Monetary Credit System

In modern models of a developed market economy, the monetary system takes an important position in the work of the economic mechanism. It is practically a system of economic circulation, which regulates the money supply, controls financial flows, accumulates and redistributes cash flows, conducts mutual settlements between economic entities, lends to the population and individual sectors of the economy.

There are two concepts of the monetary system: the first means a set of credit relations, methods and forms of financing (functional form); The second is the aggregate of financial and credit institutions, which tend to accumulate cash temporarily free funds, and then provide loans (institutional form).

In the first case we are talking about such relations as banking, commercial, state, consumer, international credit.

The second case is reduced to the following parameters. The modern monetary credit system is a complex mechanism, having several levels, which accumulates and redistributes financial assets. The main links of the system are: the Central Bank, the system of state and semi-state banks; The banking sector, which includes commercial banks, savings banks, specialized commercial banks; Mortgage loans, investment, specialized credit and financial non-banking institutions: pension funds, insurance and investment companies, financial companies, various loan and savings associations, charitable foundations.

This three-tier scheme is typical for most developed countries (USA, Japan, countries of Western Europe). Individual countries differ in the degree of development of individual links in this system. The most developed monetary system in the United States, in connection with which it is the developed countries that are guided by it when forming their own credit systems.

The state regulates the monetary system in two main ways: through direct administrative intervention (by setting rigid prices, rationing goods, etc.) and indirect administrative interference (monetary policy).

So it becomes obvious that the state's monetary system is designed to meet the needs of the economy in the distribution of free cash and its overflow into the most developed and promising sectors. Some economic entities periodically have temporarily free funds (surpluses of money), while others have needs for additional funds. This contradiction is successfully solved by the monetary system of the country.

The monetary system of the Russian Federation is represented by three tiers: the Central Bank; The banking system ( commercial banks ); Specialized financial institutions. Such a structure reflects well the needs of the national economy, it approaches the model of credit systems of developed countries and begins to adapt to new processes of economic realities.

Such a credit system still has certain shortcomings in almost all areas (a growing number of small banks, insurance companies, investment funds, and commercial banks continue to specialize in short-term credit operations, which leads to insufficient redirection of funds to the development of industrial and other sectors of the economy. Therefore, today still quite a lot of aspects of the RF credit system require further improvement. Rational functioning of the monetary system System is designed to ensure a stable state of the national economy.

The banking system of Russia has two levels, it is represented by the Central Bank of Russia (Bank of Russia) and commercial banks.