Formation and development of the capital market in the Russian Federation. Formation and development of the capital market. The rate of capital turnover depends on many factors: on the structure of the productive capital itself, the duration of the working period in production, the state of transport
The purpose of the course work is to consider the features of the development of the capital market in Russia.
For this it is necessary: to consider alternative interpretations of capital; reveal the essence and structure of the capital market, its place in the system of markets; analyze the main theoretical models of the capital market and assess the current state of the capital market in Russia; show the features of the economic behavior of the main subjects of the capital market and the state impact on the capital market and its structure.
To define the concept of "capital market" in the course work, it is necessary, first of all, to reveal the essence of the category "capital", to highlight the various approaches to the definition of this category. This will be helped by reference to the following literary sources: Blaug M. Economic thought in retrospect. S.679; Theory and practice of entrepreneurship / Ed. V.D. Kamaev. Ch. 9, 11; Economic theory (political economy): Proc. / Ed. IN AND. Vedyapina, G.P. Zhuravleva. Ch. eleven.
Note that the essence of capital is revealed through its properties:
1) it acts as a limited resource;
2) has the ability to accumulate;
3) has a certain liquidity;
4) being in motion constantly changes its own forms;
5) acts as a self-increasing value.
Due to the ambiguity of the interpretation of the category "capital", there is also the problem of defining the concept of "capital market". Depending on what is the object of the relationship between sellers and buyers in the market, there are various interpretations of this concept. In one case, the capital market is part of the market for factors of production, and then capital is understood as physical capital, and the main subjects of the market are the sphere of business (entrepreneurship) and the sphere of household (households). In the second case, capital in the financial market is understood as money capital, so the capital market is one of the constituent parts of the loan capital market.
The essence of the capital market is manifested in its economic functions:
- pricing consists in setting a price (percentage) for capital;
- balancing consists in establishing a balance between two types of markets: commodity, where the company acts as a supplier selling its goods and markets for other factors of production (land and labor), in which the company acts as a carrier of demand;
- stimulating is to encourage entrepreneurs to invest in the most profitable way;
- informational allows market participants to receive information about supply and demand, market conditions, the phase of the economic cycle, and the investment climate through constantly changing prices, interest rates, stock quotes.
Possible options for the development of the capital market of any country can be reduced to a range of models according to the degree of state intervention. In classical political economy, the state has nothing to do with the flow of capital, the investment process, the amount of loan interest, since these processes are regulated by the market.
In the Keynesian model, state regulation of the capital market is aimed at stimulating demand.
Monetarists and proponents of the supply theory demand from the state actions aimed at mobilizing the market potential of the economy, maintaining the system of free enterprise.
Considering the evolution of views on the processes of formation and development of the capital market and on the role of state intervention in the economy in order to stimulate economic growth, it should be noted that no system of views, as Galbraith argued, is capable of providing an exhaustively “true” explanation of how the economy actually functions. modern economy. Only a creative synthesis of elements contained in various schools and trends can ensure success and give an idea of the functioning of the modern economic system. Economic relations that develop between the subjects of the capital market are realized through economic behavior. Therefore, in this work it is advisable to highlight the features of the economic behavior of the main subjects of the capital market in Russia: market institutional investors (commercial banks, pension funds, investment companies, etc.), households, enterprises and the state.
In particular, the peculiarity of the behavior of market institutional investors in Russia at the present stage is that they are focused on the fuel and energy complex, metallurgy and telecommunications. Many of them are part of FIGs and serve the enterprises that are part of them.
In the final part of the work, it is necessary to dwell on the priority areas for improving the efficiency of state regulation of the capital market in Russia: reducing inflation and the rate of interest; increase in deposit rates on deposits of the population in savings institutions and organizations; stimulating the inflow of foreign capital into the sectors of the real sector of the economy and limiting its activities in sectors related to the implementation of the national-state interest (exploitation, national natural resources, radio, television, satellite communications, military-industrial complex).
Sample plan for chapters
Introduction
1 Essence of capital: different approaches
1.1 Analysis of the concept of "capital" in various economic schools
1.2 Classification features of the concept of "capital"
2 The main theoretical models of the capital market and assessment of the current state of the capital market in Russia
2.1 Main theoretical models of the Russian capital market
2.2 Analysis of the current state of the capital market in Russia
3 Trends in the development of the capital market in Russia
3.1 Ways to improve state regulation of the capital market in the Russian Federation
3.2 Analysis of options for the development of the Russian capital market
Conclusion
Main literature
1. Bertenev S.A. Economic Theories and Schools (History and Modernity): A Course of Lectures. M., 1996.
2. Blaug M. Economic thought in retrospect: M., 1994.
With the transition to a market economy in Belarus, the Soviet model of a super-centralized planned economy was dismantled, in which there was no capital market, and the distribution of resources (fixed assets, investments, etc.) was carried out through funding and centralized material and technical supply in the system of the State Planning Committee and Gossnab of the former USSR. And if the dismantling does not require much effort, then the creative work on the formation of new market institutions for the movement of capital in the country is extremely difficult. Almost the entire 20th century The rapid development of the capitalist system took place not only without the participation of the USSR and its union republics, but also in the tough ideological struggle of the countries of the socialist camp with this system. And the transition to a market, a market economy could not rely on any institutional, organizational, personnel and other traditions, experience. Everything started almost from scratch. Therefore, the formation of market institutions, including the capital market, was and is based on the experience of highly developed Western countries, its comprehensive and in-depth study and adaptation to the specifics of Belarus and its economy.
The category "capital" has acquired a multi-valued character over many centuries of functioning and development of a market economy. Depending on the system of relations, goals, functions, this fundamental concept is considered - in the reproduction process (production, distribution, exchange, consumption), in the “goods - money - goods” movement, in the market coordinates of purchase and sale, and so on. , - capital has various definitions. In economic theory, the capital market is an organic part of the market for factors of production. And when it comes to capital as a factor of production, they mean real (physical) capital, including man-made resources used to produce goods and services, or means of production, investment goods that do not directly satisfy human needs.
When it comes to the capital market, they mean the financial capital market, primarily the credit market.
The economic content and functions of real capital are revealed in its movement through the phases of market circulation, turnover and reproduction. Passing through three stages: circulation (in the sphere of circulation, the firm buys the means of production and labor power it needs with money), production (in this sphere, the means of production and labor create a commodity and its value) and again circulation (here the commodity is transformed from commodity into monetary form), the capital of the company passes from one functional form to another - monetary, productive, commodity, up to the return to the monetary form. Thus, the circulation of capital is carried out and its entry into the market both in the form of real capital and in the form of money.
Capital in the form of means of production cannot physically flow from one industry to another, and without such an inter-industry overflow, the market economy cannot function. And this process is usually carried out in the form of the movement of money capital. The contradiction between the need for the free transfer of capital from one branch of production to another and the fixation of production capital in a certain natural (physical) form is resolved in the movement of money capital provided for loans. The transformation of money capital into loan capital is provided by credit. With its help, free cash capital and income of business entities, the household sector and the state are accumulated, turning into loan capital, which is transferred for a fee for temporary use. Therefore, credit in a market economy is needed primarily as an elastic mechanism for moving capital from one sector to another and managing the rate of profit.
Credit is the oldest form of economic relations, generating income in the form of interest on loans, trade credits, deposits, etc. And loan capital is money capital that is loaned out on a repayment basis for a fee in the form of interest.
The movement of financial flows between lenders and borrowers, owners and their firms forms the movement of capital.
Capital flows, including international ones, are divided into a number of forms. First of all, according to the functional purpose, the movements of loan capital (in the form of a loan) and entrepreneurial capital (in the form of investments) are distinguished; according to ownership, private and state capital are allocated, according to the intended purpose - private and state, direct and portfolio investments; in terms of movement - short-, medium- and long-term capital.
Short term capital- capital mobilized for a short period in order to cover additional
demand for money. Accordingly, the market for short-term loan capital, or the money market, is a market for transactions in short-term securities with a low level of risk (commercial bills, banker's acceptances, transferable certificates of deposit). This is a market for stock dealers who buy and sell reliable short-term securities.
Securities- payment documents (checks, bills of exchange, letters of credit, etc.) and stock values (shares, bonds, etc.) in national and foreign currencies. A security acts as a document that determines the share of ownership in the issuing company and creditor relations with the issuer in the face of companies, municipalities or the state, as well as indicating other ownership rights.
Stocks and bods market-- part of the loan capital market, where the emission, purchase and sale of securities and rights to them are carried out.
Loan capital market- this is a market of medium-term (from] a year to 5 years) and long-term (over 5 years) loans, mediating the connection of the supply of medium- and long-term cash savings of the non-financial sector and the demand for medium- and long-term loans necessary for financing (investment) purposes. It is often referred to as the capital market.
Money market includes all financial institutions that are engaged in the purchase, sale and transfer of short-term (up to 1 year) credit obligations and bills, as well as the international dealer market for short-term financial obligations issued by the state, firms and financial organizations.
The main money market securities are treasury bills, commercial paper, banker's acceptances and freely tradable certificates of deposit.
The money market usually includes several segments, the most important of which today is the so-called interbank market, or the market for interbank deposits. Short-term interbank transactions play an important role in any national market, and in the international market they account for the vast majority of credit resources (several trillion dollars). The interbank market is the most effective tool for the short-term redistribution of bank liquidity, ensures the rational use of the total resources of banks, and also allows you to make a profit, manage currency and interest rate risks, etc.
capital market- a long-term segment of the loan capital market, including primarily the issue of bonds and shares and their secondary markets. The historical basis of the capital market is the stock exchange. In Great Britain, for example, the stock exchange was organized in 1773 (before that, securities were traded in London coffee houses), and in the USA - in 1792 as a result of an agreement between brokers. At present, the capital market is not limited to stock exchanges, since in many countries “over-the-counter” and “near-exchange” markets have developed and their importance is constantly growing.
The loan capital market has a "wholesale" character, i.e. includes mainly fairly large operations. The most important economic function of the loan capital market is the formation of the price of loan capital (interest) based on supply and demand. Any loan capital market exists in the unity of the primary and secondary markets. If the primary market clearly serves to redistribute capital (there are creditors and borrowers), then in the secondary market there is only a change of owners of debt obligations (securities), i.e. the size of the resources of the original borrower does not change. The secondary market allows you to objectively assess the current value of an asset, guarantees the investor the opportunity to sell it, and creates the preconditions for extending lending terms.
The structure of interest rates includes "wholesale", or market, and "retail" rates. The first refers to rates on large transactions between financial institutions, and the second refers to rates on transactions with customers.
The rate structure of any money market is usually based on the official discount rate (fixed) or the current rates on central bank operations. Because central bank discounting of commercial paper carries little or no risk, banks can traditionally be refinanced at the central bank. The second most important element of the rate structure is the rate on treasury bills; the third is the rates of the certificates of deposit market.
In the international capital market, the most widely used rate is LIBOR (London interbank offered rate - LIBOR), as well as LIBID and LIMIN. There is always a small difference between international and national interest rates. This is explained, according to most economists:
Restrictions on the flow of capital;
Different tax regimes for international and domestic transactions;
Reserve requirements for banks in the domestic market;
difference in transaction costs for similar operations;
The presence of costs when transferring, for example, from dollars to euros;
Incomplete matching of instruments in the international and national capital markets.
As globalization processes unfold, the integration of national and international markets will intensify.
In recent years, the loan capital market has received strong development, its scale has grown rapidly, its structure has changed, new market segments, new instruments and operations have appeared, the process of financial innovation has accelerated, trends towards securitization, an increase in the role of off-balance sheet operations, and convergence of national markets have intensified. Currency and interest rate swaps, which today are associated with the majority of bond issues, currency and interest rate risk insurance schemes (see subparagraph 5.4.4), have become extremely widespread in the international market.
Swaps use primarily the difference in interest rates in various segments of the international loan capital market, in different national markets, and allow one or another borrower to gain access to the market or currency he needs on better terms. Interest swaps are off-balance sheet transactions, currency swaps are balance sheet transactions, but they have the same economic essence - the union of various segments of the loan capital market.
Futures (terms exchange) and option transactions with financial instruments or, as they are also called, derivative financial assets, have become important.
Forward, futures, option markets and the swap market form a futures market, the subject of which is the supply of an asset (stocks, bonds, bills, bank deposits, currency, goods) in the future, as well as the futures contracts themselves. (Transactions aimed at the immediate delivery of an asset are called cash or spot transactions.)
The main reason for the active participation in the derivatives market of a wide range of organizations and individuals, and primarily manufacturing enterprises, is that, according to its functional design, it is intended to serve as a mechanism for insuring price risks in conditions of unstable economic conditions. In this regard, the presence of this market allows business entities to eliminate or reduce financial risks. The attractiveness of the futures market also lies in the fact that its instruments are highly profitable investment objects for free financial resources. This is especially important in terms of a portfolio approach to investing.
Investments form the reproductive basis of the capital market, since the national economy of any country constantly requires a certain amount of investment resources (all types of property, financial and intellectual values).
From the economic point of view, pure (respectively, freed from the material reproduction process) money and capital markets are called financial markets. (The system of financial markets typically includes the stock market, the money market, the capital market, and the foreign exchange market.) These financial markets can be subdivided into:
To markets for the exchange of money (among them, first of all, it is necessary to single out markets for currency trading and transactions with bills, or currency markets);
credit markets;
Markets for insurance;
Markets with equity participation, among which it is necessary to single out exchanges for the purchase and sale of securities (stock exchanges);
Markets for exchanging credit terms (using the difference between the exchange rate and interest).
Transactions in the financial markets are carried out mainly by specialized financial institutions, i.e. banks and insurance companies that act as partners of the financial market in face-to-face contact with enterprises.
Thus, from the point of view of the economy as a whole, the market in which industry and trade, the state and local governments mobilize long-term capital, and forms the capital market. The money comes from private investors, insurance companies, pension funds and banks, and is usually redistributed by emission houses and commercial banks. Emission house - a financial institution, usually a trading (commercial) bank, which specializes in placing securities of private companies on the stock exchange. Stock exchanges are also part of the capital market, where they form the market for stocks and bonds, which, when issued, represent capital. It is the presence and development of capital markets that distinguish industrialized countries from developing countries and countries with economies in transition, in which the possibilities for mobilizing industrial and commercial capital are either absent or very limited.
The described architecture and mechanism of functioning of the main segments of the capital market in highly developed countries, their most important features in the course of the transition to a market economy are used in Belarus. Already in 1992-1994. Legislative and regulatory acts were adopted on the functioning of the currency mechanism on market principles, on the movement of capital in commodity and monetary forms. In January 1994, the National Bank of the Republic of Belarus adopted the “Regulations on the procedure for conducting foreign exchange transactions related to the movement of capital”. Thus, a mandatory (legal) regime was created for the entire set of foreign exchange transactions in the capital market (investments, export-import operations, loans and deposits, etc.).
The government and the National Bank of Belarus develop multifaceted relations with the loan capital market within the framework of conducting monetary policy, optimizing the ratio of regulation and deregulation of foreign exchange and credit markets, and implementing investment programs.
The general regulation of the capital market and the so-called "reasonable supervision" are also implemented through the adoption of legislative acts on the activities of banks and the issuance of securities. Through the National Bank, the Ministry of Finance and other institutions, the state establishes detailed rules for issuance and secondary circulation, permits new instruments and operations, issues licenses to participate in certain transactions, authorizes the opening of stock exchanges and other markets, establishes reporting forms and operational standards.
The regulation of the loan capital market (or the relaxation of restrictions and prohibitions) is associated with the desire of the state to influence macroeconomic processes, maintain the competitiveness of the national credit system, stimulate the development of competition, and bring national practices in line with international ones.
The functioning of the loan capital market is based on a special institutional mechanism. The technical and organizational basis is the National Bank, commercial banks, brokers and other institutions that are intermediaries in the movement of loan capital. At present, the institutional mechanism also includes stock exchanges, clearing centers, electronic operating systems, etc.
The capital market in the form of trade in industrial and technical products has been developing in the country since the late 1980s. XX century., Gradually develops the stock trade, or the circulation of equity capital, as corporatization and privatization. Of course, ten years is a short period for the maturation of such complex economic structures that took shape in the West over several centuries. Nevertheless, the formation took place. In the last four years, trading and clearing, settlement, depositary and technical infrastructures have been created to serve the currency and stock markets.
The most important problem at the present stage of development of the capital market is the lag of its volume and dynamics from the growth dynamics of the Belarusian economy, from the need to form domestic investment resources and their redistribution to the real sector of the economy. In order to create conditions for economic growth, market instruments should not so much serve primarily speculative transactions as ensure the transformation of savings into investments, while performing their main macroeconomic function. This will make it possible to create an effective investment and innovation development model in Belarus.
Ministry of Education of the Russian Federation
NOU VPO Saratov State Socio-Economic University
Department of General Economic Theory
Course work
The capital market and features of its development in the modern Russian economy
Performed: Student of the course of the BUKO group
Supervisor: Associate Professor of the Department
economic theory
Erofeev Ivan Ivanovich
Saratov 2008
Introduction…………………………………………………………………………...3
Chapter 1. Essence of the capital market………………………………………………...5
1.1. The concept of the capital market…………………………………………………..5
1.2. The process of primitive accumulation of capital……...….…….……13
1.3. The difference between the capital market and the markets for other factors of production…………………………………………………………...18
Chapter 2. Features of the capital market in Russia…………………………………22
Chapter 3. World capital market……………………………………………...27
3.1. Essence and structure of the world capital market……………….…27
3.2. Globalization of national capital markets, its causes and consequences…………….………………………………………………32
Conclusion………………………………………………………………………….37
List of used literature………………………………………………39
Introduction
The theme of this course work contributes to a deep understanding of the processes taking place in the economy. The creation and development of commercial firms - the main constituent units of a market economy - requires the acquisition of physical and intangible capital. This requires capital investment. However, since the owners of the firm usually do not have enough financial resources to organize the production of goods or services, there is a need for additional capital, which is attracted from the capital market.
In countries with developed market-type economic systems (such as the United States, the countries of Western Europe, Japan), the capital market has a rather complex structure that has been formed over many centuries. This structure is generated by the need to best reconcile the sometimes conflicting interests of the owners of savings and commercial firms wishing to receive these savings as an investment.
The concept of the capital market is closely related to the stock market. The stock market arises from the objective need to attract additional financial resources for an enterprise, corporation, state. At the same time, there are a number of persons (both legal entities and individuals) who have temporarily free cash. In the stock market there is a purchase and sale of funds.
The stock market plays a significant role in the system of market relations, which can be reduced to the following factors: attraction of free funds in the form of investments for the development of production; ensuring the flow of capital from declining industries to rapidly progressing industries; raising funds to cover the budget deficit; generation of indicators by which one can assess the state of the economy as a whole; impact on changes in inflation rates.
The current stage of development of the stock market began after the collapse of the USSR and is associated with ongoing economic reforms.
The stock market is an indispensable element of any market system. Russia had to create its own stock market virtually from scratch. Therefore, today the most important, perhaps, is the fact that in Russia there is a securities market with a developed infrastructure, technologically equipped at the modern level and almost in no way inferior in this sense to foreign counterparts.
In Russia, the formation of the capital market is just underway. Since every citizen of the country, by investing his savings, can be a participant in the economic process of generating funds in the capital market, there is a need to understand the basic concepts and categories of the capital market, its structure and forms. It is with this that the special relevance of this topic is connected.
This course work examines the essence and evolution of the capital market, its structure and functions, the problems of the functioning of the capital market in Russia, as well as the essence and structure of the global capital market. This work aims to analyze the features of the development of the modern capital market.
To achieve this goal, the following tasks were set in the work: to characterize the concept of "capital", to show its essence, to highlight the forms of capital, to show how the capital market operates, to consider the features of the Russian capital market and the world capital market, and to explore the globalization of world capital markets and its consequences.
Chapter 1. The essence of the capital market
1.1. The concept of the capital market
Before defining the concept of the capital market, it is necessary, in my opinion, to have an idea of what capital is.
Capital (originally - the main property, the main amount, from the Latin capitals - the main one) is one of the most important categories of economic science, an indispensable element of a market economy.
Capital has many meanings and can be interpreted as
A certain stock of material goods ("physical capital"),
As a sum of money, or "financial capital",
As something that includes not only material elements, such as knowledge, education, qualifications, human abilities used in the production of goods and services (“human capital”),
As an element of wealth that brings its owner a regular income over a long period of time (“discounted income stream”),
As a sum of rights to dispose of certain values, giving their owners income without investing the corresponding labor (“legal capital”).
All these views are united in one thing: capital is any resource of the economy created with the aim of producing more economic goods and capable of generating income.
The development of capitalist economic relations led to further research into the category of capital: the emergence of new concepts and interpretations. It is possible to single out different approaches to the definition of this category, but the largest number of supporters have two directions that characterize capital as a set of means of production (“real” concept) or as a sum of money (“monetary”) used in business transactions to generate income.
Due to the ambiguity of the interpretation of the category "capital", there is also the problem of defining the concept of "capital market". Depending on what is the object of the relationship between sellers and buyers in the market, we further distinguish two possible interpretations of this concept.
First. Capital in the market of production factors is understood as physical capital: machine tools, machines, buildings, structures, stocks of materials and semi-finished products, etc. in their value measurement. Therefore, in this case, the capital market is part of the market for factors of production.
Rice. 1. Capital in the factor market
The main subjects of the capital market are the sphere of business and the sphere of house-hold.
The demand for capital in the factor market is the demand of firms for physical capital, which allows firms to implement their investment projects, and in the form of presentation, it is the demand for investment funds that provide the necessary financial investments in the firm's investment projects. The demand for capital is only expressed as a demand for funds to acquire the necessary productive assets.
In the factor market, households holding capital in the form of invested cash lend capital to the business in the form of tangible assets and receive a return in the form of interest on the invested funds.
Due to the fact that physical capital can be acquired in the property of firms or provided to them for temporary use, it is necessary to distinguish between the payment for the flow of services of capital (use price) and the price of capital assets (sales price).
The cost of using capital services is a rental (rolling) valuation of capital. It can act as a market quotation or the amount paid by the firm to the owner of capital for the lease of part of this capital. The price of an asset is the price at which a unit of capital can be bought or sold at any time.
The second option - capital in the financial market is understood as money capital. Therefore, the capital market is one of the constituent parts of the loan capital market (Fig. 2). 
Rice. 2. Capital in the financial market
The loan capital market is a set of relationships where the object of the transaction is money capital and the demand and supply for it is formed. The loan capital market is subdivided into the money market and the capital market. The money market is associated with short-term banking operations for up to one year. The capital market serves the medium and long-term operations of banks. It, in turn, is divided into the mortgage market (operations with mortgage bonds) and the financial market (operations with securities). The subjects of the financial market are not only banks and their clients (as in the mortgage market), but also the stock exchange, and the object of operations are not only securities of private entrepreneurs, but also state institutions.
The money market and the capital market are secondary markets for loan capital. Each of them has its own toolkit, i.e. specific tradable financial assets, which differ in:
Status (share or bond);
Type of ownership (private or public);
Validity period;
Degrees of liquidity;
The nature of the risk (bankruptcy or market) and the degree of risk (risk, low-risk, risk-free).
The US capital market toolkit includes, for example:
Treasury bonds intended to finance the long-term policy of the US federal government;
Securities of state institutions, which are issued on the basis of a special permission of the government to finance various types of social programs through the financial system;
Municipal bonds issued by local governments;
Shares and bonds of corporations issued by private firms.
The capital market is often referred to as the investment fund market. Investments (capital investments) are understood as the costs of production and accumulation of means of production and an increase in material reserves, an increase in capital stocks in the economy.
Households are the providers of capital, while business firms are consumers. The interaction of suppliers and consumers is carried out through an extensive network of financial intermediaries: commercial banks, investment funds, brokerage houses, etc. Their function is to accumulate small household savings into huge amounts of financial resources and distribute them among capital consumers. The form of providing capital can be different: either direct, in the form of distribution of shares of new issues among subscribers, or borrowed, in the form of buying corporate bonds and providing direct loans to firms. The most important role in this process is played by the interest paid on the funds provided.
Unlike usurious capital, when the lender's own funds were the main source, loan capital is formed from financial resources, credit organizations from legal entities and individuals, as well as from the state.
Moreover, at the first stage of the development of credit relations, the only source of the formation of loan capital was temporarily free funds transferred on a voluntary basis to credit institutions for subsequent capitalization. This source has not lost its relevance even today, when temporarily free funds of the population constitute a significant part of the resource sources of credit institutions.
At the second stage of the development of credit relations, with the development of a non-cash form of payment with the direct participation of banks, funds temporarily released in the process of circulation of industrial and commercial capital became a new source of formation of loan capital. These include:
Amortization fund of enterprises for renewal, expansion and restoration of fixed assets;
Part of working capital in cash released in the process of selling products and making material costs:
Cash generated as a result of the gap between the receipt of money from the sale of goods and the payment of wages;
Profit going to the renewal and expansion of production.
These funds are accumulated on settlement accounts of legal entities in the credit institutions serving them. The particular attractiveness of this source of loan capital for the bank is determined by the absence of the need to:
Obtaining the consent of the owner of the current account for the bank to use the funds on the account;
Payments of income on current accounts, i.e. the actual free of charge for the bank of these resources.
Thus, for most modern banks, the considered sources act as the main resource and encourage banks to constantly increase the range of clients they serve.
The economic role of the loan capital market lies in its ability to combine small, disparate funds in the interests of all capitalist accumulation, which allows the market to actively influence the concentration of production and capital.
The loan capital market as one of the financial markets can be defined as a special area of financial relations associated with the process of ensuring the circulation of loan capital.
The main players in this market are:
Primary investors, i.e. owners of free financial resources, mobilized by banks under various conditions and converted into loan capital;
Specialized intermediaries represented by credit and banking institutions that directly raise funds and turn them into loan capital;
Borrowers - in the person of legal entities and individuals, as well as states experiencing a temporary lack of financial resources.
Based on the foregoing, the modern structure of the loan capital market is characterized by two main features:
Temporary;
institutional.
On a temporary basis, a distinction is made between the money market, in which short-term loans (up to one year) are provided, and the capital market, where medium-term (from 1 to 5 years) and long-term loans (from 5 years or more) are issued.
On an institutional basis, the modern loan capital market assumes the existence of a market (equity capital or securities market) and a debt capital market (credit and banking system). In addition, the securities market is divided into the primary market, where issues of securities are sold and bought, and the secondary (exchange) market, where previously issued securities are sold and bought. There is also an over-the-counter (street) securities market, where securities are sold that, for one reason or another, cannot be sold on the stock exchange.
Both signs of the loan capital market are characteristic of all developed countries, however, of course, the state of the national market is judged by the second (institutional) sign, in particular by the presence and degree of development of its two main tiers:
Credit and banking system;
Securities market.
The functions of the capital market are determined by its essence and the role that it performs in the system of public management.
There are five main functions of the loan capital market:
The first is servicing commodity circulation through credit;
The second is the accumulation of monetary savings of legal entities, individuals and the state, as well as foreign clients;
The third is the transformation of monetary funds directly into loan capital and its use in the form of capital investments to service the production process;
Fourth - serving the state and the population as sources of capital to cover government and consumer spending;
Fifth, the acceleration of the concentration and centralization of capital for the formation of powerful financial and industrial groups.
It should also be noted that:
First, the first three functions began to be actively used in industrialized countries only in the postwar period;
Secondly, in the first four functions, the market acts as a kind of intermediary in the movement of capital;
Thirdly, all functions are aimed at ensuring the effective functioning of the system of state-regulated economy.
1.2. The process of primitive accumulation of capital
The historical forms of the existence of capital from the time of the formation of commodity production were: merchant's capital (in the form of merchant's capital), historically the oldest free form of capital, usurious, and then industrial.
The parallel development of forms of capital and economic schools was the reason that the first researchers of this category, mercantilists and physiocrats, considered it one-sidedly. A more detailed analysis of the forms of capital is presented in the works of A. Smith and Ricardo.
The most complete and logically complete study of the category of capital was carried out by K. Marx in his work "Capital" (1867). Along with the consideration of specific forms of the functioning of capital, he also revealed the content of this category, analyzing it not only as a thing that is at rest, but also as a movement. In Capital, for the first time in the history of economic science, it was shown that capital is a special historically determined social relation between capitalists and wage-workers. But along with this, Marx noted that capital also has a material appearance, acting in the form of machine tools, machines, raw materials, etc.
The classics of economic theory singled out the initial accumulation of capital (“previos accumulation”) as the starting point for the formation of capitalism.
The primitive accumulation of capital is the process of destroying individual private property based on one's own labor, the process of separating the worker from ownership of the conditions of his labor, transforming, on the one hand, direct producers into ideal workers, and, on the other hand, social means of production and means of subsistence into capital. .
The time limits of this economic process in Western Europe cover the period from the 16th to the 18th centuries. (in Russia - the 17th-19th centuries), when each country, forming a capitalist economy, used its own economic and political techniques and methods aimed at developing the domestic market and the fastest formation of a material base (in the form of material wealth) for inclusion in the world competition in within the emerging global market. The rapid development of all forms of entrepreneurship during this period required certain economic and social conditions, as well as prerequisites.
The initial accumulation of capital was the necessary condition for the formation of the socio-economic base of entrepreneurship, which, releasing the "bound" factors of production (primarily labor, land and capital), contributed to the full manifestation of the entrepreneurial abilities of the emerging bourgeois class.
First, there was a release of "labor" and the formation of an army of hired workers. The most important condition for the development of capitalist production is the presence of a significant number of people deprived of working conditions and sources of subsistence, except for the sale of their labor power.
The economic basis of the process of primitive accumulation of capital was the mass expropriation of peasants and small artisans. The development of commodity-money relations intensified the economic differentiation of small producers; some of the small artisans and peasants went bankrupt. Significant influence on the formation of the working class in Western Europe in the XVI-XVIII centuries. the state rendered the publication of a number of laws that went down in history under the name of "bloody legislation against the expropriated." These laws were designed to force the expropriated producers to work for hire and subject them to capitalist labor discipline.
Secondly, there was a release of land as an economically free space within the country, as well as the seizure of territories outside its borders and their transformation into colonies. A classic example of this is the history of England, where the forced removal of peasants from the land by landlords by the method of fencing was used, as well as direct seizures of land in colonial possessions.
Thirdly, the development of all forms of capital went on at an accelerated pace: both commercial, and usurious, and industrial, including accumulation both in the form of money and in the form of means of production.
The first steps in the formation of the industrial bourgeoisie were associated with the development of property differentiation among artisans. The wealthiest guild masters and merchants-buyers, who emerged as entrepreneurs, increasingly employed the hired labor of ruined small producers. However, the development of the world market required a more intensive rate of capital accumulation, and the apparatus of state power was widely used to carry out this task. The process of primitive accumulation of capital was accelerated by colonial wars and predatory robbery of the population of captured colonies, the growth of public debts and tax collections.
To cover budget deficits, the state had to place large loans among the owners of money capital. This allowed the bourgeoisie, acting as a creditor of the state, to regularly appropriate the significant interest paid on government obligations. The development of state credit gave impetus to securities trading and stock trading.
The system of protectionism served as an important means of primitive accumulation of capital. Foreign trade policy was based on the introduction of high import duties, designed to limit the import of goods from other countries, and the payment of premiums for the export of industrial products from the country. In a number of countries (for example, in England in the 17th century), a direct ban was introduced on the export of important types of industrial raw materials from the country; Entrepreneurs who started the organization of new industries, the initial capital flowed directly from the treasury in the form of large cash subsidies.
The initial accumulation of capital was prepared by the development of productive forces, the growth of commodity-money relations, and the formation of sufficiently broad national markets.
The unity of the basic patterns of the primitive accumulation of capital in different countries does not exclude the diversity of specific forms of its manifestation. In Russia, for example, the development of primitive capital accumulation processes was hampered by the long domination of the feudal-serf system, which restrained the economic release of such factors of production as labor and land.
The transitional period experienced by Russia has often been identified with the process of primitive accumulation of capital. However, there is no complete overlap between these processes. Russia was going through a period associated with the rejection of the command-administrative system based on directive pricing and centralized distribution of resources, and the transition to market methods of regulation. This is the fundamental difference between the process of primitive accumulation of capital in the former sense of the word.
What unites them is the process of creating a class of entrepreneurs on a new material basis in the form of private property. There are both internal and external sources for this.
The internal ones include, first of all, privatization, which leads to the division of state property by the following methods:
Redistribution of funds between heavy industries (including the military-industrial complex) and light industry in favor of the latter;
The concentration of capital in the service sector and in trade;
- "self-occupation" of the functions of disposing of land and natural resources - by enterprises of the fuel and energy complex and other energy producers;
Transfer to elite enterprises and their owners of the rights to dispose of a part of their products for the purpose of its barter exchange;
Receipt by foreign trade firms of profits arising from the liberalization of foreign trade;
Receiving income from "shuttle" imports;
Obtaining tax incentives provided by the state to certain organizations for the import of alcoholic beverages and tobacco products into the country;
Corruption, racketeering, shadow economy, etc.
External sources include the inflow of loans from abroad.
The significance of the primitive accumulation of capital lies in the fact that during this process, entrepreneurs get free access to all factors of production, which take the form of a commodity, which allows them to realize their entrepreneurial abilities.
1.3. The difference between the capital market and the markets for other factors of production
Production is such a sphere of economic activity of people in which economic resources are directly spent to obtain the necessary benefits. The resources involved in the production of goods and services are called factors of production.
The market for factors of production is a special kind of markets in the system of a market economy. Unlike the market for finished goods and services, where firms are sellers and consumers are buyers, in the factor markets, firms act as buyers of labor, natural resources, land, and capital.
Capital is one of the key economic categories. It was noted earlier that capital is a factor of production, represented by all the means of production that are created by people in order to produce other goods and services with their help. These include tools, equipment, buildings, structures, the latest technologies and developments, software products, etc.
Thus, the most important distinguishing feature of capital from land is that the factor of production in question is a resource created by people. While land, by its origin, is a natural factor, and not a product of human labor, therefore it cannot be moved, freely transferred from one branch of production to another, from one enterprise to another, i.e. she is motionless.
The essence of capital is the advanced value, which, as a result of the exploitation of wage labor, brings surplus value.
There are many different forms of capital:
Physical (technical) capital - a set of material resources that are used in various phases of production and increase the productivity of human labor (machines, buildings, computers, etc.);
Financial (monetary) capital - a set of monetary resources and the monetary value of securities;
Legal capital - a set of rights to dispose of certain values, and these rights give their owners income without investing the corresponding labor;
Human capital is those investments that increase the physical or mental capacity of a person.
In the process of production, the various elements of physical capital behave differently. One part functions for a long time (buildings, machines) and is called fixed capital, the other is used once (raw materials, materials) and is called working capital.
Fixed capital, unlike circulating capital, not only functions for a longer time, but also has a high cost. This creates within the enterprise the corresponding financial problems associated with the renewal and acquisition of fixed assets. Since the value of fixed assets is transferred to the newly created product in parts and for a long time in quantities equal to the depreciation of the corresponding equipment in the form of depreciation, the problem of investing in new equipment is a special and complex issue in the development of production. This complexity is expressed in the fact that various kinds of new capital investments can be made either at the expense of internal savings (savings) or at the expense of external borrowing.
Working capital participates in the production cycle only once and fully transfers its value to the created products. An important feature is that its elements are easily transformed into cash, quickly and without much difficulty change their commodity form to cash and vice versa. Money is used to purchase raw materials, materials and other components of working capital for subsequent processing and manufacturing of finished products, after the sale of which money is returned to the enterprise again.
Fixed capital, embodied in the means of labor, wears out as it is used. Economists distinguish between physical and moral depreciation.
Physical wear takes place, firstly, under the influence of the production process itself and, secondly, under the influence of the forces of nature (metal corrosion, concrete destruction, loss of elasticity or flexibility of plastic, etc.). The longer the operating time of fixed capital, the greater the physical depreciation.
Obsolescence (obsolescence) is a decrease in the useful properties of fixed capital in the eyes of users compared to what is offered in return. Obsolescence is of two types. The first type is associated with the production of cheaper machines, equipment, vehicles, etc. The second type is associated with the production of more advanced machines. In this case, entrepreneurs also incur losses by continuing to use obsolete machinery or equipment.
In contrast to the capital factor, land used in agriculture, with rational exploitation, not only does not wear out, but also improves its productivity, it has an unlimited service life and is not reproduced at will.
An essential feature of the commodity labor also lies in its usefulness after the beginning of use. It is not destroyed when used, but, on the contrary, creates or participates in the creation of benefits, continuing to generate income during the entire time of the worker's activity.
Common to all forms of capital is their monetary value. All economic benefits of production value, expressed in monetary value, acquire the form of a capital asset circulating on the market. The price of capital assets is the income that they are able to bring as a result of their production use.
The generalized expression of return on capital is the interest rate, i.e. such amount of income, which is calculated in a certain period of time as a percentage of the amount of capital employed. Calculating income or determining the estimated value of the net productivity of capital is called discounting. Its essence lies in the fact that the investor always has an alternative to investing money in a bank at interest or investing in another project. The main thing is that the purpose of production, in which capital participates, is to make a profit.
Summing up this paragraph, it can be noted that one of the main features of the capital market is that any firm and any consumer can act in this market both as a creditor and as a borrower. First, all firms and consumers use this "resource" in their activities (and therefore may need it). Secondly, this "resource" does not require production (therefore, any firm or consumer can have money, regardless of the type of its activity).
Chapter 2. Features of the capital market in Russia
No state can exist without the development of the capital market. Even those countries where the public sector accounts for a larger share of the gross domestic product than in Russia, such as France, need a dynamic capital market that provides an opportunity to finance the private sector of the economy.
Most of the Russian economy has been privatized. Russians own assets: for example, Russia ranks first in the world in terms of the proportion of housing that is privately owned. Many Russians have significant savings. However, institutions and structures that can turn the wheels of the capitalist economy and ensure the productive use of available wealth hardly exist.
Political uncertainty and economic instability have taught Russians to care about the future at best, but nothing more. Investments that can benefit the country's economy are considered at best as too risky, and at worst as "thrown to the wind." As a result, tens of billions of dollars, deposited in the accounts of foreign banks or under mattresses in the homes of Russians, finance the development of any kind of economy - the United States, Europe or Cyprus, but not the Russian economy.
There is a lack of a clear, coherent and agreed strategy for the development of the capital market, in accordance with which it would be possible to prioritize and plan actions, as well as determine the degree of progress. The voices of politicians, economists and market participants continue to be heard calling for a strategy to attract capital to the real sector, but among them there is no one who would have a clear idea of how to develop and apply such a strategy.
A complex, burdensome, and unfair tax system, inappropriate accounting system, and bureaucracy combine to create a strong aversion among businesses to disclosing any information about themselves. Lack of transparency reinforces corruption, which can be easily masked.
Weak enforcement of laws and arbitrary, non-uniform application of them is due partly to flaws in lawmaking, partly to a lack of accountability, and partly to a weak level of development of regulatory and judicial bodies, whose resources are insufficient to ensure their effective work, maintain independence and competence.
The absence of a real banking system, consisting in the implementation of settlement and payment functions and the provision of loans, not only hinders the attraction of short-term savings, but also, together with the shortcomings of the tax system, perpetuates the practice of non-monetary mutual settlements and lending between enterprises.
In Russia, the decade of the formation of a civilized capital market took place in difficult conditions. The historically strong state, which previously intervened in all manifestations of economic activity, liberalized the capital market dramatically, and then began to reap the bitter fruits of liberalization. This trend was determined by the holding in 1992-1993. unprepared reforms in the monetary sphere, reduced to government directives regarding the "liberalization" of prices, the actual chaos in the monetary sphere, the hasty exchange of the depreciated mass of old money for new ones.
The reformation excitement, mainly in the monetary sphere, was practically reduced to the launch of a mechanism for the withdrawal of national capital in its various forms for decades, not only from the reproductive sphere, but also from the national economy as a whole. As a result, a start was given to the development of trends that contradict the conditions of a developed market and the economic interests of the country. One of the consequences of this was the peculiarities of state regulation of the Russian capital market that have been preserved to this day.
The first of these features is that the priority direction of state regulation of the capital market is the regulation of its monetary, loan segment. This is important to recognize, since for a decade monetary policy has been oriented towards the implementation of the monetary rate in the mode of following the guidelines for the underdeveloped countries, despite the clearly negative macroeconomic consequences.
The second feature of state regulation of the capital market in Russia is the growing dependence of financial and monetary policy on the current situation and trends in the real sector. The approved Concept of National Security states that "without large investments in the strategic spheres of the economy, the economic revival of Russia is impossible."
Another national feature of state regulation of the capital market is dependence on external financial obligations. This dependency, coupled with a frustrated domestic borrowing relationship, has given rise to a "syndrome of doom" of financial and monetary policy to make decisions and actions based on the scale of debt financial obligations and the low level of investment potential.
The fourth feature of the state policy in the capital market is the lack of coordination in the development of interdependent sectors and the continuity of changes. The special susceptibility of the monetary sphere to changes in the economy - the endless "restructuring" and periodic "liberalization" with the constant reform of the credit and financial system - contributed to the growth of the multiplier effect, uncertainty, and unpredictability in all areas of the economy.
The underdevelopment of viable domestic capital markets and the failure to mobilize household savings limit the government's ability to manage the economy effectively and leave the financial system to the mercy of unsustainable foreign investment activity.
The first and most important principle for dealing with problems in the capital market in Russia is that at the government level it is necessary to recognize the following:
In order to improve people's lives, everything possible should be done to stimulate the development of viable enterprises that can operate independently and pay their bills without the favors and subsidies from the state, which are currently hurting the budget;
These enterprises cannot start working effectively, paying exorbitant taxes and experiencing the arbitrariness of the authorities: it is necessary to develop high-quality legislation, as well as a fair taxation system;
These enterprises will have to attract money for their own development, and if the latter are not attracted on the Russian market, then they will be attracted abroad, and foreigners will receive profits, which will not contribute to the speedy recovery of Russia;
Organizations with savings will not participate in the financing of enterprises if they consider that they may become victims of arbitrariness or a heavy tax burden: the rights of investors should be protected, as well as tax incentives should be provided to them;
Citizens and organizations that have funds and trust in the financial system will invest money through long-term investment institutions, which, in turn, will be able to reduce the budget deficit problem by purchasing government securities;
Money cannot work effectively and reliably if there are no functioning capital markets in Russia. Markets are not capable of surviving in conditions of arbitrariness.
The second principle is that a comprehensive program of measures should be adopted to promote the development of capital markets. Applying one part of the measures and ignoring the other will not lead to success.
The third principle is that capital markets do not appear by decree. The government can only create the right climate for markets to develop and then step back to allow businesses and market participants to complete the process.
The fourth principle is that the policy of developing capital markets should be long-term, the sequence of measures should be thoughtful and consistent.
Summing up, it can be noted that the defining feature of state regulation of the capital market in Russia is the lack of a long-term strategy, high dependence on the needs of the current moment, the use of simultaneously incompatible Keynesian and monetary recommendations, as well as the inconsistency of individual areas and links of economic policy.
Chapter 3. World capital market
3.1. Essence and structure of the world capital market
The world capital market is an integral part of the world economy, which plays an increasingly important role at the international level. From a functional point of view, international capital is a complex economic mechanism, a system of market relations that ensures the accumulation and redistribution of financial resources between countries and regions.
By broad definition, the global capital market is a combination of national capital markets, international organizations and international financial centers of the world. By a narrow definition, these are only those financial resources that are used in international economic relations, i.e. relations between residents and non-residents.
World capital markets are a set of financial and credit organizations that, as intermediaries, redistribute financial assets between creditors and borrowers, sellers and buyers of financial resources.
World capital markets can be viewed from different angles. From a functional point of view, it can be divided into such markets as foreign exchange, credit, derivatives, insurance services, shares. These markets, in turn, are subdivided into even narrower ones, for example, the credit market - into the market for long-term securities and the market for bank loans.
The structure of world capital markets can be represented as follows:
Rice. 4. Structure of world capital markets
From the point of view of the terms of circulation of financial assets, the world capital markets can be divided into two parts: the money market (short-term) and the capital market (long-term). In the foreign exchange market, the derivatives market, the insurance services market, mainly short-term transactions are made (for a period of up to 1 year inclusive). A lot of long-term operations (for a period of more than 1 year) are carried out in the credit market. The stock market and part of the credit market, namely the debt securities market, are combined into one market - the stock market (securities market), although it sometimes means only the stock market.
The main market institutions are:
banking companies. At the first stage of economic development, commercial banks dominate. At the middle and higher levels of development, the importance of specialized intermediaries and securities markets is growing. The process of internationalization of the credit and financial infrastructure has led to the creation of banking syndicates for one-time sales and distribution of bonds of industrial companies. As the terms of loans extended, groups of large banks in various countries began to create stable consortiums to provide medium and long-term loans. International associations of the largest banks were formed to jointly provide their clients with all types of banking services.
A state that acts in the form of central and local authorities, the treasury or other authorized institutions and can act as a creditor, borrower or play the role of guarantor and surety for external obligations of individuals.
For the implementation of state insurance of export credits in many countries, special institutions were created and later reorganized. In some cases they are state organizations, in others they are semi-state organizations, and in others they are private companies operating on behalf of and at the expense of the government. In most industrialized countries, exports are credited by the private banking system. The practice of state lending to foreign trade operations is spreading everywhere and, above all, through the activities of state and semi-state foreign trade banks.
Interstate banks and foreign exchange funds. The Bank for International Settlements (BIS) monitors the state of the European market and ensures the regulation of foreign exchange and credit relations throughout the world.
Transnational corporations (TNCs) are major subjects of international credit relations. They have gigantic intra-corporate savings and self-finance more than half of their resource needs. However, TNCs are constantly in need of funds to service the growing production and marketing of products. TNCs use all types of markets - national, foreign and international European market. TNCs use global capital markets not only to obtain loans to service current payments or long-term investments, but also to place their monetary and financial claims in the most profitable way.
The main agents of world capital markets are transnational banks, transnational companies and so-called institutional investors. But a significant role is played by both government agencies and international organizations that place or provide their loans abroad. Individuals also operate on world capital markets, but mostly indirectly, mainly through institutional investors.
Transnational corporations have become the most active participant in the global capital market, operating in all its individual markets. Thus, being the main exporters and importers of goods and services in the world, TNCs (they account for 1/3 of world trade) have become major clients in the global foreign exchange market and the derivatives market. Although commercial banks conduct transactions in these markets also in their own interests, nevertheless, the bulk of foreign exchange transactions are carried out by them on behalf of their clients, primarily TNCs.
But TNCs have the greatest impact on the global credit market and the global equity market. In the global credit market, they not only actively use eurodollars as borrowers, but also actively increase their reserves, being the most prominent owners of eurodollar deposits. As for the global stock market, in fact, most of the "blue chips", i.e. the leading companies on the stock exchanges are TNCs. By selling their shares on foreign stock exchanges, issuing their Eurobonds on Euromarkets and resorting to Eurocredits, TNCs can finance a significant part of their capital investments from these sources.
Transnational corporations carry out their capital investments mainly for long-term purposes. Although they often quickly transfer huge financial assets from one region of the globe to another, which can destabilize financial markets in certain regions, we must not forget that the basis of TNCs is direct investment in multi-year projects. Therefore, the activities of TNCs can be assessed primarily as contributing to the stabilization of the world capital market. After all, these are large companies that need a stable business environment, including financial.
3.2. Globalization of national capital markets, its causes and consequences
Financial resources are the most globalized economic resource in the world. This is evidenced by the huge turnover in some segments of the global capital market, primarily in the foreign exchange market and the derivatives market, as well as the ever-increasing presence of non-residents in the credit and equity markets. The reasons for the increasing globalization of national capital markets are numerous, but the most important are the following:
Capital is the most mobile of all economic resources, so the process of globalization of the world economy and its acceleration at the end of the 20th century affected, first of all, the capital markets.
Liberalization of economic life in the world, i.е. a process that has begun to gain momentum in developed countries in the last three decades, and in developing and post-socialist states in the last two or three decades. As a result, in the capital markets of developed countries there are almost no restrictions on the participation of non-residents in their activities and on the operations of residents with foreign assets. In emerging markets, these restrictions are partially maintained, partially relaxed, partially abolished. An example would be Russia, where by the end of the 90s. For residents, most of the restrictions on the so-called current foreign exchange transactions were lifted (mainly payments for the export and import of goods and services, obtaining and providing loans and credits for a period of less than six months, transfers of a non-commercial nature - wages, inheritances, as well as transfers to non-residents of profits and other similar transactions), as well as restrictions on foreign exchange transactions related to the movement of capital (they can be performed with the permission of the Bank of Russia, and when Russian individuals purchase real estate abroad - without such permission).
Widespread introduction of modern means of communication and informatization, which not only revolutionize the infrastructure of national capital markets, but also expand the possibilities of interaction between them.
The globalization of national capital markets generates both positive and negative consequences.
Positive consequences include:
Mitigation of the lack of financial resources in the world. In modern conditions, especially in developed and some rich developing countries, capital in the form of money is no longer a scarce resource;
Strengthening competition in national capital markets and thereby reducing the price of credit and financial services, increasing their quality.
The negative consequences of globalization include the following:
Increasing instability of national capital markets, especially emerging ones. This happens, firstly, due to the fact that financial crises in certain regions, especially in those where large international financial centers are located, have a stronger impact on other countries and regions. Secondly, the liberalization of national capital markets makes them more accessible to cosmopolitan capital, which is unstable by nature, especially short-term capital, and often simply speculative;
The power of influence of national governments on national capital markets weakens as these markets liberalize. At the same time, the influence of TNCs, international institutional investors and international speculators on these markets is increasing in all countries. For the markets of countries participating in integration associations, the significance of the adopted common decisions or, in general, their common financial policy is enhanced. In most developing and post-socialist countries, the impact on their capital markets of the policies of international organizations, primarily the International Monetary Fund and the World Bank, is growing;
The growing dependence of the world economy on financial (cash) rather than real capital (in the form of capital goods and inventories). This process, which began long ago in developed countries, is increasingly spreading to the world economy. Its essence lies in the fact that in the relationship of money and real capital, the first becomes less and less dependent on the second and, moreover, money capital begins to predominate in their relationship. As a result, the national economy is increasingly dependent on the state of its finances. In the context of globalization, the state of national capital markets is increasingly influenced by the behavior of non-residents, as well as the state of capital markets in other countries and regions of the world, and the state of affairs in international financial centers.
While the importance of international financial speculation is often exaggerated, it is nevertheless often felt on world capital markets in an increasingly globalized world. In financial practice, speculative operations are those whose participants hope to profit from changes in macroeconomic financial indicators - the exchange rate, loan interest, stock prices, etc.
Undoubtedly, international financial transactions are speculative, not only pursuing the goal of profiting from a possible change in financial indicators, but also directly seeking to change these indicators - to lower the exchange rate, lower share prices, in order to then buy these cheaper shares at a more favorable exchange rate. Dozens and even hundreds of billions of dollars can be mobilized for such operations. However, such targeted speculative operations usually succeed when other investors unwittingly join them, concerned about possible changes in financial performance. As a result, the process started by speculators acquires an avalanche-like character, panic begins in the financial market.
A good example of such operations is the current situation in the global economy. The issue of the global financial crisis worries everyone. Economists' forecasts are contradictory, but their points of view agree on one thing - the 2008 crisis will be global in nature for the entire world community.
What is the cause of the global economic crisis? And the reason is simple. Mortgage fever has taken over the world. Everyone wanted everything at once. Ordinary citizens, housing, construction companies and banks profit. Everyone profited from each other. Banks on firms, firms on citizens. Only they did not take into account one thing, it will not be possible to sell an infinite number of apartments, because the demographic level is declining faster than new buildings are rising. As a result, people do not buy apartments, enterprises become bankrupt, they cannot return loans to banks, as a result of which banks also become bankrupt. And if the bank is bankrupt, then the people who kept the money there become bankrupt. When banks of national importance collapse, the economy is significantly undermined, and the people working there lose their earnings. Well, unemployment is a problem of national importance.
The global economic crisis started in the US and engulfed the whole world, because all countries are dependent on each other. And the USA is the country with the most stable economy, its market is the most predictable, and when a commotion occurs in such a market, what to speak of other markets that are supported thanks to it.
America has always had large foreign exchange reserves and willingly shared them, despite its huge debt. All loans are essentially overseas loans. Many of our banks are “owned” by American partner banks. The money they borrow is their money. Hence the exorbitantly high interest rates. And now, at the time of the crisis, they need this money more than ever to somehow save themselves.
Thus, the irresponsible behavior of investors who took on huge credit debts in order to “rip off” huge profits on mortgages and securities, as well as collateral of dubious quality, became the causes of the global crisis and led to the creation of conditions that do not bode well for the world. economy. The desire to enrich the few becomes the cause of the bankruptcy of the entire world community, mainly due to a completely unregulated economy that allowed unlimited destructive behavior of society.
Conclusion
Capital is a complex phenomenon that has several forms of manifestation in the process of its functioning. Initially, capital is a thing, money, value, which is directed to the area of economic activity, i.e. are invested. Therefore, capital appears in the form of an advanced value. However, the value is advanced for the purpose of making a profit, in connection with which the capital becomes a value that ensures the receipt of surplus value.
In the process of its movement, capital performs various functions: creating conditions for production (money capital), organizing and managing production in order to obtain a value that exceeds the value advanced (productive capital), selling the goods produced and their value (trading capital).
An important role in the economic life of society is played by loan capital, which, on the one hand, is associated with the accumulation of free financial resources, and on the other hand, the possibility of obtaining financial resources for the development of economic activity. These relations are called credit relations, which are characterized by the following features: repayment, urgency, payment, warranty.
Another converted form of capital is fictitious capital, represented by securities and having acquired an independent movement in parallel with the real capital which it is intended to represent. Securities earn income in the form of dividends and interest. They are sold and bought. Securities have nominal and real value. The nominal price is the amount indicated on the security. The real value depends on its market price. Ceteris paribus, the market price of a share (share price) is directly dependent on the size of the dividend and inversely on the interest rate.
Securities are divided into titles of ownership (shares) and debt obligations (bonds, bills, notes). A share is a security that testifies to the introduction of a certain share in the capital of a joint-stock company and gives the right to receive a dividend. Shares are ordinary and preferred. Debt obligations express credit relations.
In the capital market, the balance between the investment demand for money and their supply (savings) is of great importance. Any income after taxes is divided into consumption and savings. Therefore, we can talk about the propensity to consume and the propensity to save. The propensity to save increases as interest rates on deposits rise. As for the investment demand for money, it is the greater, the lower the interest rate on loans. Thus, the regulating equilibrium price in the capital market is the interest rate, which is always compared with the expected rate of return of the investor.
The capital market includes the securities market and the market for medium and long-term bank loans.
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Mikhailov D.M. – World financial market: development trends and instruments. – M.: Exam, 2007.
Federal Agency for Science and Education of the Russian Federation
Saratov State Social and Economic
University
Department of General Economic Theory
Course work
According to economic theory
On the topic: "The capital market and features of its development in the modern Russian economy"
Completed:
student of the 5th group
3 UEF courses
Last name: Pupkin
Name Vasily
Middle name: Gennadievich
Supervisor:
Somova Anastasia Andreevna (Associate Professor)
Saratov 2006
Table of contents:
Introduction1.) The evolution of the capital market
2.) Capital market and its structure
2.1 Fixed capital (fixed assets)
2.2 Depreciation rate
3.) Features of the development of the capital market in modern Russia
Conclusion
Bibliography
Introduction
Capital- one of the key economic categories. And the situation with real capital in Russia in general has been one of the most pressing issues of the Russian economy for more than a dozen years. On what indicators are we most of all lagging behind the economies of developed countries? Among others, it is based on the state of real assets. In which sector of the Russian economy is there a chronic lack of investment? In the sector of real capital. Analysts are constantly sounding the alarm: the imbalance between increasing investments in the financial market, the securities market and significant underfunding of the real sector of the economy ultimately leads to the degradation of industries, the insecurity of securities with real values.
But it is precisely the timely and sufficient re-equipment of production that is the guarantor of long-term growth in productivity, profitability and reduction in production costs. The guarantor of the competitiveness of products both in the domestic and foreign markets. It is the focus on the intensive development of the economy with the use of advanced technologies that is the way to improve the situation on the real capital market. Currently, Russia is called a "raw material colony" in relation to developed countries due to the fact that we export raw materials and import high-tech end products. At this stage of economic development, it is more profitable for us than to produce a product within the country. And why? Because the technologies are imperfect, the equipment is outdated, the depth of oil refining is 40-45%, and abroad it reaches 96%.
So, the real capital market today is perhaps the key issue of the Russian economy. A market that requires significant investment, development and implementation of R&D. Of course, in the context of the current financial crisis, ambitious plans for a total modernization of most firms and state-owned enterprises will have to be postponed. However, the crisis is a temporary phenomenon, and in 2-3 years, according to forecasts, the situation will stabilize. This means that we will return to the old problems: should we still lag behind the level of developed countries by 50 years, or should we accelerate development and catch up? (as Brazil, India and China are doing successfully).
The subject of this work has long been of interest to economists, now both the views of the classics and the points of view of modern economists and analysts are well known.
The purpose of the course work is to show the evolution of ideas about "capital", the evolution and current state of the real capital market in Russia.
To do this, you need to set the following tasks:
- The main theories of capital, as understood by various economic schools and teachings,
Modern ideas about the capital market and its structure,
Demand and supply in the market of capital services, loan capital, capital goods,
The evolution of the capital market in Russia, current trends and recommendations for improving the situation.
1. Evolution of the capital market
Capital(originally - the main property, the main amount, from the Latin capitals- main) is one of the most important categories of economic science, an indispensable element of a market economy 1 .
The historical forms of the existence of capital from the time of the formation of commodity production were: merchant's capital (in the form of merchant's capital), historically the oldest free form of capital, usurious, and then industrial.
The parallel development of forms of capital and economic schools was the reason that the first researchers of this category - mercantilists and physiocrats - considered it one-sidedly. A more detailed analysis of the forms of capital is presented in the works of A. Smith and D. Ricardo.
The most complete and logically complete study of the category of capital was carried out by K. Marx in his work "Capital" (1867). Along with the consideration of specific forms of the functioning of capital, he also revealed the content of this category, analyzing it not only as a thing that is at rest, but also as a movement. In Capital, for the first time in the history of economic science, it was shown that capital is a special historically determined social relation between capitalists and wage-workers. But along with this, Marx noted that capital also has a material appearance, acting in the form of machine tools, machines, raw materials, etc.
The classics of economic theory singled out the initial accumulation of capital (“previos accumulation”) as the starting point for the formation of capitalism.
initial accumulation of capital is the process of destroying individual private property based on one's own labor, the process of separating the worker from ownership of the conditions of his labor, transforming, on the one hand, the direct producers into ideal workers, and, on the other hand, the social means of production and the means of subsistence into capital.
The time limits of this economic process in Western Europe cover the period from the 16th to the 18th centuries. (in Russia - XVII-XIX centuries), when each country, forming a capitalist economy, used its own economic and political techniques and methods aimed at developing the domestic market and the fastest formation of a material base (in the form of material wealth) for inclusion in the world competition in within the emerging global market. The rapid development of all forms of entrepreneurship during this period required certain economic and social conditions, as well as prerequisites.
The initial accumulation of capital was the necessary condition for the formation of the socio-economic base of entrepreneurship, which, releasing the "bound" factors of production (primarily labor, land and capital), contributed to the full manifestation of the entrepreneurial abilities of the emerging bourgeois class.
First of all, there was a release of "labor" and the formation of an army of hired workers. The most important condition for the development of capitalist production is the presence of a significant number of people deprived of working conditions and sources of subsistence, except for the sale of their labor power.
The economic basis of the process of primitive accumulation of capital was the mass expropriation of peasants and small artisans. The development of commodity-money relations intensified the economic differentiation of small producers; some of the small artisans and peasants went bankrupt. Significant influence on the formation of the working class in Western Europe in the XVI-XVIII centuries. the state rendered the publication of a number of laws that went down in history under the name of "bloody legislation against the expropriated." These laws were designed to force the expropriated producers to work for hire and subject them to capitalist labor discipline.
Secondly, there was a release of land as an economically free space within the country, as well as the seizure of territories outside its borders and their transformation into colonies. A classic example of this is the history of England, where the forced removal of peasants from the land by landlords by the method of fencing was used, as well as direct seizures of land in colonial possessions.
Thirdly, All forms of capital were developing at an accelerated pace - both commercial, usurious, and industrial, including accumulation both in the form of money and in the form of means of production.
The first steps in the formation of the industrial bourgeoisie were associated with the development of property differentiation among artisans. The wealthiest guild masters and merchants-buyers, who emerged as entrepreneurs, increasingly employed the hired labor of ruined small producers. However, the development of the world market required a more intensive rate of capital accumulation, and the apparatus of state power was widely used to carry out this task. The process of primitive accumulation of capital was accelerated by colonial wars and predatory robbery of the population of captured colonies, the growth of public debts and tax collections.
To cover budget deficits, the state had to place large loans among the owners of money capital. This allowed the bourgeoisie, acting as a creditor of the state, to regularly appropriate the significant interest paid on government obligations. The development of state credit gave impetus to securities trading and stock trading.
The system of protectionism served as an important means of primitive accumulation of capital. Foreign trade policy was based on the introduction of high import duties, designed to limit the import of goods from other countries, and the payment of premiums for the export of industrial products from the country. In a number of countries (for example, in England in the 17th century), a direct ban was introduced on the export of important types of industrial raw materials from the country; Entrepreneurs who started the organization of new industries, the initial capital flowed directly from the treasury in the form of large cash subsidies.
The initial accumulation of capital was prepared by the development of productive forces, the growth of commodity-money relations, and the formation of sufficiently broad national markets.
The unity of the basic patterns of the primitive accumulation of capital in different countries does not exclude the diversity of specific forms of its manifestation. In Russia, for example, the development of primitive capital accumulation processes was hampered by the long domination of the feudal-serf system, which restrained the economic release of such factors of production as labor and land.
The transitional period that Russia is now experiencing is often identified with the process of primitive accumulation of capital. However, there is no complete overlap between these processes. Modern Russia is going through a period associated with the rejection of the command-administrative system based on directive pricing and centralized distribution of resources, and the transition to market methods of regulation. This is the fundamental difference between the process of primitive accumulation of capital in the former sense of the word.
What unites them is the process of creating a class of entrepreneurs on a new material basis in the form of private property. There are both internal and external sources for this.
The internal ones include, first of all, privatization, which leads to the division of state property by the following methods:
- redistribution of funds between heavy industries (including the military-industrial complex) and light industry in favor of the latter;
concentration of capital in services and trade;
"self-occupation" of the functions of disposing of land and natural resources by enterprises of the fuel and energy complex and other energy producers;
transferring to elite enterprises and their owners the rights to dispose of a part of their products for the purpose of its barter exchange;
receipt by foreign trade firms of profits arising from the liberalization of foreign trade;
receiving income from "shuttle" imports;
obtaining tax benefits provided by the state to certain organizations for the import of alcohol and tobacco products into the country;
corruption, racketeering, shadow economy, etc.
2. Capital market and its structure
Allocate physical (real) and fictitious capital.
Fictitious capital is a special form of application of loan capital. It is represented in securities, which makes an independent movement, different from real capital, and regularly brings income to its owners in the form of a dividend or a percentage.
Real capital is divided into stock (what is at a given point in time) and investment (considered for a certain period). Also, real capital is divided into capital itself (for example, a machine tool) and capital services (for example, machine services). On this basis, the following segments of the capital market are distinguished:
- capital goods market. This is the purchase and sale of production assets
Capital services market. Production assets can be leased, products can be produced on them.
Loan capital market (money for funds)
- money capital
productive capital
commodity capital
The circulation of capital is such a movement of capital in which, passing through various stages, it returns to the form with which it began its movement. Moreover, in the process of continuous renewal and repetition of circuits, capital at any given moment is simultaneously in all forms, thus symbolizing the unity of the process of production and circulation. The circuit of capital is called its movement, covering successively its advance payment, use in production, sale of the produced commodity and return to its original form.
This way of movement of industrial capital takes place in any society, regardless of its socio-economic arrangement. Capitalism, socialism, developing countries - none of that matters. The difference lies in the ways in which labor is combined with the means of production and in the appropriation and use of the final effect of the movement of capital - profit. Money capital ( D) is advanced by the capitalist for the acquisition of means of production ( sp) and labor force ( Rs), which, connecting in the production process ( P), continue to interact until the release of finished products ( T). By selling a commodity, the capitalist receives its value in money form ( D) the initially advanced amount of capital returns to its owner, but has already increased by a decisive amount 2 .
The capital circulation formula takes the form of an endless spiral (D - money, T - goods, P c - labor power, C p - means of production, P - production):
In this formula, each form of capital (monetary, productive, commodity) corresponds to its own circulation formula. The round bracket covers the general (it is also monetary) formula for the circulation of capital. The square bracket symbolizes the circulation of productive capital, and the curly bracket symbolizes the circulation of commodity capital. 3
The turnover time of capital is the sum of the time of production and the time of circulation. The time of production includes the working period, interruptions in the production process and the stay of capital in production reserves.
The time of circulation covers the period of sale and purchase of goods; it depends on the remoteness of sales markets, the development of the transport system, the state of the market, the degree of competition, and its saturation with goods. The circulation time includes the time the finished product is in the warehouse; the time of its transportation to the consumer; time of sale of finished products; the time of acquisition of stocks of means of production. Thus, it covers the process of marketing finished products and acquiring new means of production.
The rate of capital turnover depends on many factors: the structure of the productive capital itself, the length of the working period in production, the condition of vehicles and highways, the completeness and rhythm in the operation of equipment and machinery, the organization of trade, etc.
Depending on the rate of turnover and the method of transferring value to the finished product, productive capital is divided into fixed and circulating capital. The difference between fixed and working capital was carried out by A. Smith. In his opinion, fixed capital is one that produces profit, while remaining the property of the one who owns it; circulating capital is a good that ceases to be the property of its owner. So, working cattle is a fixed capital, but if it is sold on the market, it turns into working capital. Thus, A. Smith understood circulating capital as commodity, or trading, capital.
D. Ricardo's division of capital into fixed and circulating capital was based on a different principle. He carried out this division depending on the degree of durability of capital. However, unlike A. Smith, D. Ricardo excluded the costs of raw materials and materials from working capital and actually identified working capital with the costs of purchasing labor.
2.1 Fixed capital (fixed assets)
Fixed capital in physical form is represented by buildings, machines, structures, i.e. all those durable capital goods that lose their value as they wear out over several production cycles.
Fixed capital is characterized by depreciation - depreciation as a result of wear and tear. To compensate for the fixed capital worn out over the entire service life, a depreciation fund is created, where funds (depreciation deductions) are received after the sale of finished products. Depreciation deductions are intended to restore working capacity or completely replace the means of labor with other means of labor and are equal to the value of the transferred value of the means of labor within one year.
The means of labor participate in each production process completely, but transfer their value to the products produced in parts. Therefore, we can say that the fixed capital is that part of the value of the advanced capital which is spent on the acquisition of means of labor and is reimbursed in installments.
The amount of annual depreciation deductions depends on the depreciation rate for a particular type of equipment, established by law. The importance of the size of depreciation deductions for an entrepreneur lies in the fact that these deductions are not included in the taxable base.
2.2 Depreciation rate
The ratio of the amount of depreciation to the cost of fixed capital, expressed as a percentage, is the depreciation rate. The depreciation rate is calculated by the formula
A" \u003d A / K main * 100%;
where A" is the depreciation rate, expressed as a percentage; A is the amount of depreciation for one year; K main is the initial cost of fixed capital.
2.3 Depreciation schemes
There are various depreciation schemes:
- the straight-line depreciation method, where the depreciation expense is the same amount over the life of the capital good;
accelerated depreciation method (the depreciation rate is set by the state at a high level and allows you to form a depreciation fund 3-4 times faster);
declining balance method, when depreciation deductions are calculated as the ratio of the same depreciation rate (for example, 10%), but not to the initial cost of the machine, but to its residual value for each year. For example, in Year 1, 10% of $1000 will be deducted. In Year 2, 10% of the reduced cost of the machine (i.e., from $900) will be deducted, etc.
Fixed capital, by its economic nature, is constantly renewable capital. Restoration of the value of means of labor is carried out as they wear out. Allocate physical and moral depreciation of fixed capital.
The physical depreciation of fixed capital means the loss of its usefulness (use value) by the means of labor. This wear can be of two types. First, the means of labor wear out in the course of their productive application(breakdown of machines, destruction of factory buildings from vibration, etc.). Secondly, they lose their properties under the influence atmospheric conditions(heat, cold, water), even if the equipment is idle.
Moral (value) depreciation is the loss of its value by fixed capital, regardless of the degree of physical depreciation. Obsolescence is caused by two circumstances. Firstly, when mechanical engineering creates cheaper technical means, as a result of which there is a depreciation of old, existing equipment. Secondly, when old machines are replaced by more productive ones (they produce more output in the same time), as a result of which the functioning fixed capital depreciates. Although the new generation of similar machines differs from the old one in higher quality and, accordingly, higher cost, but per unit of utility, new machines are cheaper than the old ones. Thus, the obsolescence of machines is the loss of their value caused by technological progress.
Under the conditions of modern scientific and technological progress and competition, the aging of fixed capital has accelerated.
2.5 Working capital (working capital)
Along with fixed capital, working capital also functions, which is spent on hiring labor and purchasing objects of labor (raw materials, materials, semi-finished products, components), which in the production process fully transfer their value to finished products (are included in its cost). Working capital loses its value during one production cycle and is represented by raw materials, materials, stocks of finished products, etc.
Working capital is characterized by the following indicators:
- Capital turnover rate:
where t is the time of capital turnover; A - depreciation deductions for fixed capital within one year (12 months); K av - advanced capital; To about - reimbursed working capital for one year (12 months).
- Number of turnovers of capital per year:
where P- the number of turnovers of capital in one year (12 months); t is the time of capital turnover, expressed either in years or in months; T - year (12 months).
By accelerating the turnover of capital, regardless of which area of activity it is advanced, the entrepreneur seeks to minimize the deadening of resources and funds and to receive increasing profits on the advanced value. Accelerating the turnover of capital is tantamount to increasing the amount of advanced capital or obtaining an equal profit on a smaller amount of advanced capital compared to competitors. At the same time, it must be remembered that in different industries and areas of economic activity, the rate of capital turnover can differ significantly due to specific production conditions, features of technological processes and differences in the methods of promoting products from producer to consumer.
Physical capital is associated with the concept devious, or indirect(round about) production methods. These are production methods associated with time lag. In other words, it takes time to create a capital good. During this time the product will not be produced, the lost income from the sale of this product must be borrowed at interest, and then, when a more perfect means of production has been created, repay the debt at the expense of increased productivity.
etc.................
The transition to building a market economy in the early 90s. called for the formation of a loan capital market in the Russian Federation in accordance with the Western model, which provides for two main tiers.
In the transition from a loan fund to the formation of a loan capital market, there were separate elements of the latter: a credit system, state insurance institutions, and a securities market in the form of a limited issue of winning state loans.
However, it is too early to talk about the creation of a full-blooded loan capital market in the Russian Federation. So far, we are talking about the presence and strengthening of a number of market elements, which include the formation of a two-tier banking system, the gradual development of specialized credit institutions and the functioning of the securities market in the form of a number of stock exchanges.
But this is not enough to bring the market of the Russian Federation closer to the markets of Western countries. The lag is explained primarily by the absence of a full-fledged market for the means of production and a real estate market, the existence of which is possible only on the basis of widespread privatization, corporatization of a large part of state property. In addition, a labor market and its mobile migration are needed, as well as a land market. All these are necessary conditions for the expansion of the securities market, and, consequently, the further development of new financial institutions, the strengthening of the two links of the loan capital market, and ensuring the supply and demand for money capital. All these markets need money, which is provided by the loan capital market.
Therefore, the main directions in the formation of the Russian loan capital market should be:
– high savings rate in the country;
– wide-scale privatization associated with the organization of the corporate securities market;
– creation and worldwide guarantee of the government securities market
- liquidation of the monopoly of Sberbank as practically the only bank dealing with the population's money;
– creation of an effective parabanking system in the country;
- Adoption of a law on private ownership of land and the inclusion of land in the financial circulation.
Essence, functions and forms of credit
Credit is the movement of loan capital, i.e. money capital, which is loaned out on terms of repayment for a certain percentage.
Everything that relates to the functioning of the loan capital market also applies to credit. In scientific terms, it can be emphasized that theorists often understand a loan as a relationship that arises between business entities regarding the provision of funds for a loan (for temporary use), in practical terms, a loan is primarily a highly profitable asset formed by a bank by providing funds to a borrower on the basis of a loan agreement.
In any national economy, credit performs the following functions:
- distributive;
- emission;
- control.
distribution function- distribution of funds on a returnable basis. It is implemented in the process of providing funds to enterprises and organizations on the terms of repayment and payment.
The emission function is the creation of credit means of circulation and replacement of cash. It manifests itself in the fact that means of payment are created in the process of lending, i.e. Along with cash, non-cash money is included in circulation.
Control function - control over the efficiency of economic entities. It manifests itself in the comprehensive control of the economic activity of the entity that received the loan.
Bank lending to legal entities is carried out in strict compliance with the principles of lending, which are the basis, the main element of the lending system. The principles of lending reflect the essence and content of the loan, as well as the requirements of the basic laws in the field of credit relations.
There are five basic principles of lending:
- urgency;
- return;
- payment;
- differentiation;
- security of loans.
Lending urgency means that the loan must be repaid within a strictly defined period. The urgency of lending is a necessary condition for the repayment of the loan. The loan period specified in the agreement is the maximum time for the borrower to hold funds. Violation of the term distorts the essence of the loan, it loses its true purpose.
recurrence means that after the end of the loan period, the funds must be returned. Credit as an economic category differs from other categories of commodity-money relations in that the movement of money here takes place on a repayment basis.
Loan payment means that the borrower must pay the bank a certain fee for the temporary use of funds borrowed from the bank. In practice, this principle is implemented using the bank interest mechanism.
Bank interest is the payment received by the lender from the borrower for the use of borrowed funds.
The interest rate depends on the following factors:
– demand for a loan from legal entities and individuals;
- the rate paid by the bank to its customers on deposit accounts of various types;
– term of the loan, i.e. the higher the term of the loan, the higher the risk, and consequently, the amount of the loan interest;
- the degree of security of the loan, i.e. the lower the security of the loan, the higher the interest rate;
- the level of inflation in the country and the stability of monetary circulation.
The real value of the loan interest is established in practice, taking into account the totality of all the above factors.
Differentiation of lending means that banks should not have the same approach to resolving the issue of issuing a loan to customers applying for it. Based on the preliminary work carried out to assess the creditworthiness of prospective borrowers, the bank selects the most reliable from among them and only with them carries out further work on concluding a loan agreement.
security loans as a principle of lending means that the borrower's property, valuables and guarantees allow the lender to be sure that the return of the funds issued will be carried out on time. To ensure the timely repayment of the loan, lenders under the agreement appoint a pledge, guarantee or bank guarantee, as well as obligations in other forms provided for by law.
Loan security is one of the most reliable ways to reduce the risk of loan default.
There are two types of loans: secured and unsecured.
Unsecured (blank) loans are issued to first-class borrowers (ie, well-established) and, contrary to popular belief, the largest loans are provided by banks without collateral. Collateral does not guarantee repayment of the loan, does not reduce the risk, because. in the event of liquidation of the enterprise, the bank becomes a preferred creditor. The loan agreement must specify the method of securing the repayment of the loan.
A wide variety of assets and documents can be used as collateral for a loan and can be easily traded: real estate, warehouse receipts, accounts receivable, buildings and equipment, bills of lading with endorsements, oil shipments, corporate shares, etc.
In a broad sense, credit money already means credit relations. In a market economy, they are constantly developing both vertically, by improving state credit, and horizontally, through commercial, banking and other forms of credit.
Basic forms of loan security
Loan classification is carried out according to such basic features as the nature of the loaned value, the categories of creditors and borrowers, the form of provision, and the directions of borrowers' needs.
There are two main forms of credit on the market: commercial and banking. They differ from each other in the composition of participants, the object of loans, the dynamics, the amount of interest and the scope of operation.
commercial loan means that the lender is not a credit institution, but the loan is provided in the course of a commercial transaction, therefore it is also called a commercial one. A loan can be provided by any entity that has temporarily free cash at its disposal.
Commercial credit is one of the first forms of credit relations in the economy, which gave rise to bill circulation and thereby actively contributed to the development of non-cash money circulation, finding a practical expression of financial and economic relations between legal entities in the form of sales of products or services by deferred payment. The main purpose of this form of credit is to accelerate the process of selling goods and, consequently, extracting the profit embedded in them.
The commercial loan instrument is traditionally bill of exchange, expressing the financial obligations of the borrower in relation to the lender. The most widely used are two forms of a bill - a simple bill containing a direct obligation of the borrower to pay a fixed amount directly to the creditor, and a transferable (draft), representing a written order to the borrower from the lender to pay the specified amount to a third party or to the bearer of the bill. In modern conditions, the function of a bill is often taken over by a standard agreement between the supplier and the consumer, which regulates the procedure for paying for products sold on the terms of a commercial loan. A commercial loan is fundamentally different from a bank loan:
The role of the creditor is not specialized financial institutions, but any legal entities associated with the production or sale of goods or services;
Provided exclusively in commodity form;
Loan capital is integrated with industrial or commercial capital, which in modern conditions has found practical expression in the creation of financial companies, holdings and other similar structures, including enterprises of various specializations and activities;
The average cost of a commercial loan is always lower than the average bank interest rate for a given period of time;
When the transaction is legally executed between the lender and the borrower, the fee for this loan is included in the price of the goods, and is not determined specifically, for example, through a fixed percentage of the base amount.
The interest on a commercial loan, which is included in the price of the goods and the amount of the bill, is usually lower than on a bank loan. The size of a commercial loan is limited by the amount of reserve capital available to industrial and trading companies. The boundaries of a commercial loan are determined by the purposes, directions of its use, terms of provision, size.
In foreign practice, commercial credit is extremely widespread. For example, in Italy, up to 85% of the amount of transactions in wholesale trade is carried out on the terms of a commercial loan, and the average period for it is about 60 days, which significantly exceeds the period of actual sale of goods to direct consumers. In Russia, this form of lending has until recently been limited to the scope of circulation. In other sectors, such factors as high inflation rates, the crisis of non-payments, unreliable partnerships, and shortcomings in specific law objectively impeded its spread.
In modern conditions, in practice, there are mainly three types of commercial loans:
A loan with a fixed repayment period;
A loan with a return only after the actual sale by the borrower of the goods delivered in installments;
Lending on an open account, when the delivery of the next batch of goods on the terms of a commercial loan is carried out until the debt on the previous delivery is repaid.
Bank loan provided by banks and other financial institutions licensed by the Central Bank of the Russian Federation to conduct this type of operations. legal entities (industrial, transport, trading companies), the population, the state, foreign clients in the form of cash loans.
The banking form of the loan has the following features:
The bank, as a rule, operates not so much with its own capital as with attracted resources;
The bank lends idle capital;
The bank lends not just cash, but money as capital.
The price for using bank loans is loan interest, determined on a mutually beneficial basis between the subjects of credit relations and fixed in the loan agreement.
A bank loan exceeds the boundaries of a commercial loan in terms of direction, timing, and size. It has a wider scope. A significant replacement of a commercial bill with a bank one makes this loan more elastic, expands its scale, and increases security. The dynamics of bank and commercial loans is also different. Thus, the volume of commercial credit depends on the growth and decline of production and trade. The demand for a bank loan is mainly determined by the state of debts in various sectors of the economy. A bank loan has a dual character: it can act as a loan of capital for functioning enterprises, or as a means of payment for the payment of debts.
A bank loan is classified according to a number of criteria:
1. Delivery method
a) cash, non-cash,
b) refinancing,
c) remodeling
d) bill of exchange.
2 Loan currency(in national, in the currency of the creditor, in the currency of third countries).
3. Number of participants(bilateral, multilateral transactions).
4. Purpose of the bank loan:
a) to increase the capital stock,
b) for temporary replenishment of negotiable transactions,
c) on a consumer basis, including mortgage loans.
5. Giving technique:
a) one-time (provided in one amount),
b) limited (overdraft and credit line). The credit line involves the use of borrowed funds within the established limit. Overdraft - crediting the client's current account from the bank's funds (usually up to 20-30% of the average monthly turnover on the client's current account) to eliminate a temporary shortage of working capital for the company to make current payments.
6. Security criterion secured, unsecured. Collateral - any liquid property, more often - the borrower's real estate. If he violates the terms of the loan, the collateral is withdrawn to pay off debts.
7. Maturity. Short-term (no more than 1 year), medium-term (from 1 to 3 years) and long-term (more than 3 years).
8. Repayment methods.
a) in one amount at the end of the term,
b) in installments
c) in unequal shares, as a rule, during the term of the loan.
9. By type of interest rate- fixed and floating.
10. Methods of charging interest.
a) % is paid at the time of total repayment (in a market economy),
b) equal installments of the borrower during the entire period,
c) % is withheld at the time of the immediate issuance of a loan to the borrower.
As the credit system develops and expands, the growth rate of bank credit increases.
Currently, there are several forms of bank loans.
