Or securities and payment and settlement documents (bank cards, check books). The issue of money in the country is most often carried out by central banks, and the issuance of securities by commercial banks. Bank cards issued by the bank remain the property of the issuing bank throughout their entire validity period, and the card holder receives it only for use.

Also, the issuing bank is a bank that acts on behalf of the payer to open a letter of credit and, in accordance with its instructions, undertakes to make payments to the recipient of funds or pay, accept or honor a bill of exchange, or authorize another bank (executing bank) to make payments to the recipient of funds or pay, accept or honor a bill of exchange. The rules on the nominated bank apply to the issuing bank.

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Notes

An excerpt characterizing the Bank of Issue

Stopping opposite the Pavlograd regiment, the sovereign said something in French to the Austrian emperor and smiled.
Seeing this smile, Rostov himself involuntarily began to smile and felt an even stronger surge of love for his sovereign. He wanted to show his love for the sovereign in some way. He knew it was impossible, and he wanted to cry.
The Emperor called the regimental commander and said a few words to him.
"My God! what would happen to me if the sovereign addressed me! - Rostov thought: “I would die of happiness.”
The Emperor also addressed the officers:
“Everyone, gentlemen,” (every word was heard by Rostov like a sound from heaven), I thank you with all my heart.
How happy Rostov would be if he could now die for his Tsar!
– You have earned the banners of St. George and you will deserve them.
“Just die, die for him!” thought Rostov.
The Emperor also said something that Rostov did not hear, and the soldiers, pushing their breasts, shouted: Hurra! Rostov also screamed, bending down to the saddle as much as he could, wanting to hurt himself with this cry, only to fully express his admiration for the sovereign.
The Emperor stood for several seconds against the hussars, as if he was undecided.
“How could the sovereign be indecisive?” thought Rostov, and then even this indecision seemed to Rostov majestic and charming, like everything that the sovereign did.
The sovereign's indecisiveness lasted for an instant. The sovereign's foot, with a narrow, sharp toe of a boot, as was worn at that time, touched the groin of the anglicized bay mare on which he was riding; the sovereign's hand in a white glove picked up the reins, he set off, accompanied by a randomly swaying sea of ​​adjutants. He rode further and further, stopping at other regiments, and, finally, only his white plume was visible to Rostov from behind the retinue surrounding the emperors.

The financial system of any country includes a monetary system, the main element of which is the issue of money. Without this element, the existence of the state’s economy, as well as the implementation of its internal and external payment transactions, is impossible, because money is the main and universal means of payment.

Depending on the type of money issued, the issuer, as well as some other characteristics, the issue can be divided into various types. Next we will consider in detail how this process occurs and what it leads to.

Issue of money and its types

The totality of all funds in circulation in a country is called the money supply. This value is not constant and can change under the influence of many factors, both up and down. Emission—the release of additional money into circulation—leads to an increase in the money supply.

Depending on the type of money issued, the issue is:

1. Cash- release of additional paper money and coins into circulation. due to which there is an increase in the total money supply. Incoming money is either minted (if it is in coin form) or printed (if it is in paper form).
2. Cashless- a priority type of issue, which on average accounts for about 80% of the total issue of money. This is due to the fact that in most developed countries non-cash money is the predominant means of payment. Non-cash money is issued by issuing loans or by displaying money in bank accounts.

Another classification divides emissions into two types:

1. Primary— funds are released into circulation by the Central Bank of the state. In this case, the form of money can be either cash or non-cash. The primary issue includes such operations of the Central Bank as:

• printing banknotes (minting coins);
• issuing loans to commercial banks;
• purchase of foreign currency;
• state lending.

2. Secondary— the issue is carried out by commercial banks, which lend to all other market participants. Within the limits of the funds available to the bank, it can issue loans to other entities, using funds received, for example, from the Central Bank.

Depending on the issuer (that is, the entity that issues money), the issue is divided into two types:

1. Budget money issue- carried out by the state, which most often has a monopoly right to issue cash.
2. Credit emission of money- carried out by banks and consists only of non-cash or secondary issues.

The main factor that determines the need to issue funds (both in cash and non-cash form), and also affects its size, is the need for working capital among organizations and enterprises. The purpose of the issue is to satisfy precisely this need and timely provide economic entities with the necessary funds. Other emission factors include:

• growth of production, increase in commodity mass and subjects of the market sphere;
• decrease in the velocity of money circulation;
• price increases that do not depend on the quality of the product (goods or services) being sold.

The exact procedure for releasing funds into circulation depends on the specific country and may differ markedly in different countries. The systems of the most developed countries with market economies: the USA, EU countries, Japan, etc. can be considered a model.

In addition to the issue of money, there is also money, which we talked about in the previous article.

Who issues money in the Russian Federation

The main document of the state - the Constitution of the Russian Federation - contains several provisions regarding emissions in the country:

• the monopoly right to issue money belongs to the Central Bank of the Russian Federation;
• the main and only acceptable means of payment on the territory of the state is the Russian ruble;
• the issuance of money into circulation in another currency or by another issuer is prohibited;
• the Central Bank of the Russian Federation is entrusted with responsibilities not only for issuing banknotes, but also for their withdrawal;
• The Central Bank is not limited in the form of emission - it can be either cash or non-cash money.

In accordance with the law, the decision on the release of money into circulation, as well as on its withdrawal, is made by the Board of Directors of the Central Bank. When issuing the ruble (the only legal tender), its relationship with gold or any other precious metals is not established.

To produce your own cash (in the form of minting coins) There are special mints in Russia:

1. Moscow Mint.
2. St. Petersburg Mint.

In addition to minting state coins, they are engaged in the manufacture of orders, medals and other items made of precious metals. Coins for foreign countries are also minted in small quantities at these yards.

Printing of money (paper) in Russia takes place in special printing houses that can provide an increased level of protection. The process of making money (both printing banknotes and minting coins) is strictly regulated and is under the control of the Central Bank.

As for non-cash money, they are issued in the form of loans provided by the Central Bank of the Russian Federation to many commercial banks. In the form of a secondary issue, these banks can also provide loans to other economic entities, thereby increasing the size of the country's non-cash turnover.

The emission system of Ukraine is in many ways similar to the Russian one. The primary issuer of funds is the National Bank of Ukraine, which has monopoly rights to issue the state currency - the hryvnia. In addition, the NBU also has the exclusive right to withdraw money from circulation.

The primary issue of funds is carried out by the National Bank in non-cash form - money is printed only to cover these previously issued non-cash funds. The Banknote and Mint of the NBU is used to print banknotes. Non-cash issue can also be carried out by commercial banks (in the form of lending to other entities).

Several factors can be identified that, at this stage of development of the Ukrainian economy, negatively affect its emission system:

All these factors lead to the need to carry out additional emission of funds, thus increasing the total money supply of the country. This leads to the depreciation of the national currency and the emergence of negative trends in the development of the Ukrainian economy.

As a result, it can be noted that:

1. The main way to increase the money supply in the state's circulation is the issue of funds.
2. Money in circulation can be issued both in cash and in non-cash form.
3. The priority form of monetary payments in all developed countries is non-cash.
4. The monopoly right to issue cash in Russia (banknotes, coins) belongs to the Central Bank.
5. The issue of money in Ukraine does not have significant differences with a similar process in Russia - the difference is only in the legal monetary unit established by the state.

The Central Bank of Russia as the country's only issuing bank

Note 1

The Constitution of the Russian Federation defines the special status of the Bank of Russia, giving it exclusive rights to issue money, protect and ensure the stability of the national currency.

The legal basis for the activities of the Bank of Russia is also determined by the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)” and other regulations.

The goals of the Central Bank of Russia include:

• firstly, protecting and ensuring the stability of the national currency;
• secondly, ensuring the development and strengthening of the Russian banking system;
• thirdly, stabilization and ensuring the development of the national payment system;
• fourthly, stabilization and ensuring the development of the Russian financial market.

The main principle of the activities of the Central Bank of Russia is the principle of independence, the manifestation of which is that the specified bank is a special public legal institution that has the exclusive right to issue funds and acts as the organizer of money circulation.

The Bank of Russia is not a government body, but the content of its functions allows us to determine the nature of its activities as one of the forms of government power, which provides for the use of state coercive measures.

At the same time, the Bank of Russia exercises its functions and powers regardless of government authorities at any level (federal, regional, local).

The principle of independence of the Central Bank is enshrined in the Constitution of Russia.

Among other things, the Central Bank is vested with the exclusive right of rule-making activities within the framework of issues within its jurisdiction. The Central Bank is not vested with the right of legislative initiative, but its rule-making activity is manifested:

• firstly, in issuing its own regulations;
• secondly, in drawing up opinions on regulatory legal acts relating to the performance of its functions.

The Central Bank of Russia has the status of a legal entity. Its capital and property are federally owned, although the Bank retains financial and property independence.

The Central Bank independently exercises powers regarding the ownership, use and disposal of bank property. To seize or encumber his property, the consent of the Central Bank of Russia is required.

A manifestation of the financial independence of the Central Bank of Russia is that it provides its expenses with its own income. The Central Bank of Russia has the right to protect its interests in court, including in foreign and international courts.

The Central Bank of Russia is not responsible for the obligations of the Russian Federation, just as the Russian Federation is not responsible for the obligations of the bank, unless this is expressly declared in legislation.

Also, the Central Bank of Russia is not responsible for the obligations of credit and non-credit organizations, except in cases where the bank, on its own initiative, assumes such responsibility. The opposite statement is also true.

The Central Bank of Russia is responsible to the State Duma of Russia for the results of its activities:

• appointing and dismissing its Chairman and members of the Board of Directors,
• sending and recalling its own representatives to the national financial council within the quota,
• considering the directions of state monetary policy and evaluating the bank’s annual reports.

Note 2

The State Duma has the right to decide on an audit of the Central Bank by the Accounts Chamber.

Issuing activities of the Central Bank of Russia

The basis for issuing cash is the principle of decentralization, which is due to the permanent change in the need for cash, making it irrational and impractical to deliver money from the center to various parts of the country.

In practice, the issue of funds is carried out by the Central Bank of Russia itself and its cash settlement centers opened in different constituent entities of the federation to provide settlement and cash services to commercial banks located in these constituent entities.

Cash issuance is carried out through the opening of reserve funds and working cash registers in cash settlement centers. Reserve funds keep a certain supply of banknotes, the purpose of which is to meet the need of the region's monetary system for cash as it increases. The funds forming reserve funds are not cash in circulation.

The cash desks of the cash settlement center are designed to receive funds from commercial banks, as well as to issue them. This part of funds is included in the monetary circulation, since it is in constant movement. If the volume of funds received into the working cash register exceeds the amounts issued, the excess cash is withdrawn from circulation and transferred to the reserve fund of the cash settlement center.

Note 3

The right to dispose of the reserve funds of cash settlement centers is vested in the republican, regional and city departments of the Bank of Russia.

Cash settlement centers are responsible for issuing cash to commercial banks within the limits of their free reserves. Thus, with an increase in the need of commercial banks for cash, which is not supported by an increase in the receipt of funds in operating cash desks, the cash settlement center will have to increase the release of cash into circulation by transferring it from the reserve fund to the working cash desk based on the permission of the Central Bank.

The issue of funds by one cash settlement center may be accompanied by the simultaneous withdrawal of funds from circulation by another cash settlement center. As a result, there may be no change in the money supply, and information about the issue is available only to the Bank of Russia.

Bank of issue(issuing house) –

1. in a broad sense, a bank that issues into circulation in non-cash or cash (banknotes) forms, as well as other means of payment (transferable or). In modern banking systems, almost all banks that provide lending to legal entities and individuals are emission banks, since they increase;
2. in a narrow sense, a bank to which the state has granted the right to issue cash and withdraw it from circulation. In modern banking systems around the world, the monopoly right to issue cash into circulation is secured (in the USA -). They are also responsible for maintaining the stability of the national currency by implementing monetary regulation. Typically, these banks are entrusted with the management of the country's credit system, they conduct financial transactions of the government, store temporarily available funds and credit institutions, are for them. The issuing bank carries out issuing operations (see), using its reserve funds of bank notes and metal coins and working cash registers. When money is released into circulation, cash is transferred from the reserve fund to the working cash register, and when money is withdrawn, from the working cash register to the reserve fund.

An issuing bank is an issuing institution endowed with a monopoly right, as a rule, the central (national) bank of the country. The functions of the bank of issue include the storage of official documents. In Ukraine, the only bank of issue is.

In the vast majority of states there is only one bank of issue. Of the largest states, only in the USA there are 12 issuing banks that are part of the Federal Reserve System and, in relation to the issuing operation, are actually a single issuing bank.

Initially, issuing banks were banks that mobilized funds for active operations by issuing (bank notes), exchangeable at the first request of any bearer for a full-fledged coin in circulation (gold, silver). Currently, issuing banks are central banks of states that have a monopoly right to issue banknotes as substitutes for banknotes ().

As a rule, these are central banks vested with the right to issue (issue banknotes in all forms). The state usually grants the issuing right to only one bank, since granting the right to issue money to all banks would upset the country's monetary circulation. EB has such large funds that none of the other banks can have, because its liabilities are budget funds and cash in circulation. This circumstance gives him the opportunity to provide support to all other banks and manage their activities. The EB becomes the center for organizing banking in the country, around which all other banks and other credit institutions are grouped.

Characteristic phenomena for the Central Bank:

Issue and control of currency

Settlement and reserve center of banks

Public debt management and state budget execution

Acting as a “lender of last resort”, “bank of banks”

Establishment of economically justified limits and standards for the activities of banks, including the official Central Bank rate on loans

Determination of priority goals of monetary and monetary policy and their implementation

Conducting scientific research

Determination of the legal basis and principles of corporatization of credit and financial institutions, markets for short- and long-term credit transactions, as well as types of payment elements circulating in the country

Formation of an effective mechanism for monetary regulation of the economy

3. Other operations of commercial banks

Leasing

Long-term rental of machinery, equipment and other movable and immovable property for industrial purposes. But this is not an ordinary lease, but a specific one, bringing leasing closer to a loan. Unlike leasing, as a rule, it involves not 2, but 2 or more entities (but there may also be intermediaries, guarantors, etc.):

1) The user (leasing recipient, lessee) finds a company that produces the equipment he needs, discusses the technical side of the matter with him and enters into a preliminary supply agreement

2) The lessee (sometimes together with the manufacturer) approaches the leasing company with a request to buy this equipment for him from the supplier, and then provide him with temporary possession

3) The leasing company, having purchased this equipment and becoming its owner, transfers it for temporary use to the lessee for a fee

If the potential lessee does not have complete information about the producers of goods, it is simply more profitable for the lessee to contact the leasing company with a request to determine the supplier of the equipment he needs than to search for a supplier himself

Þ leasing includes purchase and sale relations and rental relations. But the key point of the relationship here is credit operation, and the key figure is the leasing company, which provides the tenant with a service. The lessor buys property in ownership at full cost, but not for himself, but for the user, who receives and uses this property, periodically paying the appropriate fees; leasing can be considered as a transfer of property for temporary use on the terms repayment, urgency, payment, those. qualify as fixed capital loanÞ from an economic point of view, leasing is a specific loan provided by the lessor to the lessee in the form of property transferred for use

Factoring and forfaiting

Special forms of lending, in which, like leasing, credit relations are only one of the components of a more complex set of relations

Factoring.

Purchase by a bank or a specialized factoring company of the supplier’s claims to the buyer and their collection for a remuneration

The essence is that a factoring company (factor firm) buys from its clients their payment requirements for buyers on the terms of immediate payment of 80-90% of the cost of invoiced supplies and payment of the remainder, minus commissions and interest for the loan, within strictly defined periods, regardless of receipt of revenue from buyers. Of course, the subsequent payment from the buyer is credited to the account of the factor company

In accordance with the Convention on M/A Factoring, an operation is considered factoring if it satisfies at least two of the following requirements:

Availability of lending in the form of prepayment of debt claims

Maintaining supplier accounting, primarily sales accounting

Collection of his debt

Supplier credit risk insurance

The client is obliged to pay the bank a fee in the form of commission payments for managing the client's accounts, including credit risk and factoring fees. The amount of the commission fee (usually 0.5-3% of the total amount of invoices purchased) depends on the client's trading turnover, the degree of risk (depending on the solvency of the client's debtors) and the amount of clerical work required (depending on the number of invoices)

In addition, the client pays the bank a loan interest on the daily balance of the advance payment on accounts

Types of factoring operations:

1. Open or closed

Criterion - notification of the debtor about the participation of a factoring company in the transaction

2. With or without right of recourse

(Regression- return request to the supplier to return the amount paid)

3. With the condition of crediting the supplier in the form of advance payment or payment of claims by a certain date

By concluding a factoring agreement, the factor firm takes on the possible risk of non-payment by the buyer. Therefore, before concluding such an agreement, it must carry out preliminary work to study the solvency of the clients of the supplier it serves. To do this, the supplier informs the factor company (the factoring department of the bank) a list of its customers and the expected volume of supplies of goods. The factor firm checks the solvency of each buyer and informs the supplier of possible credit limits for each buyer. Within these credit limits, the supplier can ship products without any risk

In addition to credit and accounting and control operations, factor companies provide legal, i-, consulting and other services

Forfaiting

Forfaiting- lending to the exporter by purchasing bills of exchange or other debt claims. This is a form of transformation of a commercial loan into a bank loan

The seller in forfeiting is usually the exporter who has fulfilled his obligations under the contract and seeks to collect the importer's payment documents in order to receive cash. The buyer (forfeiter) is usually a bank or special company. The buyer (bank) assumes commercial risks associated with the insolvency of importers without the right of recourse (turnover) of these documents to the exporter

The forfeiter acquires debt claims minus interest for the entire period for which they are issued. Thus, the export transaction turns into cash

The forfeiter can store purchased documents at his place. In this case, the funds spent by him are considered as capital investments. But he can sell them to another forfaiting company also on a non-negotiable basis. When the payment is due, the final holder of the documents presents them to the bank for payment.

Forfaiting appeared under the influence of the rapid growth in the export of expensive equipment with a long production period, increased competition in world markets and the increasing role of credit in the development of world trade. It was also used by Vneshtorgbank of the USSR, and is gradually being developed in modern Russian credit policy.

Trust

Many commercial banks assume the role of a fiduciary and, in this role, perform a variety of operations for their individual and corporate clients. Main categories of trust services for f/l:

1 Disposition of property after the death of the owner

A detailed inventory of property must be drawn up, debts must be paid, and the remaining amount must be distributed among the heirs according to the law.

2 Property management on a trust basis and trusteeship

Property management in the form of a trust can have a different legal basis: a will, a special agreement, a court order. The types of trusts managed by banks are very diverse:

Life: established by a person in agreement with the bank. For example, a client transfers money to a bank in trust, instructing it to pay income during his life, and after death to transfer the capital to his heirs

Insurance: arises when a client appoints a bank as trustee of an insurance policy and instructs it to pay the proceeds to his wife upon his death and to pass on the policy amount to his children upon the death of his wife

Corporate: established in the form of property pledged to the bank to secure the issue of company bonds

Trust for the benefit of employees

a) In the form of a pension fund

The entrepreneur contributes money according to an approved scheme to a fund managed by the bank for payments to employees upon reaching retirement age. If employees contribute money to the fund, then it is called a pension trust with participation; if not, it is called without participation.

b) In terms of profit sharing

The entrepreneur transfers part of the profit to a trust fund opened in the bank for the subsequent distribution of contributions and subsequent income from the fund in favor of the company's employees upon reaching retirement age or at another date

3 Agent functions

They differ from a trust in that in the case of a trust, the trustee receives the legal right to dispose of the property, while in an agency relationship, the right remains with the owner. Are as follows:

Storing valuables in a safe

Storage of property with active functions: the bank buys and sells valuables, receives income from them, acting in accordance with the instructions of the principal

Control: the bank performs all the functions of a property custodian and actively manages the property, for example, analyzes the state of the securities portfolio, makes recommendations and suggests ways to invest capital, etc. If the bank is in charge of real property, the bank can rent it out , operate in accordance with the instructions of the principal

Banks also perform agency functions for companies:

Transfer agent: the bank performs operations for the corporation to transfer ownership of shares and registered bonds from one owner to another

Share Registrar: the bank keeps records of issued securities to prevent their excessive issue, which is punishable by law

The bank plays a role depository of valuables during f-reorganizations

The bank takes over details of the dividend payment agent on shares and interest (as well as repayment of principal) on the company's bonds

The bank's trust department provides numerous services and consultations to individual managers, guardians and administrators managing other people's property on a trust basis

Transactions with securities

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

There are two types of bank investment policies:

Passive: characterized by an even distribution of investments between issues of different maturities to ensure good profitability and liquidity

Aggressive: This strategy is followed by large banks that have a large portfolio of investment securities and strive to receive maximum income from this portfolio.