The role of the financial market in accumulation. Functions of financial markets in the economy

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on the topic: "Accumulation of monetary capital"

Performed:

1st year student (college)

correspondence department

Faculty of Law

Savenkova O.G.

Introduction

The accumulation of monetary capital plays an important role in a market economy. The process of accumulation of monetary capital itself is immediately preceded by the stage of its production. After money capital has been created or produced, it must be divided into the part that is again sent to production, and the part that is temporarily released. The latter, as a rule, represents the consolidated funds of enterprises and corporations, accumulated in the loan capital market by financial institutions and the securities market.

The emergence and circulation of capital represented in securities is closely related to the functioning of the market for real assets, i.e. the market in which the purchase and sale of material resources takes place. With the advent of securities (stock assets), a kind of bifurcation of capital occurs. On the one hand, there is real capital, represented by production assets, on the other hand, it is reflected in securities.

The emergence of this type of capital is associated with the development of the need to attract increasing amounts of credit resources due to the complication and expansion of commercial and industrial activities. Thus, the stock market historically begins to develop on the basis of loan capital, because the purchase of securities means nothing more than the transfer of part of the monetary capital for a loan.

The key task that the securities market must perform is, first of all, to provide conditions for attracting investment to enterprises, access of these enterprises to capital that is cheaper than bank loans

The securities market (stock market) is part of the financial market (along with the loan capital market, the foreign exchange market and the gold market). Specific financial instruments are traded on the stock market: securities.

Securities are documents of the established form and details that certify property rights, the exercise or transfer of which is possible only upon presentation. These property rights in securities are conditioned by the provision of money on loan and for the creation of various enterprises, purchase and sale, pledge of property, etc. In this regard, securities give their owners the right to receive a specified amount. Capital invested in securities is called stock (fictitious). Securities are a special product that circulates on the market and reflects property relations. Securities can be bought, sold, assigned, pledged, stored, inherited, donated, exchanged. They can perform individual functions money (means of payment, settlement). But even unlike money, they cannot act as a universal equivalent.

1. Concept, goals, objectives and functions of the securities market

The purpose of the securities market is to accumulate financial resources and ensure the possibility of their redistribution by performing various transactions with securities by various market participants, i.e. mediate in the movement of temporarily free people Money from investors to issuers of securities. The objectives of the securities market are:

mobilization of temporarily free financial resources for specific investments;

Formation of market infrastructure that meets international standards;

development of the secondary market;

Activation of marketing research;

Transformation of property relations;

Improving the market mechanism and management system;

Ensuring real control over stock capital based on state regulation;

Reducing investment risk;

Formation of portfolio strategies;

Development of pricing;

Forecasting of perspective directions of development.

The main functions of the securities market include:

The accounting function is manifested in the mandatory recording in special lists (registers) of all types of securities traded on the market, registration of participants in the securities market, as well as recording of stock transactions formalized by purchase and sale agreements, pledge, trust, conversion, etc.

The control function involves monitoring compliance with legislation by market participants.

The function of balancing supply and demand means ensuring the balance of supply and demand in the financial market through transactions with securities.

The stimulating function is to motivate legal entities and individuals to become participants in the securities market. For example, by providing the right to participate in the management of an enterprise (shares), the right to receive income (interest on bonds, dividends on shares), the opportunity to accumulate capital or the right to become the owner of property (bonds).

The redistribution function consists of the redistribution (through the circulation of securities) of funds (capital) between enterprises, the state and the population, industries and regions. When financing the deficit of the federal, regional, regional and local budgets through the issue of state and municipal securities and their sale, the free financial resources of enterprises and the population are redistributed in favor of the state.

The regulatory function means regulation (through specific stock transactions) of various social processes. For example, by conducting transactions with securities, the volume of money supply in circulation is regulated. The sale of government securities on the market reduces the volume of money supply, and their purchase by the government, on the contrary, increases this volume.

The securities market plays an important role as an instrument of market regulation. The auxiliary functions of the stock market include the use of securities in privatization, crisis management, economic restructuring, stabilization of monetary circulation, and anti-inflationary policy.

An efficiently operating securities market performs an important macroeconomic function, facilitating the redistribution of investment resources, ensuring their concentration in the most profitable and promising industries (enterprises, projects) and at the same time diverting financial resources from industries that do not have clearly defined development prospects. Thus, the securities market is one of the few possible financial channels through which savings flow into investments. At the same time, the securities market provides investors with the opportunity to store and increase their savings.

2. Primary and secondary securities markets

The primary securities market is the place where the primary issue and initial placement of securities takes place. The purpose of the primary market is to organize the initial issue of securities and its placement. The tasks of the primary securities market include:

attraction of temporarily free resources;

activation of the financial market;

reduction in inflation rates.

The primary market performs the following functions:

Organization of the issue of securities;

Placement of securities;

Securities accounting;

Maintaining a balance of supply and demand

Determination of the market value of securities;

The secondary securities market is the most active part of the stock market, where most transactions with securities are carried out with the exception of the primary issue and initial placement. The purpose of the secondary market is to provide real conditions for the purchase, sale and other transactions with securities after their initial placement.

The following main objectives of investment activity in the securities market can be identified:

1) regulation of investment flows. Recently, the securities market has mainly been used to transfer capital to industries that provide the highest return on investment;

2) ensuring the mass nature of the investment process. Legal and individuals those who have the necessary funds can freely purchase securities;

3) reflection of ongoing and predicted changes in political, socio-economic, foreign economic and other spheres of society through changes in stock indices;

4) determining the directions of investment policy of enterprises by modeling various options for investing in securities; .

5) formation of the sectoral and regional structure of the national economy by regulating investment flows. By purchasing securities of certain enterprises located in specific territories, the investor invests money in their development. Enterprises whose securities are not in demand are unable to attract the necessary investments;

6) implementation of state structural policy. By purchasing shares of especially important enterprises and financing their development, the state supports socially significant, priority sectors;

7) implementation of state investment policy. Through the government securities market, the state influences the volume of money supply and maintains balance state budget or regulates the size of its deficit,

3. Accumulation of money capital as the basis for the formation of fictitious capital

The accumulation of monetary capital plays an important role in the economy. The process of accumulation of monetary capital itself is immediately preceded by the stage of its production. When money capital is created and is still in the sphere of production, it represents, as it were, pure money capital. Its transfer in the form of a loan to other spheres of the economy means its acceptance of a different shell - loan capital.

After money capital has been created or produced, it must be divided into the part that is redirected into production and the part that is temporarily released. The latter, as a rule, represents the free funds of enterprises and corporations, accumulated in the loan capital market by financial institutions and the securities market.

4. Money capital and fictitious capital: theoretical aspects of similarities and differences

Loan capital is money capital given by the owner as a loan to operating enterprises and generating interest, i.e. Directly loan capital should be considered a special category of money capital, distinguished as capital-property.

Conditions for the formation of loan capital also arise when free funds that do not belong to the bank, but are only in its custody, receive interest from their investment in the economy. It is the amount of this interest that constitutes property. The accumulation of this interest determines the additional allocation of loan capital as property capital.

In a modern market economy, one of the main issuers of securities, as is known, is the state (most often represented by the Treasury). All over the world, centralized issuance of securities is used in a broad sense as an instrument of state regulation of the economy, and in a narrower sense - as a lever of influence on monetary circulation and management of the volume of money supply, a means of non-emission covering the deficit of government and local budgets, a way to attract funds from enterprises and the population to solve certain specific problems. We have accumulated a wealth of experience in modeling and issuing a variety of financial government obligations that meet the needs and demands of various investors - potential investors in government securities.

Commercial banks play a significant role in the distribution and circulation of government securities, purchasing and selling them on stock markets. Such banks occupy one of the leading positions among the holders of the securities in question (for example, in the United States in the late 80s, commercial banks were holders of marketable securities of the federal government in the amount of approximately $200 billion, which is about 10% of the total volume issued in circulation papers). The role of commercial banks as dealers is even greater, through whose hands a significantly larger number of government securities passes than what they accumulate as holders.

Government securities are usually divided into marketable and non-marketable - depending on whether they are traded on the free market (primary or secondary) or are not included in secondary circulation on stock exchanges and are freely returned to the issuer before their expiration date. The bulk of government securities are marketable.

In economically developed countries, government securities play a significant role in financing government expenditures, maintaining the liquidity of the banking system, and developing the economy as a whole. State budget expenses that exceed revenues can also be financed through loans taken by the state from the central or commercial banks. However, as world practice has shown, loans are rarely used for these purposes, since they require the state to pay high interest rates, which exceed the costs of issuing securities. In addition, the banks themselves are interested in issuing short-term loans at higher interest rates. The issue of money to cover the costs of the state budget is also undesirable, since this leads to disruption of monetary circulation and inflation. Thus, the most acceptable option for financing state budget expenditures is the issue of government securities. Traditionally, the following tasks are solved with their help:

Repayment of the current budget deficit. This necessity arises in connection with possible gaps between government revenues and expenditures: budget revenues usually fall on certain dates, and expenditures are distributed more evenly.

Repayment of previously placed loans. The need to issue government securities for this purpose also arises when the state budget is deficit-free.

Smoothing out fluctuations in the receipt of tax payments to the budget (elimination of cash imbalances in the budget).

Providing commercial banks and other financial institutions with liquid and highly liquid reserve assets. In a number of countries, short-term government securities were used for this purpose. By investing part of their resources in debt obligations issued by the government, financial institutions receive income in the form of interest.

Financing local government programs and capital-intensive projects, as well as raising funds for extra-budgetary funds.

Government securities issued by the central and local governments for the purpose of mobilizing monetary resources are of two types: marketable securities and non-marketable government debt. Marketable securities are freely tradable and can be resold to other entities after their initial placement. These include: treasury bills, various medium-term bonds (notes) and long-term government debt obligations. Non-marketable government debt is intended to be issued primarily to the public. They cannot freely pass from one owner to another. These securities are especially effective in conditions of development of the securities market.

The initial placement of government securities is carried out with the help of intermediaries. Among the latter, the leading position is occupied by central banks, which not only organize the placement of new loans, but in some cases themselves purchase large blocks of government debt. In some countries, these functions are performed by the ministries of finance, and in most countries with developed economies, commercial and investment banks and banking houses can act as intermediaries in the initial placement of government securities.

The rate of government securities, like the rate of private stocks and bonds, is subject to constant fluctuations under the influence of changes in loan interest rates and fluctuations in supply and demand for these securities. Thus, during times of difficulty in the money market, these securities fall in price because they are thrown into the market en masse in order to be sold in money.

In the post-war years, there was a clear tendency for market rates of government securities to fall. A particularly significant drop occurred during the last cyclical crises in 1969-1970. and in 1973-1975, as well as in the early 80s. In general, during these periods of time, the rate of government bonds in the United States fell by 45%.

The increase in public debt required the governments of industrialized countries to carry out special measures aimed at maintaining the exchange rate of government securities and carried out by ministries of finance and central banks. In order to constantly finance the state, the central bank, commercial banks and other financial institutions bought up government obligations and thereby maintained the relative stability of their exchange rate.

The huge size of public debt left its mark on the functioning of the private credit system. In the post-war years, the nature of commercial bank deposits and check circulation changed. As a result of the purchase of government securities, part of the deposits becomes fictitious, the money supply is separated from the needs of production, and most of the newly issued banknotes are associated, as a rule, with the purchase and sale of securities. It should be taken into account that a significant part of the government debt, represented by short-term bills, turns into deposits or cash and contributes to the development of inflation. This was one of the important factors the unwinding of the inflationary spiral in the USA and Western Europe in the 70s and early 80s, when the highest inflation rates were observed. In the USA it reached 12-13% on an annual basis, and in Western Europe it reached 20% or more. Thus, the increase in inflation rates is largely caused by the continuous increase in the budget deficit and public debt.

The large share of short-term liabilities in the debt increases the dependence of government fiscal policy on the private loan capital market. On the one hand, the amount and terms of loans, the level of interest and the method of their placement are determined by conditions on the capital market; on the other hand, the government is forced to frequently resort to refinancing its short-term debt. Recently, there has been a clearer trend towards an extension of periods rapid growth public debt and a reduction in the periods of its repayment, and the repayment of public debt becomes both less regular and less significant in size.

For example, in the United States in the post-war years there were qualitative changes in public debt. In order to attract funds from various industrial, financial institutions and individuals, government securities of several types are used: market, non-market, special issues.

Marketable securities, which account for 2/3 of the total debt and are freely traded and purchased, are represented by Treasury bills, notes and bonds.

Difficulties in placing government securities led to the issuance of non-marketable securities consisting of savings notes and tax savings notes. The latter can be presented for payment at any time at the request of the depositor. However, under current conditions, interest rates are sharply reduced if submitted early. The main purpose of issuing non-marketable securities is to widely attract the population's savings.

In the countries of Western Europe and Japan, the degree of development and differentiation of government securities is somewhat lower than in the USA, Canada and England. Thus, in France, although government bonds dominate the securities market over private shares and bonds, the degree of their choice when purchasing is rather limited. There are mainly two types of government bonds quoted and sold on the market: treasury notes and bills.

Thus, each country has its own specific structure of public debt, based on government bonds of various types.

In order to further mobilize the population's funds to finance and refinance public debt, governments of industrialized countries have repeatedly resorted to issuing “special loans” placed in state insurance and pension funds. These papers cannot be transferred to other persons and organizations, but can be presented for payment after one year from the date of their issue. Thus, another means has been found for the forced confiscation of the population's savings and with their help financing government expenditures of various kinds, including unproductive ones.

The most important feature of the debt structure in the 60s and 70s. there was a sharp reduction in long-term and an increase in short-term liabilities. This was one of the factors behind the increase in inflation. The main reason for the shift towards short-term debt was that in conditions of economic difficulties, especially inflation, the private sector was very reluctant to purchase long-term government securities. Credit and financial institutions and individual investors sought to return their funds provided to the state as quickly as possible. Due to the fact that the public debt was mainly short-term in nature, the government, represented by the Ministry of Finance, was forced to place new bills of exchange in large amounts almost every month in order to refinance those securities that were due. At the same time, additional funds were also withdrawn to cover current budget deficits. These events indicate a further aggravation of the debt problem at the government level and difficulties in the public finance system.

The scale of the debt and its short-term nature indicate the strengthening of contradictions in government regulation of the economy through financial system: on the one hand, Western governments in their economic policy more and more are relying on financing long-term expenses, on the other hand, they are focusing on covering deficits with the help of short-term loans. However, this has its own logic, which is explained by the objective conditions existing in the country.

Firstly, with the help of short-term loans when refinancing them, it is possible to quickly obtain the necessary funds. Secondly, in the context of falling confidence in government loans on the part of business circles and the population, the demand for long-term obligations is much lower than for short-term ones.

The problem of government debt has also worsened as a result of the loss of interest in government securities on the part of private financial institutions, which for a long time were the main buyers of government obligations. The highest share of acquisitions of government securities by these institutions, for example in the United States, occurred during the Second World War. The high demand for government securities was explained by a number of factors operating under military conditions. First of all, the demand of industrial capital for loans was weakly expressed, and the release of new issues of private securities was small, since the structure and dynamics of production were determined mainly by military orders from the government. It, in turn, encouraged financial institutions to invest in government securities to cover swollen government wartime expenses.

In the post-war years, the massive renewal of fixed capital in industrialized countries led to high interest rates on private securities. As a result, the funds of financial institutions began to flow into shares and bonds of trade, industrial and transport corporations. Qualitative changes in the allocation of public debt over the long post-war period are confirmed by the fact that the share of the private credit system in the United States in the post-war years decreased noticeably - from 50% in 1946 to 17% in 1990. However, this does not mean that credit and financial institutions and the private sector stopped purchasing government securities altogether. Their interest (especially banks and corporations) is limited to purchasing mainly short-term bonds, which represent a kind of “liquid reserve”.

It can be argued that the problem of public debt by the end of the twentieth century. has only worsened, as evidenced by the fact that previously central banks created conditions for the placement of securities by changing reserve norms and reducing the cost of credit. Recently, they have been forced to acquire a growing mass of these securities themselves, mainly through money issues. As a result, the balance sheet structure of the central reserve banks changed dramatically. If in the pre-war years gold and currency accounted for 81.6% of all assets and 13.1% for government securities, then by the end of the 90s. With gold accounting for only about 10% of assets and Treasury bonds over 75%, government debt further upsets the balance between income and spending. This means that large amounts of money capital are removed from the loan capital market, which could be used to accelerate the rate of economic growth. Thus, the US government, in connection with a large budget deficit, constantly places its loans on the securities market. Small credit institutions (savings and loan associations, credit unions, etc.) express particular concern and dissatisfaction in connection with the increased issues of government loans, since the increased issue of government loans causes an outflow of resources from these institutions. Government spending is typically not offset by tax revenues and creates huge deficits that hang over the capital market.

In this regard, one more important feature of the relationship between the state and the loan capital market should be emphasized: the state not only borrows, but also provides credits and loans. However, the relationship between the state’s supply and demand for loan capital has always been for the most part in favor of demand, i.e. withdrawals of funds from the capital market significantly exceed their provision by the state.

The constant increase in government spending forces the government to increase the demand for loanable capital in order to maintain the rate of economic growth. Which leads to two negative consequences - the withdrawal of a large mass of monetary capital for non-productive purposes and an increase in the tax burden of the population. Thus, the private sector, represented by commercial and industrial corporations, is forced to reduce its demand in the loan capital market. As for the second consequence, public debts are based on government revenues, from which annual interest and other payments must be covered, and therefore modern tax system has become a necessary addition to the system of government loans, an increase in public debt generates an increase in the tax burden.

5. The role and importance of government bonds in government financing

The functional aspects of the government securities market of developed countries include the following components (main functional components):

Mobilization of temporarily free funds of commercial banks, organizations, enterprises, non-bank financial institutions and the population. The concentration of monetary resources through government securities at the state level helps mainly to reduce the budget deficit;

The use of government securities as an active regulator of monetary relations, in particular, on their basis, central banks form monetary policy and coordinate money circulation;

Ensuring liquidity of the balance sheets of credit and financial institutions through the effective implementation of the potential inherent in government securities.

The target orientation of the potential of government securities, reflecting foreign experience, covers:

Investing in state targeted programs for economic development;

Ensuring liquidity of assets of commercial banks and other financial institutions;

covering the deficits of state and local budgets;

Repayment of debts on government loans.

Currently, in developed countries, government securities are the main sources of formation and sale of domestic government debt. Issues of government securities into outstanding domestic debts fluctuate by different countries from 20 to 90%, for example in Germany these values ​​reach 40%, in the USA - 70%, in the UK - 90%.

6. Money capital and fictitious capital

Loan capital is a specific toner that circulates on the loan capital market, since it is a carrier of use value, differing in types, terms, sizes, profitability of loans and securities, which is ultimately determined by supply and demand.

Analysis of money and loan capital allows us to determine the essence, role and functions of the loan capital market. In the process of its development, the loan capital market undergoes certain changes that are important from the point of view of analysis of both the loan capital market and the entire modern mechanism of capital accumulation.

Like loan capital, the loan capital market is a historical category that appeared and developed in the conditions of commodity-money relations, turned into a special sphere of economic relations of the economy, and with development this concept becomes more complex and expanded.

The increase in the scale of accumulation of money capital under capitalism led to the development of the loan capital market, which is the sphere of movement of loan capital carried out under the influence of supply and demand for it. The formation of the loan capital market contributed to the emergence of its forms that reflect the most general and essential properties of the movement of loan capital, its accumulation in the form of money capital and its transformation directly into loan capital.

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

The essence of the loan capital market does not change at all depending on what kind of money capital is used on it: one’s own or someone else’s, accumulated, i.e. it does not depend on whether the banker carries on his business only with his own capital or with the help of capital accumulated in his hands.

The loan capital market plays an extremely important role in modern economic mechanism especially in the industrialized countries of the West. It promotes the growth of production and trade turnover, the movement of capital within the country, the transformation of cash savings into capital investments, the implementation of scientific and technological progress, and the renewal of fixed capital. In this sense, the market mediates the various phases of production and is a kind of support for the material sphere of production, from where it receives additional monetary resources for its development.

First of all, the economic role of the loan capital market lies in its ability to unite small, scattered funds. As a rule, small amounts by themselves cannot act as monetary capital. Combined into large sums, they form a powerful monetary potential. This allows the market to play a greater role in the processes of concentration and centralization of production and capital. It provides the opportunity for industrialists, traders and entrepreneurs to manage, through bankers and their institutions, all the monetary savings of the entire society.

The main role of the loan capital market in the economy is the unification of scattered individual monetary capital and savings of the population through the credit system and the securities market.

7. Features of capital accumulation in the form of securities

Considering the features of the accumulation of monetary capital at the present stage, it is first necessary to dwell on the forms of accumulation and identify a number of trends that have emerged in this area. The structure of the loan capital market consists mainly of two elements: credit and financial institutions and the securities market, which in turn is divided into over-the-counter turnover and the stock exchange.

Credit and financial institutions carry out transactions with capital accumulated by the population, enterprises and the state. Accumulation in these institutions, as a rule, occurs in cash. Money capital accumulated in the form bank deposits, insurance and pension reserves, are used by them to provide loans and purchase securities.

The accumulation of monetary savings of the population is carried out through the direct sale of securities to the population and the accumulation of deposits, contributions, and reserves in various financial institutions. Various segments of the population place their cash savings in shares and bonds of private firms and corporations, as well as in government securities. In the pre-war years in industrialized capitalist countries, the purchase of securities was the most common form of accumulation of monetary savings, especially for wealthy categories of the population.

In the first post-war decades, the role of accumulation in the form of securities decreased significantly due to frequent fluctuations in stock and bond prices, as well as increased competition from financial institutions. At the same time, during the same period, the accumulation of savings through the credit system, which was carried out differentiated by type, began to acquire increasing importance. credit institutions: in commercial banks - banknotes, deposits in current accounts; in commercial and savings banks and specialized savings institutions - savings deposits; reserves in private life insurance companies and pension funds; state funds for social security and insurance; hoarding of precious metals (gold, silver).

Various forms of accumulation of cash savings of the population have a certain economic impact. In conditions when the issue of money exceeds the needs of the economy, the accumulation of savings in the form of cash and bank current accounts is a factor that increases inflation. An increase in the money supply leads, as a rule, to the depreciation of money and a decrease in real incomes of the population. At the same time, excessive accumulation of money by the population means a temporary cessation of consumption, entailing a reduction in consumer spending, which in some cases negatively affects the rate of economic growth.

During the Second World War and in the early post-war years in most Western countries, due to growing inflationary trends, money and current accounts were the dominant form of monetary savings of the population. In subsequent years of relative stabilization of the economic situation and normalization in the monetary circulation system, the importance of these forms of accumulation began to decrease, despite the absolute growth of the money supply in the hands of the population.

Savings deposits in banks and other credit institutions in the post-war years became the most important source of accumulation of monetary capital. Savings deposits from private and state credit institutions financed capital investments in industry and other areas of the economy, as well as government expenses. The influx of cash savings into savings institutions was stimulated by relatively high interest rates on deposits. In the post-war years in industrialized capitalist countries it averaged 3-4% per annum, and for some types of long-term deposits it was 5% or higher. If in the first post-war years high level percent was explained by inflation and insufficient supply of loan capital, then in the subsequent period it remained at the same level due to the growth of capital investments and credit needs.

In the first post-war years in Germany, both the securities market and the stock market were essentially frozen. Their movement and development began only at the end of 1954 thanks to government intervention and the introduction of tax and other benefits. The high growth rates of the German economy increased capital accumulation and contributed to the increase in fictitious capital. In 1965, the issue of all types of securities amounted to 17.8 billion marks, or 4.4% of the net national product and 23% of gross capital investment in the country. The par value of all fixed interest securities outstanding was 100 billion marks, and their market value was 78 billion marks. At the same time, during this period, the mobilization of cash savings into securities increased. In the early 50s. Individual investments in securities amounted to 100 million marks, and in the mid-60s they already reached 6.9 billion marks, which amounted to 20% of all personal savings in Germany. This trend reflected the growing role of the securities market in mobilizing monetary capital. Moreover, if in 50-60 years. In the structure of purchased securities, bonds and mortgages predominated, then by the mid-60s. The share of purchased shares increased sharply, amounting to approximately 1/3 of the total volume of securities.

The main trends in the accumulation of money capital, and in particular through securities, indicate that in industrialized countries the main flows of money capital flow through the hands of wealthy segments of the population, although recently it has been discovered that the accumulation of securities in the hands of the middle strata has increased. In England, as a result of the redistribution of taxes in favor of the wealthy, from 1983 to 1986 the number of millionaires increased from 7 thousand to 20 thousand.

8. The securities market in the structure and mechanism of the loan capital market

Functionally and institutionally, the national loan capital market includes operations of private credit and financial institutions, government agencies, foreign institutions and the securities market, which in turn is divided into over-the-counter (primary) and exchange turnover, as well as the market over the counter - the “street” market. Primary over-the-counter turnover mainly covers bonds of new issues. Only shares are traded on the stock exchange, as well as a number of previously issued bonds, both private and government.

The state, represented by credit institutions, is not only a seller of securities, but also their buyer, thus participating in the redistribution of monetary capital. Operations of financial institutions on the capital market are not always associated with the acquisition of securities, therefore their activities should not be identified with either the exchange or over-the-counter turnover of fictitious capital. In some cases, they finance corporations without purchasing securities through direct lending. At the same time, over-the-counter turnover and the stock exchange are areas where credit and financial institutions play a major role. In addition, foreign banking capital is increasingly invading national capital markets.

Constant mutual supply and demand for loan capital create a market for loan capital. The mechanism of its functioning should be understood as the accumulation, movement, distribution and redistribution of monetary capital under the influence of supply and demand, as well as existing interest rates.

The market mechanism, as a rule, is determined by the supply and demand of existing market actors: private enterprises, the state and individuals. The activities of these entities shape the level of interest rates and its fluctuations depending on market conditions: increased demand increases rates and reduces supply and, therefore, reduces the transformation of money capital into loan capital; on the contrary, the predominance of supply over demand lowers rates and increases the movement of loan capital from the market.

In conditions of prolonged imbalance between supply and demand under the influence of unstable economic conditions, the indifference of loan capital to the sphere of its application is lost. It begins to invest according to the selective principle, i.e. where you can actually get income in the form of interest.

A bill of exchange represents a unique form of application of loan capital, since the market imparts the character of an impersonal demand on the part of the lender, but not for income, as in a security, but for money. Endorsement, banker's acceptance are means of making a bill a requirement on the market, and not on individual person. Moreover, a bill of exchange, like securities (stocks and bonds), can be sold (discounted) at any time.

In a market economy, when a strong and multi-stage credit system has been developed, the social nature of the loan capital market is enhanced. In the money market, all loan capital as a single mass is constantly opposed to functioning capital, and therefore the relationship between the supply of loan capital, on the one hand, and the demand for it, on the other, always determines the market level of interest. This happens to a greater extent when a more developed credit system and its high concentration create a universal social status for loan capital and in this way throw it onto the money market.

IN modern conditions The unity of the loan capital market is increasing, since the accumulation of money capital and savings is carried out mainly by the credit system, the joint-stock form of enterprises is widely used, and dividends are more fully reduced to loan interest.

At the same time, there are opposite trends in the market that undermine its unity, which include the further monopolization of the market by the largest credit institutions; the process of internationalization associated with the migration of monetary capital between national markets; as well as cyclical instability of the economic environment and inflationary processes. Therefore, the securities market with its main elements (over-the-counter and exchange turnover) is a mechanism that is functionally included in the loan capital market. The securities market develops and moves according to its own laws, determined by the specifics of the so-called fictitious capital, but is closely linked to the capital market.

Currently, practice shows that impulsive slowdown or acceleration of securities market operations significantly affects the movement of loan capital, its market structure and functioning. The most painful and weak side of the securities market is its acute susceptibility not only to economic but also to political shocks, forcing it to operate at a faster rate than the capital market and other market mechanisms. Moreover, the suspension of the securities market in some cases can have quite tragic economic and political consequences for the country.

9. Accumulation of money capital

Loan capital, as a rule, operates on the basis of the circulation of real and monetary capital. At the same time, fictitious capital appears and develops on the basis of loans. Fictitious capital should be understood as the accumulation and mobilization of monetary capital in the form of various securities: shares, bonds of private companies, government securities (bonds).

The sphere of application of fictitious capital is loan capital, therefore the origins of fictitious capital lie in loan capital, and without the latter the former cannot develop. With the improvement and formation of loan and fictitious capital, the formation of their specific markets, they constantly interact and transform each other. The process of flow of one capital into another is explained, as a rule, by market considerations, as well as by the profitability of investments (in the form of deposits in banks, insurance and pension funds investing in securities, etc.).

This is a continuous and dynamic process. Typically, economic growth in the cyclical recovery phase leads to an increase in stock prices, and the size of fictitious capital increases, but outwardly the process looks like the accumulation of monetary capital. Its accumulation largely means the accumulation of certain claims to production, the market price and the fictitious capital value of these claims, which arise primarily as a result of the fact that the joint-stock form continues to be dominant in a market economy. In addition to stocks, forms of monetary capital include private and government bonds, bank and savings accounts, accumulated insurance and pension reserves, as well as bills and banknotes.

With the development of interest-bearing capital and the credit system, every capital seems to be doubled, and in some cases tripled due to the use different ways accumulation. The same capital or debt-claim may appear in different forms and in different hands, the greater part of this "money capital" being entirely fictitious. The accumulation of fictitious capital proceeds according to its own laws and therefore differs both qualitatively and quantitatively from the accumulation of money capital. At the same time, these processes interact. Stock market crashes negatively affect the process of accumulation of monetary capital, and overstrain in the loan capital market usually causes downward fluctuations in stock prices. As a rule, the depreciation or appreciation of these securities is not associated with movements in the value of the actual capital they represent. Therefore, the wealth of the nation or country, due to such depreciation or appreciation, generally remains at the same level as it was before the process began.

Fictitious capital arises not as a result of the circulation of industrial capital in monetary form, but as a consequence of the acquisition of securities that give the right to receive a certain income (interest on capital). One form of fictitious capital is government bonds. The formation and growth of joint stock companies contributed to the emergence of a new type of securities - shares. As the, joint-stock companies began to turn into more complex associations (concerns, trusts, cartels, consortia). Their development in conditions of intense competition and the scientific and technological revolution led to the attraction of not only share capital, but also bond capital. This entailed the issuance and placement of bonds by private companies and corporations, i.e. private bond loans. Therefore, the structure of fictitious capital was formed from three main elements: shares, private sector bonds and government bonds (central government and local authorities). The private sector and the state are increasingly attracting capital by issuing shares and bonds, thus increasing fictitious capital, which significantly exceeds the actual, real capital necessary for capitalist reproduction. In the conditions of speculative transactions in modern society, fictitious capital, representing securities, acquires independent dynamics, independent of real capital.

At the same time, fictitious capital reflects the objective processes of fragmentation, redistribution, and unification of existing real productive capital. In the fictitious structure itself, the share of government bonds has increased significantly, which is due, firstly, to the deficit of state budgets and the growth of public debt, and, secondly, to increased government intervention in the economy. In Western Europe and Japan government loans to a certain extent also reflect the development of state ownership. At the same time, the swelling of fictitious capital due to the issuance of government loans to cover budget deficits serves as a source of the development of inflationary processes and thereby the depreciation of money, and as a result, currency shocks.

The independent movement of fictitious capital in the market leads to a sharp separation of the market value of securities from the balance sheet, which further deepens the gap between real material assets and their relatively fixed value represented in securities.

The discrepancy and disproportions between the dynamics of fictitious capital and real productive capital are accompanied by a depreciation of fictitious capital, which, as a rule, is expressed in a fall in securities prices and, ultimately, in stock exchange crashes.

There are three main aspects to the concept of accumulation of monetary loan capital: firstly, it is the equivalent of real national economic accumulation, since the national rate of monetary accumulation is quantitatively equal to the rate of real accumulation, i.e. share of capital investment in GNP and national income; in this sense, accumulation is carried out in material and monetary forms in any sector of the economy. Secondly, the accumulation in the form of money is equivalent to the supply of money capital by the credit system and the loan capital market. Thirdly, the accumulation of money capital is also the accumulation of the monetary value of fictitious capital. This is the main macroeconomic role of the market, which reflects the accumulation and mobilization of money capital.

In general, these provisions remain relevant, and now we can talk about their certain change under the influence of inflation, which in the last decade has turned into chronic illness capitalism. On the one hand, due to rising prices, the national rate of monetary accumulation may potentially be overestimated; on the other hand, a high level of inflation distorts the demand and supply of loan capital, as well as the amount of fictitious capital.

The huge masses of money capital accumulated and mobilized through the loan capital market, its size and cumbersome mechanism create a certain illusion that the volume of money capital is potentially equal to the volume of loan capital. This appearance arises primarily in those countries where there is a fairly flexible multi-stage and branched credit system. For countries with a developed credit system, it can be assumed that all monetary capital that can be used for lending operations exists in the form of deposits in banks, insurance reserves and persons capable of lending money. At least this allows you to potentially evaluate money capital as loan capital. It is the storage of funds in the accounts of various financial institutions, in securities, as well as the expression of loan capital in monetary form that creates the appearance of blurring the boundaries between money and loan capital.

These boundaries are increasingly blurred with the development of the credit system. As a rule, money capital is accumulated either in the form of Securities, or bank deposits, or, finally, banknotes. This means the transfer of capital into a loan (since a banknote can also be considered as a loan from its holder to the issuing bank, and through it to the state, etc.).

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Before talking about the importance and place of the financial market in a market economy, it is necessary to go a few steps higher and look at the objective need for the presence of this segment in a market economy. To do this, consider the flow diagram of goods, income, products and money (see figure).

Participants of the circuit:

households;

enterprises;

state;

financial enterprises(mostly banks).

The state collects taxes and carries out expenses - it buys goods and pays wages from the budget. Banks redistribute monetary resources. Enterprises produce products and provide services.

The output of products is divided according to its use into several parts:

consumption "C";

government spending "G";

investments "I".

Gross domestic product (final output) "Y" is equal to the sum of consumption, government spending and investment:

Y = C + G + I.

This formula lacks the participation of the foreign economic activity of the state, as the resulting indicator - the balance of foreign trade in goods and services (X). Y is the sum of expenses of all consumers (population, government and investors).

The state can significantly influence GDP.

The scheme of economic turnover with the participation of the state and taking into account investment activity demonstrates the process in which the expansion of production is carried out. In this case, households do not spend all their income on consumption, but put aside part of it in the form of savings.

The redistribution of savings and their transformation into investments occurs with the participation of banks playing the role of intermediaries. The state collects taxes from the population (households) and enterprises, thereby forming revenue part state budget. Expenditure items of the state budget include the purchase of goods and services (for defense needs, road construction, support of state enterprises and maintenance of institutions, etc.), payments of social transfers to households (subsidies, allowances, pensions, scholarships).

To ensure the normal course of the circulation, the amount of savings (S) must be equal to the amount of investment (I).

The volume of national production and the rate of economic growth, as a rule, constantly fluctuate under the influence of a number of factors, primarily under the influence of changes in the investment sphere.

As mentioned above, the state is capable of influencing the dynamics of GDP in a very serious way. And if its significant growth does not occur in the presence of enormous demand from households and enterprises (the need to update production assets), all claims should be addressed to the state government. In our case, to those who form the government.

Let's consider the mechanism for redistributing capital between lenders and borrowers with the help of intermediaries based on supply and demand for capital. In practice, the financial market is a set of credit organizations (financial credit institutions) that direct the flow of funds from the owner to the borrower and back. Main function This segment of the economy is the transformation of idle funds into loan capital.

The financial market is an extremely complex system in which money and other financial assets of its participants circulate independently, regardless of the circulation of real goods. This market operates with a variety of financial instruments, is serviced by specific financial institutions, and has an extensive and diverse infrastructure.

The financial market is a market where the objects of purchase and loss are a variety of financial instruments and financial services. It consists of the following important market segments: foreign exchange, securities, futures and options.

Financial market:

§ mobilizes temporarily free capital from a variety of sources;

§ effectively distributes the accumulated free capital among its numerous final consumers;

§ determines the most effective directions for the use of capital in the investment sphere;

§ forms market prices for individual financial instruments and services that objectively reflect the emerging relationship between supply and demand;

§ carries out qualified mediation between the seller and the buyer of financial instruments;

§ creates conditions for minimizing financial and commercial risk;

§ accelerates the turnover of capital, i.e. contributes to the activation of economic processes.

The larger the gap between the volume of proposed investment and savings, the more urgent is the need for the functioning of financial markets to distribute savings among end-users. The meeting of the final investor and the ultimate owner of funds should be carried out in an optimal way and at the lowest cost.

Effective segments of the financial market are absolutely necessary to ensure the mobilization of free capital and maintain the economic growth of the country. If they had only their own savings, market subjects could invest no more than what they had accumulated. Therefore, their investment activity would be limited. If the size of the planned investments exceeds the amount of current savings, market participants are simply forced to postpone their implementation until the required funds are accumulated. Due to the lack of financing, market participants without sufficient capital would have to postpone or abandon many promising investments or finance less than ideal ones. best projects, i.e. capital would not be used optimally. Market participants who do not have attractive investment options at their disposal would have no choice but to accumulate funds. On the other hand, promising investment projects would not be implemented due to a lack of funds from firms that have investment alternatives.

The role of financial markets in a market economy can be illustrated by the simplified flowchart below.

All cash flows, regardless of the source of origin, necessarily pass through the financial market with the help of financial institutions.

For example, if the state offers to buy its securities to commercial organizations and households to cover the budget deficit, then these operations are carried out on the financial market through various financial institutions. If a commercial organization needs to attract additional capital, it, through the financial market, turns to other commercial organizations and households that have temporarily available funds by issuing shares and (or) bonds.

BLOCK DIAGRAM

"The role of financial markets in a market economy"

In modern conditions, the financial market is an integral part of any market economy, a connecting link between the main participants in the market economy - the public sector, commercial organizations and households.

The experience of the functioning of the financial market is of significant interest to domestic state and commercial financial institutions in the context of the emergence of a market-type economy in our country and is therefore used by us in developing methodological recommendations.

CURRENCY MARKET

Currency market- this is a set of conversion and deposit-credit operations in foreign currencies carried out between counterparties (foreign exchange market participants) at the market rate or interest rate.

Currency operations - contracts of foreign exchange market agents for the purchase and sale, settlements and provision of loans in foreign currency on specific conditions (amount, exchange rate, interest rate, period) with execution on a certain date. Current conversion transactions (exchanging one currency for another) and current deposit and credit transactions (for a period of up to one year) make up the bulk of foreign exchange transactions.

The main difference between conversion operations and deposit and credit operations is that the former do not extend over time, i.e. are carried out at some point in time, while deposit transactions have a duration in time and different urgency.

Markets can be classified according to several criteria.

By type of operation. There is a global market for conversion transactions (one can distinguish markets for conversion transactions such as euro/dollar or dollar/Japanese yen) and a global market for deposit transactions.

On a territorial basis. Largest markets: European, North American, Far Eastern. In turn, large international monetary and financial centers are divided: in Europe - London, Zurich, Frankfurt am Main, Paris, etc.; in North America - New York; in Asia - Tokyo, Singapore, Hong Kong.

The volume of transactions in the global foreign exchange market is constantly growing, which is associated with the development of international trade and the abolition of currency restrictions in many countries. The dynamics of the daily global interbank foreign exchange market are presented in Table 1.

Dynamics of daily turnover of the world interbank foreign exchange market in 1986-1995. (billion dollars)

Table 1

<Валовой оборот за вычетом двойного учета в стране и за рубежом. Источник - информационное агентство Доу-Джонс.

The role of the financial market in a market economy

At the macro level, there are three aggregate markets: the market for goods and services, the resource market and the financial market. Four sectors interact in these markets: entrepreneurs, households, the state and the foreign economic sector. The need for the first two macromarkets is obvious: in the resource market, entrepreneurs acquire factors of production (land, labor and capital) in various forms (ownership, rent, hire), produce goods and services, and then sell them on the goods market. What caused the need for the financial market? This is explained by the fact that economic sectors, having received disposable income at their disposal, do not use the entire amount received for consumption, but direct part of the money to savings. The presence of savings encourages entrepreneurs, the state, and participants in foreign economic activity to borrow these amounts for their own purposes. However, it is obvious that when any individual or legal entity approaches another person with a request to lend a particular amount of money, then it is advisable for the borrower to provide the lender with some asset of real value as collateral.

The financial market mainly serves to enable the entrepreneurial sector, the state and participants in foreign economic activity to obtain borrowed funds.

The securities market is an integral part of the financial market and exists to facilitate transactions for the sale and purchase of securities. It allows you to accelerate the transition of capital from monetary to productive form. In the securities market, there is a redistribution of capital between industries and spheres of the economy, between territories and countries, between different segments of the population.

A developed domestic financial market could significantly facilitate the task of integration into the global financial market and create a channel for investing foreign capital in our economy through the placement of our securities.

Organizing a large-scale market for tradable securities is a complex and time-consuming process. The mass circulation of shares must be preceded by the mass creation of joint-stock enterprises, which in our conditions must be preceded by the denationalization and privatization of enterprises. This process is very difficult.

There is another characteristic feature that distinguishes the Russian market - the lack of statistical data on its condition over a long period, and it is such data that becomes the basis for modeling.

Currently, the most important regulatory document regulating the activities of the Russian financial market is the Law “On the Securities Market”, adopted in 1996. In accordance with this law, all activities in the securities market are licensed.

The Russian financial market is dominated by government securities, occupying about 80% of the market. The emergence and development of government securities is associated with problems of budget deficits at various levels. The state has made several attempts to attract investors to finance the budget deficit. The most successful were securities sold among legal entities.

Among government securities, the first place is consistently occupied by Government short-term bonds (GKOs) and Federal loan bonds with a variable coupon (OFZ-PK).

A feature of the Russian market is the high yield of government securities. Gradually, with increasing confidence in these securities and changing trends in other segments of the financial market, in particular the foreign exchange market, the state was able to borrow money at a lower level of profitability.

Recently, municipal securities issued by constituent entities of the Russian Federation have played an increasingly significant role. They represent a growing and very interesting part of the financial market.

The government securities market is a centralized exchange market. The center is the Moscow Interbank Currency Exchange.

The Russian corporate securities market has gone through several stages in its development. In 1990 – 1992 prerequisites for its development were created. In 1993 - 1994 passed the “stage of privatization checks”. In the second half of 1994, the circulation of shares of joint-stock companies began, and the gradual formation of a market for large investors and intermediaries.

The Russian financial market mainly used the legal potential of Russian investors - legal entities. In many ways, its functioning is currently associated with the influx of foreign capital. This is expressed in the admission of non-residents to government securities and in the entry of Russian corporate securities into foreign markets through the mechanism of depositary receipts.

Great opportunities for the Russian financial market could open up through attracting funds from the population stored in the form of cash. But the Russian population is the most distrustful investor, who also has negative experience in the form of securities like MMM.

Financial markets in developed countries rely on the vast savings of individuals. The general poverty of our population and the lack of free savings are an objective obstacle to the development of a broad financial market. The population is not psychologically prepared to accept investing their funds in the debt obligations of new organizations unknown to them.

For the market to function, confidence in the ability to entrust one's savings to intermediary institutions is required. This public trust must be developed gradually through positive examples. In a short time, a huge amount of securities appeared on the Russian market: shares of privatized state enterprises and newly established joint-stock companies, privatization checks, bills and government bonds. A number of regulations have been adopted regulating the issue and circulation of securities, as well as the rules of conduct for market participants.

According to economic theory, the entire commodity world is divided into goods and money. Goods are goods and services. The concept of money includes money itself and capital, that is, money that brings new money.

There are two main ways of transferring money - through the lending process and through the issuance and circulation of securities.

Currently in Russia there is a certain number of legislative acts that regulate the financial market, but they are not enough. This situation is largely generated by the dynamic development of this market and the lag behind legislative activity. Along with this, one can note such a negative point as the insufficient legal protection of citizens when they carry out various transactions on the securities market.

Russian legislation does not establish adequate measures of administrative and criminal liability for violations in the financial market. There are practically no measures against the use of insider information and insider trading, as a result of which it is impossible not only to identify an offense, but also to qualify it as such. The concept of manipulation is not clearly defined: it concerns only the securities market. At the same time, the prohibition of market manipulation is established only for professional market participants, which significantly narrows the circle of persons who could potentially be the subjects of such violations. The same largely applies to the foreign exchange market.

Let us repeat that an important condition for ensuring the stability of the financial market is its effective regulation, primarily by the state. It is this that must ensure fairness, transparency of the market, reduction of systemic risk and protection of the interests of investors (depositors), establishing requirements for the activities of financial institutions and sanctions for their violation.

This is especially relevant due to the fact that the population has significant resources necessary for the effective implementation of investment processes in the real economy of Russia.

The population is more or less aware of banking sector products such as deposits. Other financial products (products of collective investment institutions, pension and insurance products) are practically unknown to the population, which was clearly demonstrated during the implementation of the pension reform. According to some estimates, only 10-15 thousand citizens are active participants in the Russian stock market (less than 0.1% of the Russian population). For comparison: in South Korea, the share of securities investors in the total population is 8.3%, in Japan – 26.6%, in Australia – 36.5%. In the US, 48.2% of households own only shares.

Surveys of the middle class indicate an insufficient savings culture. Deposits in banks are made by 66% of the total number of respondents, in foreign currency - 46%, in real estate - 34%, in land plots - 23%. The share of citizens investing in business assets is noticeably smaller: 4.8% of respondents invested in their own enterprise; in shares of those enterprises where they work - 5.3%, in shares of other enterprises - 5%, in financial companies and mutual funds - 3.2%. But it is these assets that serve as the basis for long-term investments.

Marenkov N. L. Russian securities market and exchange business - M.: Editorial URSS, 2000-p.7.

World economy and international relations, paragraph 3, 2004.

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