additional printing of money, but in measured amounts, trying to prevent high inflation. To attract additional money, the state uses a different way.
To resolve the contradiction between the magnitude of the necessary needs of society and the state’s ability to satisfy them from the budget, Russia, like most countries in the world, uses government loans. The lenders are individuals and legal entities, the borrower is the state represented by its bodies. The state attracts additional financial resources by selling bonds, treasury bills and other types of government securities on the financial market.
Financial market - an integral part of the financial system. A financial market is a market where capital circulates.
The financial market in Russia began to develop rapidly since 1992, when the government began to take decisive steps to liberalize almost all aspects of economic activity. This process was characterized primarily by the emergence of a fairly ramified structure of the financial sector, consisting of the banking system, investment and pension funds, stock exchanges and insurance companies. The development of the financial sector was greatly influenced by the privatization process, which contributed to the development of market infrastructure, improvement of the relevant legislative framework, involvement of the population in operations on the stock market and the formation of a market mentality among people.
In the first year of economic reforms (1992), the state of the Russian financial market was quite unstable, transactions in the money market and securities market were characterized by low volumes. The banking sector was poorly developed, especially in the regions. By 1995, a fairly broad infrastructure had been formed in the Russian financial market, and independent large segments had emerged. Currently, there are various sectors of the financial market: the interbank loan market, the securities market, and the foreign exchange market.
As noted, the centralized part of the financial system is responsible for the process of redistribution of national income and gross domestic product. Redistribution occurs through budgetary, insurance relations and relations arising in the financial market. All these relationships are interconnected.
The budget needs to raise funds to cover the deficit. To do this, the state issues and sells government securities, such as government loan bonds. It should be emphasized that currently the government securities market is the most significant in terms of volume in the financial market.
Government securities issued by the Ministry of Finance of the Russian Federation are represented by the following types of securities:
government short-term bonds (GKOs);
federal loan bonds (OFZ);
State Savings Loan Bonds (GSLOs).
The main purpose of issuing public internal debt bonds (we emphasize again) is to mobilize funds to finance the expenses provided for by the Federal Budget Law for each year. The priority in solving this problem should have been the reliability of the entire borrowing structure, as well as optimization of the cost of domestic debt and the timing of its repayment. It must be emphasized that at first, at least until 1996, this was the case. Later the situation changed.
So, the widely known GKOs, OFZs, OGZZs and other bonds that were sold on behalf of the state by the Russian Ministry of Finance with the payment of relatively high interest rates are all instruments for borrowing funds. This form of loan allowed the borrower, i.e. the state to direct mobilized additional financial resources to cover the budget deficit without issuing emissions for these purposes. The temporarily mobilized free funds of the population and legal entities were used to finance economic and social programs, i.e., state credit was a means of increasing the financial capabilities of the state.
Government credit placed within the country is internal loan. If it is located in other countries, then it is - external loan. Based on the period of raising funds, loans are divided into short-term (up to 1 year), medium-term (from 1 to 5 years), and long-term (over 5 years). The mobilization of enormous financial resources is a consequence of large public debt. The size of the government loan is included in the amount of the country's government debt. Public debt represents the entire amount of government loans issued but not repaid, plus interest accrued on them, as of a certain date or for a certain period. At the same time, the state external debt- this is the debt on outstanding external loans and unpaid interest on them. Domestic debt consists of debt from past years and newly arisen debt within the country.
If we talk about Russian public debt, its amounts are excessively high. If we take into account that the costs of servicing the public debt are made at the expense of the state budget of the Russian Federation, it becomes clear that a significant part of the state budget revenues is forced to be directed not to economic development or social goals, but to repaying the debt. In addition, it takes one generation, and another has to pay.
The huge public debt of modern Russia, both internal and external, can lead to the so-called default- refusal to fulfill previously assumed obligations to repay the debt. This happens when, due to an erroneous financial policy, the amount of debt repayment far exceeds the state’s available capabilities. This condition reflects the economic and financial crisis in the country.
Insurance funds provide compensation for losses incurred from natural disasters and accidents, and also contribute to their prevention.
Insurance- this is a special socio-economic structure where the object of purchase and sale is insurance protection. We emphasize that in a market economy, unlike the command-administrative system that previously existed in our country, when social guarantees, albeit at a low level, existed and were stable, and the insurance business was built on the principles of a state monopoly, the role of insurance increases sharply. The fact is that in a market economy all economic entities operate under risk conditions. And every person now must rely mainly on himself, on his safety stock, his savings. During your work, you need to purchase a medical policy for yourself, health insurance, earn a decent pension, etc.
Let us briefly consider the functions that insurance performs. First of all, this is the formation of a fund of funds, carried out as payment for the risks that insurance companies take upon themselves, on their own responsibility. Insurance can be voluntary or compulsory.
The leading function of insurance is compensation for damage to legal entities, compensation for damage and material support for individuals who are citizens of the country. One of the functions of insurance is to prevent an insured event and minimize possible insured damage. We are talking about implementing a set of measures to prevent or reduce possible losses or accidents.
Insurance, finally, is an important means of forming the country's investment potential. After all, the insurance fund of insurance companies is temporarily free money that can be invested in production, real estate, banks, securities, etc. Note that in Western countries, insurance companies are financial giants owning hundreds of billions of dollars. As for the financial capacity of the Russian insurance market, it is still very small, and therefore Russian financial companies have not yet become a significant source of investment in the economy 1 .
Among the links in the financial and credit system, a significant place is occupied by stock market. It can be distinguished as an independent link, since the stock market is a special type of financial relations arising as a result of the purchase and sale of special financial assets - securities.
The main task of the stock market is to ensure the process of capital flow into industries with a high level of income. The stock market serves to mobilize and effectively use temporarily free funds. Its peculiarity is that stock market participants expect to receive a higher income compared to investing money in a bank. However, the flip side of increased income is increased risk.
The second subsystem of the Russian financial system is enterprise finance.
The finances of enterprises of various forms of ownership are the basis of the country's unified financial system. They serve the process of creation and distribution of social product and national income. This condition determines the degree of provision of centralized funds with financial resources. The enterprise operates profitably, stands firmly on its feet, and the budget is good, since there is someone to collect taxes from. The enterprise is unprofitable, the products are not on the market, there is no money in the accounts - and the treasury is in trouble. What will you recover from the losses? Such an enterprise itself needs financial assistance.
Enterprise finance is part of the financial system, its link and characterizes monetary relations associated with the formation, distribution and use of monetary resources to fulfill their obligations to the state, other enterprises and firms, employees, etc.
In the general structure of financial relations, this part of the financial system occupies a decisive, or key, position, because it is the real sector of the economy. Here material wealth is created, goods are produced and services are provided. At the enterprise level, the following forms of monetary relations arise:
related to the formation of the authorized capital and distribution of income;
related to contractual obligations with other enterprises (distribution of profits, investment of funds in shares, bonds, other securities), receipt of dividends, etc.;
developing between enterprises and insurance organizations and various insurance funds;
with banks (loans, repayment of interest, penalties, etc.);
with the state budget (taxes and other obligatory payments, deductions);
with higher structures.
In a market economy, an enterprise operates on the basis of commercial calculation, the purpose of which is the mandatory receipt of profit. The state is interested in profitable work and strives to create favorable conditions for the successful development of entrepreneurial activity.
Under the financial management mechanism refers to a system of organizational, economic and legal measures to regulate the country’s financial system. It includes three components: a) monitoring (supervision) of the state of finances; 6) legal regulation of the financial system; c) control over the financial activities of business entities.
Monitoring the state of finances of the country is carried out by the highest legislative bodies of power (Federal Assembly, its two chambers, etc.).
Legal regulation of the financial system carried out by the highest legislative bodies of power, the President of Russia.
Control over financial activities of all business entities is carried out by both legislative and executive authorities (Ministry of Finance, Tax Service, etc.).
It is necessary to distinguish between state and non-state control. The principle of separation of powers, enshrined in the Constitution of the Russian Federation and in the Constitutions (statutes) of the constituent entities of the Federation, provides for control over the financial activities of executive authorities by the president and representative authorities. Presidential control over finances is exercised by issuing decrees on financial issues: signing federal laws; appointment and dismissal of the Minister of Finance of the Russian Federation; submitting a candidate to the State Duma for appointment to the post of Chairman of the Central Bank.
Non-state financial control is carried out without the direct participation of the state, but in accordance with state laws and regulations. Non-state types of financial control include intra-economic and audit control.
On-farm control is carried out by the enterprise itself, its economic services - accounting, financial department, financial management service.
Audit control is carried out in two forms: mandatory and proactive. An initiative inspection is carried out by decision of the business entity itself. Mandatory audit is carried out in accordance with the established procedure, provided for by the relevant government decree. The initiators of the audit can be government bodies: the prosecutor's office, the treasury, the tax service and the tax police, etc. The audit can be carried out by both individuals who have passed state certification and audit firms (including foreign ones), which can have any organizational and legal form provided for Russian legislation. After receiving a license to carry out auditing activities, they are included in the State Register of Auditors and Audit Firms. Audit control in Russia is in its infancy. Its main drawback is the low level of qualifications of audit service employees, and the vagueness of the regulatory documents governing their work.
The financial system is a set of different spheres of financial relations, each of which is characterized by features in the formation of funds of funds and a different role in social reproduction.
The financial system of the Russian Federation includes the following links of financial relations, which can be divided into two subsystems:
1) decentralized finance:
· enterprise finance
2) centralized finance:
· the state budget;
· off-budget funds;
· state loan;
· insurance funds;
· stock market;
The basis of the financial system is the finance of enterprises, since they are directly involved in the process of material production.
National finance plays a leading role in ensuring the pace of development of all sectors of the national economy and in the redistribution of financial resources of the economy. National finances are related to the finances of enterprises.
On the one hand, the main source of the state budget is the national income created in the sphere of material production, on the other hand, the process of expanded reproduction is carried out not only at the expense of its own funds, but also with the attraction of budgetary allocations and the use of bank loans.
The interconnection of the components of the financial system is due to the single essence of finance. Through the financial system, the state influences the formation of centralized and decentralized funds, accumulation and consumption funds, using taxes, the state budget and credit.
The state budget– a form of formation and use of a centralized fund of funds to ensure the functions of public authorities.
Off-budget funds- a means of the federal government and local authorities related to the financing of expenses not included in the budget:
o pension fund
o social insurance fund
o compulsory health insurance fund
The pension fund is formed from insurance contributions from employers and working citizens, funds from the federal budget and is used to pay pensions.
The Social Insurance Fund is formed from insurance contributions from employers, funds from the federal budget, voluntary contributions from the population and is used to pay various types of benefits.
The compulsory health insurance fund is formed from deductions from the wage fund and is used to provide citizens with a free guaranteed volume of medical services.
State loan– a special form of credit relations between the state and a legal entity/individual regarding the mobilization by the state of free funds of the organization and the population.
Lender – legal entity/individual
The borrower is the state.
Insurance funds provide compensation for losses from natural disasters and accidents, and also contribute to their prevention.
The essence of insurance lies in a system of redistribution relations, including the distribution of damage between insurance participants and compensation from special funds formed from contributions from policyholders.
Stock market– a type of financial relationship arising as a result of the purchase and sale of special financial assets, i.e. valuable papers.
The main task is to ensure the process of capital flow in industries with a high level of profitability.
The stock market serves to mobilize and effectively use temporarily free funds.
5. The system and legal status of the bodies carrying out the financial activities of the state (general characteristics).
There is a system of management bodies for which financial activity itself is the main one, determining the content of their competence. This is a system of financial and credit authorities specially created to manage finances and exercise control in this area as its integral function. These bodies cover with their influence all parts of the financial system - the budget, special-purpose extra-budgetary funds, credit, insurance, finance of enterprises, organizations, institutions.
Ministry of Finance of the Russian Federation in accordance with the Regulations on the Ministry of Finance of the Russian Federation (approved by Decree of the Government of the Russian Federation of June 30, 2004 No. 329) is a federal executive body exercising the functions of developing state policy and legal regulation in the field of budgetary, tax, insurance, currency , banking, public debt, etc.
Carries out coordination and control over the activities of the Federal Tax Service, the Federal Insurance Supervision Service, the Federal Service for Financial and Budgetary Supervision, the Federal Financial Monitoring Service and the Federal Treasury, as well as monitoring the implementation by the Federal Customs Service of regulatory legal acts on issues of calculation and collection customs payments, determination of the customs value of goods and vehicles.
The system of the Ministry of Finance of the Russian Federation has created Federal Service for Financial and Budgetary Supervision, approved by Decree of the Government of the Russian Federation of June 15, 2004 No. 278. The Federal Service for Financial and Budgetary Supervision is a federal executive body that exercises the functions of control and supervision in the financial and budgetary sphere, as well as the functions of a currency control authority. The Federal Service for Financial and Budgetary Supervision is under the jurisdiction of the Ministry of Finance of the Russian Federation.
Federal Treasury
Central Bank of the Russian Federation (Bank of Russia). A special position among the federal bodies engaged in financial activities is occupied by the Central Bank of the Russian Federation (Bank of Russia), which operates in accordance with the Federal Law of July 10, 2002 No. 86-FZ “On the Central Bank of the Russian Federation (Bank of Russia)”. The Central Bank of the Russian Federation (Bank of Russia) performs the functions of a government body vested with power. On issues within its competence, the Bank of Russia has the right to issue regulations that are binding on federal government bodies, government bodies of constituent entities of the Russian Federation and local governments, all legal entities and individuals.
6. Main functions and powers of the Ministry of Finance of the Russian Federation.
Ministry of Finance of the Russian Federation in accordance with the regulations on the Ministry of Finance of the Russian Federation, it is a federal executive body that carries out functions by production public policy and regulatory regulation in the field of budgetary, tax, insurance, currency, banking activities, public debt, auditing, accounting and financial reporting, production, processing and circulation of precious metals and precious stones, customs duties, determining the customs value of goods and vehicles, investing funds to finance the funded part of a labor pension, organizing and conducting lotteries, production and turnover of secure printing products, financial support for the public service, combating money laundering and the financing of terrorism.
Ministry of Finance of the Russian Federation coordinates and controls activities the Federal Tax Service, the Federal Insurance Supervision Service, the Federal Service for Financial and Budgetary Supervision, the Federal Financial Monitoring Service and the Federal Treasury under its jurisdiction, as well as control over the implementation by the Federal Customs Service of regulatory legal acts on the issues of calculation and collection of customs duties, determination of customs value goods and vehicles.
Ministry of Finance of the Russian Federation guided by in its activities Constitution Russian Federation, federal constitutional laws, federal laws, acts of the President of the Russian Federation and the Government of the Russian Federation, international treaties of the Russian Federation, as well as the Regulations on the Ministry of Finance of the Russian Federation.
Powers of the Ministry of Finance
The Ministry of Finance of the Russian Federation exercises the following powers:
1. contributes to the Government of the Russian Federation draft federal laws, regulatory legal acts of the President of the Russian Federation and the Government of the Russian Federation and other documents that require a decision from the Government of the Russian Federation on issues related to the established area of competence of the Ministry and the areas of competence of the federal services subordinate to it, as well as a draft work plan and forecast performance indicators Ministries;
2. on the basis and in pursuance of the Constitution of the Russian Federation, federal constitutional laws, federal laws, acts of the President of the Russian Federation and the Government of the Russian Federation The ministry adopts the following regulatory legal acts:
§ the procedure for maintaining a consolidated budget list of the federal budget;
§ the procedure for applying the budget classification of the Russian Federation;
§ the form of tax returns, tax calculations and the procedure for filling out tax returns;
§ the procedure for generating reports on the execution of the federal budget
Main functions and powers of the Federal Treasury.
Federal Treasury is a federal executive body (federal service) that, in accordance with the legislation of the Russian Federation, carries out law enforcement functions to ensure the execution of the federal budget, cash services for the execution of budgets of the budget system of the Russian Federation.
Treasury system budget execution is that it establishes a special control structure - the treasury - between taxpayers and budget recipients, on the one hand, and banks, on the other.
The Treasury controls both flows of budget resources - both revenue and expenditure - in one account. This ensures the principle of cash unity, and also accelerates the turnover of budget funds. The treasury system allows detailed information on budget execution.
The Treasury performs the following functions:
§ ensures accounting of all budget revenues;
§ confirms budgetary obligations (i.e. obligations to spend budgetary funds), and makes a permitting inscription for the right to make expenses, i.e. authorizes expenses within the limits of budgetary obligations;
§ makes payments on behalf of recipients of budget funds.
The treasury structure consists of three parts:
1. Main Directorate of the Federal Treasury (GUFK). This department carries out consolidated accounting of income and expenses of the federal budget.
2. Directorates of the Federal Treasury (UFK) in regions, territories and republics within the Russian Federation, in the cities of Moscow and St. Petersburg.
3. Branches of the Federal Treasury in cities and urban regions (OFC).
The Federal Treasury exercises the following powers in the established field of activity:
§ communicates to the main managers, administrators and recipients of federal budget funds the indicators of the consolidated budget schedule, limits of budget obligations and funding volumes;
§ keeps records of operations on cash execution of the federal budget;
§ opens accounts with the Central Bank of the Russian Federation and credit organizations to account for federal budget funds and other funds in accordance with the legislation of the Russian Federation, establishes regimes for federal budget accounts;
§ opens and maintains personal accounts of the main managers, administrators and recipients of federal budget funds;
§ maintains a consolidated register of the main managers, administrators and recipients of federal budget funds;
§ keeps records of the indicators of the consolidated budget breakdown of the federal budget, limits of budget obligations and their changes;
§ compiles and submits to the Ministry of Finance of the Russian Federation operational information and reporting on the execution of the federal budget, reporting on the execution of the consolidated budget of the Russian Federation;
§ ensures, within its competence, the protection of information constituting state secrets;
§ ensures timely and complete consideration of citizens’ appeals, making decisions on them and sending responses to applicants within the period established by the legislation of the Russian Federation;
§ provides mobilization preparation for the Federal Treasury;
The financial system of the Republic of Belarus includes the following two large areas: finance of enterprises, institutions and organizations (decentralized finance) and national finance (centralized finance).
Enterprise finance is a system of monetary relations associated with the formation and use of enterprise funds. They include monetary relations that arise between: enterprises (this is mainly payment for products and services); enterprises and higher organizations (formation of centralized funds of ministries and departments); enterprises and their structural divisions; enterprises and the state budget (payments to the budget, financing from the budget); enterprises and banking institutions (obtaining loans, repaying them, paying interest for using the loan), etc.
Enterprise finance is the initial link of the financial system; it is the basis of national finance. This is explained by the fact that it is at enterprises in the process of material production that a decisive share of the country's national income is created - the main source of the formation of both decentralized and centralized monetary funds. Therefore, the financial situation of the republic as a whole largely depends on the state of this link in the financial system.
Enterprise finance (decentralized funds) consists of two subspheres: finance of material production enterprises and finance of institutions and organizations in the non-productive sphere (Fig. 2.1).
The decisive role in the national economy of the Republic of Belarus is played by the finances of material production enterprises, which directly serve production and the circulation of enterprise funds. It is in this subsphere that the decisive part of the financial resources of enterprises is created, a significant share of which is then directed through taxes to generate the revenue side of the state budget.
Depending on a number of objective factors that significantly influence the organization of financial relations, the formation and use of monetary funds, each subsphere of the financial system can be divided into separate units. So, for example, depending on the sectoral focus in the first subsphere (finance of material production enterprises), we can distinguish such links in the financial system as finance of industrial enterprises, agriculture, construction, freight transport, communications, trade and procurement, etc. (Fig. 2.2 ).
Rice. 2.1.
Rice. 2.2.
In the second (non-production) subsphere, there are such links as education finance; finance of culture and art; health and physical education finance; finance of science and scientific services; passenger transport finance; finance of housing and communal services and consumer services; finance of commercial insurance, credit and other institutions; finance of public organizations; finances of the country's defense, etc. (Fig. 2.3).
Depending on the form of ownership, the following links are distinguished within the first and second subspheres of the financial system:
1) finances of enterprises, institutions and organizations based on state ownership;
2) finances of enterprises, institutions and organizations based on collective ownership;
3) finances of enterprises, institutions and organizations based on joint ownership;
4) finances of enterprises, institutions and organizations based on private property;
5) finances of enterprises, institutions and organizations based on mixed forms of ownership (Fig. 2.4).
Rice. 2.3.
financial material non-productive relationship
Rice. 2.4.
Among the listed links, the leading place to date is occupied by the finances of enterprises based on state ownership. This is explained by the fact that the share of state-owned enterprises in the Republic of Belarus is more than 80%. In the future, as property is privatized and denationalized, the finances of enterprises based on non-state forms of ownership will become increasingly important.
In the conditions of further development of market relations, all enterprises of material production and a small part of non-production organizations operate on the basis of commercial calculation. It is a method of management that requires the obligatory receipt of profit sufficient for simple and expanded reproduction.
The overwhelming majority of non-production organizations carry out non-commercial activities, i.e. activities that do not pursue the goal of making a profit (cultural organizations, public education institutions, health care, etc.). If such institutions in some cases receive income (for example, state universities for educating an excess of students), then they are used for the development of these institutions. All costs in non-production institutions are, as a rule, covered by budget funds (with the exception of housing and communal services and consumer services, commercial insurance, credit and other institutions).
National (centralized) finances include such links as the state budget; extra-budgetary funds (including the social protection fund); state property, personal and other types of insurance fund (liability insurance, etc.); state credit (Fig. 2.1).
National finance can be defined as a system of monetary relations for the formation of centralized funds of funds and their use for national needs.
The main link in national finance is the state budget. With its help, the government of the republic concentrates a significant part of the country's financial resources in its hands. With the introduction of a new tax system in 1992, the main source of budget revenues are taxes from enterprises, institutions and organizations, as well as from citizens. The expenditure side of the state budget is dominated primarily by the costs of financing the national economy and social and cultural events. A relatively small share is occupied by the costs of maintaining the administrative apparatus and the country's defense.
The state budget of the Republic of Belarus is one of the main instruments for implementing the financial policy of the state. In recent years, the state budget has been increasingly used to overcome crisis phenomena in the economy, reduce inflation, social support for certain segments of the population, to develop market relations, and in particular for the development and strengthening of business structures, for the privatization of state property, and for the development of foreign economic activity of enterprises.
A major link in the financial system are extra-budgetary funds, the number of which has increased significantly in recent years. The main off-budget funds include: the social protection fund; Employment Promotion Fund; centralized innovation fund; fund for supporting agricultural producers, nature conservation fund, road fund, etc.
The widespread use of extra-budgetary funds along with the state budget is caused by a number of reasons, and primarily by the limited budgetary resources. The formation of extra-budgetary funds makes it possible to attract additional financial resources, which are then used for individual events. In terms of their economic content, off-budget funds represent a form of redistribution and use of financial resources. The procedure for their formation and use is regulated by relevant legislation. One of the links in the financial system is state property, personal and other types of insurance, which is one of the methods of creating reserve funds to protect the property of enterprises, organizations, institutions, as well as personal property of citizens from losses during natural disasters and other adverse events, for additional material support for citizens during various events in their lives.
In terms of their content, insurance relations have a number of specific features. Unlike finance, which is associated with the distribution and redistribution of financial resources, insurance covers only the sphere of redistribution relations. These relationships are determined by the possibility of unforeseen events, i.e., insured events that entail the possibility of causing material or other damage to the national economy and population.
Since 1992, along with state insurance, non-state insurance provided by joint-stock insurance companies has gained widespread development.
In recent years, both state and non-state insurance organizations have been introducing new forms of insurance into practice - liability insurance, insurance for the risk of loan default, etc.
An important link in national finance is the state loan, through which additional financial resources of the state are formed through the mobilization of temporarily available funds of the population, enterprises, organizations and institutions. State credit is a set of monetary relations that arise between the state as a borrower (or lender) of funds and individuals (legal entities) and foreign governments in the process of forming and using a nationwide fund of funds. The objective need for the existence of state credit lies in the constant lack of funds from the state budget to meet the needs of society, in the presence of a budget deficit.
State credit can be internal and external. In the Republic of Belarus, internal state credit receives priority development. However, in recent years, due to the constant lack of internal financial resources, the government of the republic is increasingly attracting external, i.e. international, government credit.
In other CIS countries, the composition of the financial system and their functions are basically the same as in the Republic of Belarus. At the same time, in individual CIS countries there are some differences in the forms and methods of organizing financial relations. For example, in the Russian Federation, compared to the Republic of Belarus, the proportion of enterprises (about 85%) in which financial relations are based on a collective (joint stock, private) form of ownership is much higher. There are some differences in the Republic of Belarus compared to Russia and other CIS countries in the organization of tax relations between enterprises and the state budget, in the formation and use of extra-budgetary funds, etc. However, due to the emerging trend of increasing economic integration between individual republics, the above differences in the future they will be leveled out to a certain extent.
6. Characteristics of the main elements of the financial system of the Russian Federation
Public finance consists of two main elements: the state budget and extra-budgetary funds
The state budget is the annual plan for the state's income and expenditures; it is the money that allows the state to perform economic and social functions (and more recently, political ones). The state budget consists of the government budget and local budgets (region, city, district, village council). Therefore, the approval of state budgets for the next year is always stormy. Governments are trying to infringe on the rights of regions, and the latter are trying to keep more funds at their disposal. Extra-budgetary funds are those funds that are accumulated outside the state budget system and have a strictly designated purpose: pension fund, social insurance fund, etc.
7. International financial system. Features of the functioning of financial systems in economically developed countries
The financial systems of developed countries represent in the economy of each state the sphere of accumulation - the accumulation of funds in centralized and decentralized funds of funds. General structure of financial systems of foreign countries:
public finance;
corporate finance;
household finances that form and use financial resources of centralized and decentralized funds.
National the features of the systems are determined by the unique organization of financial flows, determined by the specifics of the state, political and economic system, historical, geographical and other factors.
The financial systems of economically developed countries consist of the following subsystems:
1. Centralized finance. The leading link is the state budget. Over the 200 years of its existence, the share of funds redistributed through the budget has increased 2–3 times; more than 40% of national income passes through it.
The budget system is a set of elements of the internal structure of the state budget.
The state may have:
two-tier budget system, characteristic of unitary states (Great Britain, Italy, France, Japan). There are central and municipal budgets;
three-tier budget system existing in federal states (Canada, USA, Germany). Includes the federal budget, regional budgets of federal units (state, province, land) and local budgets.
Basic principles of building a budget system:
independence of territorial budgets;
equality of territorial budgets in relations with higher budgets;
differentiation of income and expenses between levels of the budget system.
This method of construction is typical, which ensures a high level of independence of local budgets. The degree of autonomy is determined by the type of budget system:
American type - almost complete independence of all links;
Western European type – relative independence, in which there is interbudgetary redistribution of financial resources.
In federations, a symmetrical model is used, when the rights of all subjects are equal, but individual regions, due to their importance, can be assigned a separate status.
The term “financial system” is currently one of the most widespread and often used in regulations, court decisions, the media, and in speeches by the head of state and the chairman of the Government of the Russian Federation. However, it does not have a legislative definition, and there is no unified conceptual approach of scientists to the development of the definition in question. It should also be noted that it is complex, since the following aspects can be distinguished: historical, political, economic and legal. The complex nature of the term “financial system” is also determined by the fact that this concept is the object of scientific research by economists, financiers, and administrators. That is, the term “financial system” is a complex intersectoral category.
Basically, scientists consider the financial system as a set of links (elements, parts, i.e. its components) or as a set of specific bodies. Thus, defining the financial system in the economic aspect as “the internal structure of finance, the set of interconnected links (institutions) included in them, each of which represents a specific group of financial relations,” N.I. Khimicheva notes that considering this term as a system of financial authorities “leads to a blurring of the subject of study, its ambiguity.”
S.V. Miroshnik defines the financial system as a consequence of developed and officially approved conceptual ideas regarding the mechanism of financial and legal regulation, as a result of the targeted impact of financial and economic instruments on relevant social relations; it is a set of generated financial resources that differ in their legal regimes.
There are 3 components in finance:
- 1. Public finances. Recently, academic economists have been paying more and more attention to this important component of the modern financial system of the state. This is due to the fact that for a long time in the economic science of our country, finance and credit were considered only from the aspect of the state. Currently, some scientists admit the existence of personal finance in the financial system of the state, while others believe that such a category does not exist. The latter opinion should be considered incorrect. Currently, public (centralized) finance does not play such a dominant role in the financial system of the state as it did several decades ago. Now private, decentralized finance is coming to the fore - the finances of the population, and often the personal finances of certain individuals.
- 2. Finance of associations, firms and inter-industry complexes, i.e. decentralized finance.
- 3. National, i.e. centralized finance.
The totality of the links (institutions) included in finance, in their interconnection, forms the country’s financial system.
The state of the financial system is an important indicator of the state of the entire country's economy. In this regard, special attention must be paid to the principles of constructing the financial system. N.I. Khimicheva notes that the functioning of the financial system as a whole is characterized by certain principles that are enshrined in legislation. At the same time, the famous scientist emphasizes that their identification and “clear formation in the rules of law, primarily in the general part of financial principles as its principles, would be essential for determining the financial activities of the state in accordance with the constitutional foundations.”
System requirements, principles of building a financial system: legality, transparency, strict financial reporting, fulfillment of financial obligations, execution of financial discipline, economic efficiency and validity of decision-making, based on general analysis and specific calculations, ensuring the social orientation of financial and legal regulation. The creation of an effectively functioning financial system presupposes “constant and painstaking work of the state both in the areas of law, including administrative enforcement of the law, and in the areas of forming the institutional foundations of financial relations.”
The financial system must comply with the principles: sustainability, stability of the financial system, the principle of interaction and consistency of financial control and public administration with government and financial authorities, the principle of federalism.
Currently, the financial system of the Russian Federation includes (Table 1):
budget system, consisting of state (federal budget and budgets of constituent entities of the Russian Federation) and local budgets of municipalities.
Table 1. Composition of the financial system of the Russian Federation
The central place in the financial system of the Russian Federation is occupied by the budget system. Budget? This is an estimate (balance) of income and expenses. In the Budget Code of the Russian Federation, the budget is defined as a form of formation and expenditure of a fund of funds intended for financial support of the tasks and functions of the state and local government (clause 1 of Article 6 of the Budget Code of the Russian Federation). By using the budget system, monetary funds are formed in the form of the federal budget, budgets of the constituent entities of the Russian Federation and municipalities. Such monetary funds are necessary for the implementation of national or territorial socio-economic plans and programs, ensuring the defense and security of the country. At the same time, they serve as the financial basis for the independence of the constituent entities of the Russian Federation and the development of local self-government. Budget system funds are generated mainly from taxes and other obligatory payments of legal entities and individuals. Revenue items of the budget: corporate income tax, sales tax, local taxes, income from foreign economic activity, rental payments, non-tax income, income tax, loan fund funds and more. But funds are also raised on a repayable basis through internal and external loans.
Due to the insufficiency of funds in the budget system (budget deficit), the dispersion of state financial resources across numerous funds, and the facts of their ineffective use within the funds, a part of extra-budgetary funds was included (consolidated) in the budget system.
The state budget is the leading link in public finances. With its help, the distribution and redistribution of GNP between territories and industries is carried out.
The Russian budget system currently includes three parts:
federal budget of the Russian Federation, budgets of state extra-budgetary funds;
budgets of constituent entities of the Russian Federation and budgets of territorial state extra-budgetary funds; local budgets (Article 10 of the Budget Code of the Russian Federation);
extra-budgetary target state and municipal (local) funds.
Target monetary funds, in contrast to the budget, are extra-budgetary funds (Pension Fund, Employment Fund, etc.). In comparison, the state or local budget is a general-purpose monetary fund;
finance of enterprises, organizations, institutions, economic sectors.
The role of enterprise finance in the life of any state is very great. They provide not only material production and the social sphere of the enterprise itself, but are also used to form funds in other areas: pensions, social and medical insurance, serve as a source of budget, etc. In this regard, enterprise finance is the initial basis for the entire financial system of the country. Enterprise finance refers to decentralized financial resources, i.e. those that are formed at specific enterprises and are used for the production and social purposes of these enterprises;
insurance. Insurance is an economic mechanism based on the principle of distributing a loss incurred in one case among a number of others that are subject to a similar (homogeneous) danger. By virtue of an insurance obligation, one person - the insurer - is obliged, upon the occurrence of specified circumstances (an insured event) within a certain period (or without specifying a period), to make a stipulated insurance payment to another person - the policyholder or another person (beneficiary, insured person) and has the right to demand payment of insurance premiums, and the policyholder is obliged to pay insurance premiums and has the right to demand the provision of appropriate insurance payments. Insurance obligations that have their source in traditional property or personal insurance contracts are regulated mainly by the norms of Chapter 48 of the Civil Code of the Russian Federation as actual (“pure”) contractual insurance legal relations; in cases where such contracts include conditions related to certain special types of insurance (marine, medical, etc.), they become mixed civil contracts (clause 3 of Article 421 of the Civil Code of the Russian Federation). Property and personal insurance are based on a universal security essence (function). In one case, it manifests itself in compensation for losses incurred, in the other - in the payment of a certain amount of money, regardless of the presence or absence of losses. Hence, in the doctrine of insurance law, the name historically developed for property insurance as insurance of losses, and for personal insurance as insurance of amounts;
credit (state, municipal and bank). A loan (in the narrow sense) is, on the one hand, funds that the bank undertakes to provide or has provided to the borrower in the amount and on the terms provided for in the loan agreement. On the other hand, a loan is a sum of money received by a borrower from a bank on the basis of a loan agreement and subject to repayment along with interest on it. Credit (in a broad sense) is the legal relationship between the lender (bank or other credit organization) and the borrower in connection with the emergence, execution, enforcement and termination of obligations under a loan agreement.
A bank loan is issued for a certain period at a certain interest rate. A loan can be issued against a promissory note called a promissory note. One form of bank credit is where the bank allows a firm to spend money beyond the amount in its checking account.
It should be noted that in the economic and financial literature a judgment has been made about a narrower composition of the financial system, excluding credit from it due to its inherent characteristics. Some representatives of economic science, while not classifying the institution of bank credit as an institution (link) of the financial system, still include state credit in the financial system. However, I believe that the position expressed in the literature on the advisability of a broad interpretation of finance, including the inclusion of bank credit, is more reasoned and logical.
It should be noted that recent events in the financial market allow us to speak about the isolation in the structure of the financial system of the Russian Federation of a special type of credit institutions - systemically important banks. The peculiarity of their position is the powers delegated by the state to redistribute budget funds in order to effectively control the targeted nature of their use. These may include Vnesheconombank, Sberbank of Russia, VTB, Gazprombank and Rosselkhozbank.
Another link in the financial system has become organizations - agents of the Government of the Russian Federation to perform special tasks in certain segments of the financial market, for example: OJSC Agency for Housing Mortgage Lending, OJSC Agency for Restructuring of Housing Mortgage Loans, OJSC Russian Venture Company. This category of entities can also include non-state pension funds, specialized depositories, mortgage agents and other organizations participating in the system of public funds.
Each of the links in the financial system has its own specifics, while simultaneously interacting with each other as an integral part of a single category.
Decentralized finance (finance of business entities) is at the disposal of firms, associations and organizations. Centralized (state) finances? it is the main part of the entire financial system. They include state social insurance, state property and personal insurance, state credit, and state budget.
So, in modern science, until now, there has not been a single understanding of the concept of “financial system”. But, to summarize the above, the financial system can be defined as a historically formed and enshrined in current financial legislation set of spheres of financial relations, financial institutions and financial funds, through which the mobilization and subsequent use of financial resources is ensured to meet the relevant needs of society as a whole. The division of the financial system into certain links is due to differences in the tasks of each link, as well as in the methods of formation and use of centralized and decentralized funds of funds. Through the financial system, the state influences the formation of centralized and decentralized monetary funds, the accumulation and consumption fund, using taxes, state budget expenditures, and state credit for this purpose.