Issuance of money is important financial instrument used in the economy of each country. The concept is always heard, but many people still do not fully understand what exactly is hidden behind this word. You need a clear explanation of what is the issue of money in simple terms.
Money emission is the introduction into use of citizens and enterprises of new cash and non-cash money, why the volume used in the country Money increases. Emission is often confused with the ordinary issuance of money, which takes place all the time. However, with the release of an increase money supply not happening. This process involves not only the inclusion of a printing press and the issuance of fresh banknotes and coins for public use. There are three more types of funds available:
The issue of money in the Russian Federation is carried out by the state, and only it has a monopoly on the issuance paper money. The Central Bank performs this task and manages the emission process. As soon as a decision is made to replenish the money supply, the Central Bank begins collecting data on how much cash flows through banks, determines which areas need an injection of funds, and the final volume. After that, the emission mechanism starts.
The Central Bank is also the author of the design of new banknotes, looking for new ways to increase their service life and complicate the work of those who try to counterfeit them. The organization tightly controls the process of stuffing money and further distributes it among the regions of the Russian Federation. forward a large number of cash to remote regions is difficult and costly. Cash settlement centers located in different regions of the country help with this. They already keep in their reserves a certain amount of financial resources that are not used and are not considered money until an order is received from the Central Bank to put them into circulation.
Banknotes are printed in special printing houses, where they are made especially protected from forgery. Coins are minted at the Moscow and St. Petersburg mints.
Emission policy in Russia is based on a number of principles. Here are the most basic ones:
The issue of money is made only by the Central Bank and has strict legal regulation. All decisions relating to the issue must be made strictly in accordance with the law and at the level of the board of directors of the Central Bank.
Three main varieties have been listed above. Each of them should be given special attention and analyzed in more detail.
The required amount of cash is put into circulation - paper banknotes. In this case it actually starts printing press and new, crispy banknotes are born. However, this does not always happen. The issue of cash in the Russian Federation is carried out by the Central Bank with the help of the RCC - cash settlement centers located in different regions and serving local banks. The required amount of money thrown in depends on how much finance the banks need, and often changes, so it is not advisable to carry cash from the center all the time.
For the issue of paper money, the RCC has its own cash reserves. As soon as the region has a need, by decree of the Central Bank, reserve banknotes sent to the general public.
The cash desk of the RCC receives cash daily. As soon as the amount of funds received begins to exceed the amount issued, part of the money is withdrawn and again sent to the bins.
This is the replenishment of bank accounts with monetary resources. Non-cash money is put into circulation when banks issue loans to people. At the same time, other citizens return the borrowed money by bringing cash to banks. Non-cash emission is necessary to satisfy the need of people and enterprises for additional finance. Banks do this, but only strictly within the framework of their accumulated capital.
Not only the state, but also ordinary enterprises and joint-stock companies can issue securities. A number of securities are introduced into the market, which can be purchased at free prices, depending on the position of the company. Thus, additional finances are attracted, this is done according to certain rules and strict supervision of the state. The issue of securities is divided into two types:
The decision to issue is made by the shareholders or the board of directors. The process itself takes place according to certain legislation and goes through the following stages:
After the issue of securities, they are placed with their first holders - this is how the primary market appears. If after that they are resold, then a secondary market is formed.
We are talking about credit and deposit multiplication. Not only the Pulp and Paper Mill participates in the non-cash issue, but also ordinary banks. They constantly use their excess reserves, and the more the bank has accumulated, the more it can put into circulation additional finance. A bank can only lend to people as much money as it has in its excess reserve.
The bank issues a loan to the client, and he uses the funds for payments, transferring them to another bank. Thus, the excess funds of the first bank decreased, and the second increased. The second bank now has more opportunities for lending, issues a loan to the next client, and he carries them to the third bank and increases its reserves. If we take the banking system as a whole, then as a result of this, there is a constant and continuous expansion of deposits of different banks, which is called credit and deposit multiplication.
The issue is carried out with the aim of stimulating and stabilizing the economy, and at first glance it seems that the process should increase the purchasing power of citizens and lead to economic growth. After all, there is more money, which means that everyone should feel good. Nevertheless, it is important to understand what the issue of money leads to, because this process often has negative consequences and can cause a number of economic and social problems.
The more money in circulation, the less their value. If you go too far with emission, a new problem will break out - inflation. Prices are rising, and the purchasing power of citizens with a fixed salary falls, because now you can buy much fewer goods and services with this salary. At the same time, the incomes of entrepreneurs selling essential goods are growing unreasonably. This leads to disruption balance of payments. Thus, by no means can it be said that the issuance of money is the most effective method of reducing inflation.
Money emission is an integral tool that is regularly used in the economy of each country. Nevertheless, its use requires a competent approach and careful preparation, since the emission process can easily lead to inflation, even greater destabilization economic situation in the country and many social problems. Successful emission is possible only with its moderation, as well as a competent economic policy and the presence of a stable growth in production in the country.
Every trader should know the basic macroeconomic concepts in order to understand the main trends taking place in the markets, it is easy to operate with terms during their professional activities and when managing personal capital. One of the key elements of the financial sector of the economy is the issue of money. The issue of money is the release of cash, non-cash money, which increases the money supply in the country. This task is entrusted to the central bank and the treasury. Money production is carried out continuously, but the amount of working capital in the country remains the same, since cash is handed over to banks at the same time as issuance. The issue of money is not just the production of coins, banknotes, but an increase in the money supply in the state.
The right to issue banknotes belongs to the Central Bank. According to Russian legislation no other organization has the authority to produce money. Such a system contributes to precise control and effective management of the formation of the M0 financial aggregate - banknotes circulating at a time outside banks. The issue of money is a factor that has a huge impact on the development of the country's economy.
Emission in Russia is based on the following principles:
The issue of money is a process controlled by the Central Bank. central bank determines the volume of issue and conducts an even distribution of funds among the constituent entities of the Russian Federation. Cash and non-cash transfers between bank accounts are in constant motion between entities and banks. The printing of banknotes and minting of coins is carried out at the mints in St. Petersburg and Moscow. The same enterprises produce badges, medals, orders. Banknotes are printed at special printing houses, where securities and other important documents are issued at the same time, requiring an increased degree of protection against fraud. The size of the issue is determined by the requests of banks. The latter form their needs based on the demand from citizens and organizations that are their clients. The issue of funds is entrusted to the Central Bank, cash settlement centers located in various regions of the state.
In Russia there was banking system, in which the issue is made according to the multiplier principle. This scheme of work assumes that the amount of money on deposits grows in the course of their movement between commercial banks. The main purpose of non-cash emission is to provide business entities with working capital.
Among the main functions of the Central Bank of Russia is the issuance of borrowed funds to private banks. In this case, credits are credited to the recipient's correspondent account. When the debt is repaid, the funds are returned to the Central Bank of Russia. Loans are issued at the refinancing rate. The growth of the money supply is also carried out through the purchase foreign exchange. Non-cash funds can be created not only by the Central Bank, but by private organizations by issuing loans. The distribution of funds is carried out under the control of the Central Bank of Russia. The size of transfers between banks is limited by the amount of funds in the correspondent account of the borrower.
Additional emission of money is a way to increase demand and a measure of stabilization policy. A negative consequence of the additional issuance of funds is an increase in the inflation rate and an increase in prices. An additional issue of money is resorted to in case of an acute shortage state budget. The growth of the money supply does not have a positive effect on the economy. A particularly negative impact of emission is observed during a period of stagflation in the economy. One of the indicators of the development of the country's economy is the exchange rate. The logical result of the excessive issue of money is a fall in the exchange rate local currency, since in this case the money supply increases, and the value of money decreases.
Knowing the basics of money production in Russia will allow you to navigate macroeconomic indicators, track the news that is happening in the economy of the country and the world, correctly form long-term forecasts direction of trends in assets, effectively manage personal finances.
Emission is such a release of money into circulation, which leads to a general increase in the money supply in circulation. Issue is cash and non-cash.
The following principles of issuing cash are in force in Russia:
The principle of optional security (there is no official ratio between the ruble and gold or other precious metals);
The principle of monopoly and uniqueness (the issue of cash, the organization of their circulation and withdrawal on the territory of Russia are carried out exclusively by the Bank of Russia);
The principle of unconditional obligation (the ruble is the only legal tender in Russia);
The principle of unlimited exchangeability (no restrictions on amounts or subjects of exchange are allowed; when exchanging banknotes and coins for new banknotes, the period for their withdrawal from circulation cannot be less than one year and more than five years);
The principle of legal regulation (the decision to issue money into circulation and withdraw it from circulation is made by the Board of Directors of the Bank of Russia).
If only the state issues cash, then non-cash money can also be created by commercial banks, issuing loans. The process of creating money is called credit expansion or credit multiplication (see article Bank Multiplier)
Issue of securities- the sequence of actions of the issuer on the placement of emissive securities established by law.
The standard issue of securities involves the following steps:
In some cases, the procedure for issuing securities may differ from the standard one. So, for example, when establishing a joint-stock company or reorganizing legal entities, carried out in the form of a merger, separation, separation and transformation, the procedure for issuing securities is as follows:
Securities are issued by issuers for one of the following purposes:
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Money issue- the issuance of money into circulation, leading to the process of increasing the monetary base. Right to D.e. in the country is assigned to the Central Bank ... Economic and Mathematical Dictionary
money issue- Issuance of money into circulation, leading to the process of increasing the monetary base. Right to D.e. in the country is assigned to the Central Bank. Topics economics EN monetary emission … Technical Translator's Handbook
MONEY EMISSION- production and issuance of the monetary unit of the state. In accordance with the Constitution of the Russian Federation (Article 75), the issue of money is carried out exclusively by the Central Bank of the Russian Federation. The issue of other money in the Russian Federation is not allowed. (FROM … Encyclopedic Dictionary of Constitutional Law
Money issue is the procedure for issuing money into circulation. The monopoly right to issue money belongs to the Central Bank of the Russian Federation (Bank of Russia). The Bank of Russia is obliged to issue into circulation only rubles in the form of banking ... ... Big Law Dictionary
Fiduciary money issue- FIDUCIARY ISSUE A government-sanctioned issue of money not backed by gold. In the 19th century, the main money issues were provided by gold reserves, and people could exchange banknotes for gold on demand. Currently… … Dictionary-reference book on economics
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Ruble. The issue of money is carried out exclusively by the Central Bank of the Russian Federation. The introduction and issue of other money in the Russian Federation is not allowed. See also: Currency in the Russian Federation Russian Federation Financial vocabulary Finam ... Financial vocabulary
monetary policy- one of the directions economic policy states, impact on economic processes by expanding or contracting the monetary base and the supply of money, that is, the money supply (or money supply), for example, by ... ... Economic and Mathematical Dictionary More electronic book
Bokova I.V., Dyadichko S.P., Krymova I.P., Musina L.A., Reznik I.A.
Finance and credit: A short course of lectures. - Orenburg: GOU OGU, 2004 - 185 p.
Issue of non-cash money
Emission is the release of money into circulation, which leads to an increase in the money supply in circulation.
The amount of money in circulation is defined as the sum of cash and bank deposits.
By providing loans commercial banks increase the money supply.
The Central Bank limits or expands with the help of monetary policy the ability of a commercial bank to issue credit money, depending on how much money supply is considered necessary at the moment.
Under the reserves of a commercial bank, is understood the amount of money available to immediately meet the requirements of depositors.
The ratio of the amount of reserves to the amount of deposits is called the reserve ratio (reserve rate).
The ability of banks to influence the size of the money supply circulating in the economy is regulated by the Central Bank through the system of required reserves , and provide for the deposit credit institutions in the Central Bank of a certain part of the funds raised. The Central Bank obliges banks to deposit part of the funds attracted by it, the Central Bank thereby limits credit opportunities bank, regulates the overall liquidity of the banking system. By changing the reserve ratio, the Central Bank is able to maintain at a certain level the amount of money in circulation in the country.
Under the free (excess) reserves of a commercial bank is understood the totality of resources that at a given time can be used for active operations.
Example: The amount of funds raised is 1000 rubles;
Required reserve ratio 10%;
Free reserves of KB -900 rubles.
The value of the free reserve of an individual CB is the sum of the capital of the CB; borrowed funds: centralized loan provided by the Bank of Russia to CB; interbank loan minus deductions to the Central Bank, and the resources of the bank itself. The ability of a bank to "create money" depends on the amount of required reserves established by the law of the country. The lower the amount of required reserves, the more money the banking system can create. The system of CBs using the mechanism of bank deposits can increase the money supply. To assess the ability of banks to increase the money supply within certain limits, the concept of a money (banking) multiplier is introduced.
money multiplier - this is the coefficient of increase (multiplication) of money in the deposit accounts of the CB during the period of their movement from one bank to another.
Km = 1/N vol. res. ,(2)
where Km - multiplication factor;
N about. res. - the required reserve ratio.
The multiplication factor can also be expressed as the ratio of the money supply formed in deposit accounts to the value of the initial deposit.
Rice. How the money multiplier works
For the sake of simplicity, the presented model has the following assumptions:
- each bank has only two clients;
- banks use their resources only for credit operations;
- the required reserve ratio set by the central bank is 20%.
Suppose that enterprise 1 needs a loan to pay for the supplies of enterprise 2. Commercial bank 1, which serves enterprise 1, turns to the central bank, and receives from it a centralized loan in the amount of 100 million rubles. As a result, bank 1 forms a reserve, at the expense of which a loan is issued to enterprise 1.
Enterprise 1 from its account pays for the supply of goods to enterprise 2, which has a current account in commercial bank 2. The attracted resources of bank 2 increase, and in accordance with the conditions of our example, they become equal to 100 million rubles.
Part of the sum of 100 million rubles, namely 20 million rubles, which ended up in a commercial bank, in accordance with the required reserve ratio of 20%, is transferred to the centralized reserve, the remaining part (80 million rubles) is free reserve, and is used by the bank to provide a loan, for example, to enterprise 3 in the amount of 80 million rubles.
Enterprise 3 pays for the goods and services provided to it with enterprise 4, which is serviced by commercial bank 3. Now this bank has a reserve, and it disappears from commercial bank 2.
Commercial bank 3rd part of the received reserve in the amount of 16 million rubles. (20% of 80 million rubles) deducts to the centralized reserve, and the rest - 64 million rubles. bank 3 uses to issue a loan to the next enterprise.
This process can continue until the free reserves of commercial banks and enterprises are completely exhausted. Required reserves are accumulated in the central bank and reach the size of the initial free reserve of 100 million rubles, i.e. the amount of credit to a commercial bank 1.
However, the money in the settlement accounts of enterprises 2, 4, etc. (of all even enterprises) remain intact, so the amount of money in settlement (deposit) accounts will be many times greater than the initial loan issued to enterprise 1. In our example, money in deposit accounts can increase by a maximum of 5 times. This is due to the fact that the multiplication factor is inversely proportional to the rate of deductions to the centralized reserve. In the example above, the reserve requirement is 20%, so the multiplier is 5:
Km = (1/20) * I00 = 5. (http://works.doklad.ru/view/RlnUeY7ljBU/2.html)
The essence of the multiplier is that in the first commercial bank, which received the money issued by the Central Bank, a free reserve is formed. It is reflected as a balance on the main correspondent account. This reserve can be called "primary deposit", used to issue loans. Due to loans, money is transferred to another commercial Bank, where a free reserve (“secondary deposit”) is also formed, within this reserve loans are issued, from the money of which a free reserve is formed in the third bank (“third deposit”), then in the fourth, etc. In the process of lending carried out by commercial banks, increases, i.e. is multiplied, the amount of money originally issued by the central bank in non-cash form commercial banking system .
However, the multiplication factor will never reach maximum value, because always part of the free reserve is used for other credit operations(In accordance with the established cash limit of any enterprise and the bank must have cash for cash transactions.)
The animation process is continuous
, so the multiplication factor is calculated for a certain period of time (for example: a year). The Central Bank performs the function of monetary regulation, management of the multiplier mechanism, thereby expanding and narrowing the issuing capabilities of banks
Issue of cash
The issue of cash is a release into circulation, in which the total amount of cash increases. (Figure 5)
The monopoly of cash issuance belongs to the Central Bank. Based on the cash turnover of the CB and the analytical reporting, the Central Bank predicts the size of the proposed issue. It is necessary not only to determine the size of the proposed issue, but also in which regions it should be carried out. The need for money is constantly changing. The issue of cash is always decentralized. The need for money is constantly changing. The issue of cash is carried out by the Central Bank and its regional RCCs (settlement and cash centers), which contain reserve funds and revolving cash desks.
The reserve funds of the RCC store a stock of banknotes intended for their release into circulation in case of an increase in the needs of the economy this region in cash. These banknotes are not considered money in circulation. They do not move, do not accumulate in the form of a treasure, do not serve as a means of payment, therefore they are reserve.
The cash desk constantly receives money and cash from the CB is issued from it. The money in the cash desk is in constant motion, they are considered money in circulation.
If the amount of cash receipts to the account exceeds the established limit for this RCC, then the money is withdrawn to the reserve fund. When the CB needs cash, the reverse process occurs. From the CB's account, within the limit of its free reserve, the RCC is obliged to service the CB free of charge.
For example, CBs have a need for cash, and the receipt of money in their operating cash desks is equivalently not increasing. In this case, the RCC is forced to increase the issuance of cash into circulation. To do this, the RCC requests permission from the Central Bank of the Russian Federation, and upon receipt of it, transfers cash from reserve fund to the cash register. For the RCC, this will be an issuing operation.
But in one RCC there may be an increase in the amount of cash, and in the other, on the contrary, there will be a withdrawal from the circulation cash desk. Therefore, the Board of the Central Bank draws up a daily balance based on information from the RCC network, where the issue of cash took place, where the withdrawal. 
Figure 5 - Cash flow
NOTE 1.
The most common is the opinion that both the central bank and commercial banks take part in the process of non-cash emission:
if the central bank does not provide additional cash to commercial banks to maintain the circulation of cash and increase reserves, non-cash issuance of commercial banks will be severely limited or completely stopped. In this way, the basis of the non-cash issue of the banking system is the increase in the monetary base central bank countries. The central bank can increase the volume of the monetary base by providing loans to commercial banks and the government (purchasing various kinds of securities), as well as by purchasing foreign currency or gold (i.e.active bank operations
changing the balance sheet asset).
By carrying out these operations, the central bank increases its assets. Accordingly, its liabilities increase - cash in circulation and reserves of commercial banks.
.
When in the process of carrying out these operations there is an increase in the liabilities of the central bank, its resources, which it can use for active operations, increase accordingly.
Similarly, the main sources of cash flow into the economy are:
. central bank lending to commercial banks;
. the purchase by the central bank of government securities;
. purchase of foreign currency and gold by the central bank.
It can be seen from the simplified balance sheet of the central bank (see Table 2.1) that, in addition to the volume of active operations of the central bank, the value of the item "Cash in circulation" is also influenced by the structure of the monetary base. The larger the reserves of commercial banks, the smaller, other things being equal, the issue of banknotes.
Ensuring the issue of banknotes. So, the channels for issuing cash are active operations central bank. Direct emission occurs as a result of an increase in the liabilities of the balance sheet of the central bank, therefore, the assets of the central bank are the security for the issue of banknotes. Thus, in modern conditions, the issue of banknotes is fiduciary (that is, not backed by gold), their circulation is based on the trust of the country's population in their issuer.
The mechanism of modern money emission determines credit nature of the security of banknotes . When the issue is carried out as a result of lending to commercial banks, it is secured by the obligations of commercial banks; when the issue occurs as a result of lending to the government, it is secured by government obligations (government securities); when the issue is carried out during the currency transactions, its security is foreign currency, which can be considered as obligations of foreign central banks (states).
Money, credit, banks: Proc. / G.I. Kravtsova, G.S. Kuzmenko, E.I. Kravtsov and others; Under the editorship of G.I. Kravtsova. - Minsk: BSEU, 2003.
NOTE 2
There are two ways to manage the money supply:
1. Direct impact on the value of the monetary base. Recall that the monetary base includes the cash supply, required reserves, balances on the accounts of the banking system in the central bank system and placed bonds of the central bank.
There are three channels for issuing money leading to the expansion of the monetary base as the basis of the money supply in the country: credit, stock and currency.
Issuance credit channel - issuance of loans by the central bank to commercial banks and the government.
The issuance of loans to the economy is reflected in the assets of the central bank, their distribution - in liabilities. The monetary base increases by the corresponding amount. Lending by the central bank to the government is considered a bad practice, since any government must independently balance its income and expenses, and finance the deficit through market borrowing by placing its obligations on the stock market.
In addition, history shows that central bank loans to the government are usually not repaid on time, but are restructured.
Such lending leads directly to inflation.
On the contrary, the process of lending by the central bank to commercial banks is considered normal market practice and is called refinancing. Thus, the need of the real sector of the economy in cash is provided. Therefore, when some economists write that modern money has credit basis, they are right: good money is just that. For commercial banks, the central bank acts as a "lender of last resort". They turn to him when other opportunities to raise funds (deposits and loans, including in the interbank market) have been exhausted.
Stock issuance channel - the central bank practices the so-called operations on open market, that is, transactions related to the purchase and sale of government securities.
By purchasing government bonds, the central bank increases the money supply in circulation, while both the assets of the central bank (under the item "Securities") and its liabilities (under the items "Cash in circulation", "Required reserves" and "Account balances"). When selling government securities, the central bank, on the contrary, withdraws money from circulation, while its liabilities, assets and monetary base are reduced.
In Russia, the stock issue channel was the main one from 1995 to 1998.
This system has led to the accumulation public debt, which was one of the reasons for the government to declare default on its obligations.
Currently, the stock issue channel is actively used in some countries, for example, in the USA and Japan.
Open market operations
are also an ideal way to regulate the liquidity of the banking system. At the same time, the purchase of government bonds by the central bank can cause side, not always desirable, macroeconomic effects in the financial market:
1) increase in interest on government bonds;
2) reduction of interest on deposits due to the growth of the money supply.
Currency emission channel - the central bank practices transactions for the sale and purchase of foreign currency on the open market, or the so-called foreign exchange and ruble interventions. The Bank of Russia carries out such interventions on the Moscow Interbank Currency Exchange (MICEX).
If the central bank buys foreign currency, it automatically increases the money supply in circulation. At the same time, its assets (in terms of the article “Gold and foreign exchange reserves of the state”), liabilities and the monetary base grow by an adequate amount. If the central bank sells foreign currency, it withdraws money from circulation, the monetary base shrinks. The Central Bank may also establish a requirement for the mandatory sale of exporters' foreign exchange earnings.
Mandatory sale of foreign exchange earnings by exporters was introduced in Russia during the 1998 crisis. Initially, the standard was 50%, from January 1999 it was increased to 75%. In connection with the rise in oil prices, from August 2001 the standard was reduced to 50%, in July 2006 - to 25%, in December 2004 - to 10%, and from 07.05.2007 the mandatory sale of foreign exchange earnings by exporters was completely canceled .
However, the purpose of the central bank's foreign exchange operations is often not to regulate the money supply, but to manage the exchange rate of the national currency and maintain the state's foreign exchange reserves. Managed Policy exchange rate has its own logic: exchange rate too low national currency is the cause of inflation, and too high - reduces the competitiveness of domestic products in the domestic market, increases the attractiveness of imports and suppresses economic growth.
Being independent instruments of monetary policy, foreign exchange interventions at the same time can lead to an undesirable change in the money supply and cause either inflation (rising prices) or deflation (decreasing prices). To eliminate this negative effect, central banks implement a special policy called sterilization.
Sterilization — neutralization of the negative consequences of open-pit operations foreign exchange market through reverse transactions in the securities market.
The money supply thrown into circulation when buying foreign currency can be withdrawn from circulation again by the central bank by selling its bonds or government bonds for the corresponding amount. In this case, there is an exchange of some assets of the central bank for others without changing the monetary base and the money supply in circulation.
The currency emission channel poorly reflects the needs of the economy in money and is less capable of performing the function of an active regulator of the money supply. Rather, it acts as a kind of passive mechanism for adjusting to the movement of capital between countries or is a side effect of an active policy of managing the exchange rate.
2. Impact on the value of the money multiplier.
To do this, the central bank uses two tools:
1) change in the discount rate (refinancing rate);
2) change in the norm of required reserves.
Malkina M.Yu., "Monetary Economics: Tutorial." - Nizhny Novgorod: Nizhny Novgorod State University, 2010.
NOTE 3:
"There are three classic models for issuing money. The colonial model is the one we have in Russia, a currency board, or a currency exchanger. The second option is american model when the central bank, in this case the Federal Reserve, throws away dollars in exchange for Treasury bonds. And the third option is called the German model. Although in many countries after the war this mechanism was used. Money entered the economy as a result of refinancing commercial banks. Commercial banks give loans and, as it were, refinance their claims with money from the Central Bank.
That is, the Central Bank gives money against the security of those loans that commercial banks have issued for the implementation of projects in the real sector of the economy. This model is normal, healthy. There are also "buts" there, however, of the three models, this is the most normal, because it focuses the Central Bank on the development of its own economy and the money supply approximately corresponds to the mass of commodities, that is, at least there should not be high inflation here. "
Valentin Katasonov: "THE WAR IS GOING ON AND THE RUSSIAN ECONOMY IS UNARMED"
The issue of money is one of the main elements of the functioning monetary system. The issue of cash, as well as non-cash money, occurs constantly, but at the same time, their number in circulation is maintained, since the process of depositing cash at the cash desks of banks is also taking place at the same time. The issue of money is not the production of new bank notes, but only such issuance of them into circulation, in which there is an increase in the money supply.
It can occur in the form of cash and In the first case, it is called the emission of money into circulation. The monopoly right to this belongs to the country's central issuing bank (in Russia - the Central Bank).
No other banks and organizations can be vested with the right to increase the money supply by law. Only in this case is it possible to accurately control and manage the formation of the M0 monetary aggregate - banknotes that are simultaneously in circulation outside the banking system.
The issue of money is connected with the work of all banks. There is a two-tier banking system in our country, which means that the emission mechanism works on the basis of a bank multiplier. That is, the multiplication (increase) of money in deposit accounts occurs when they move from one to another commercial bank. One commercial bank cannot multiply money; the entire banking system is involved in this process. The credit multiplier is the engine of the whole process, since it is carried out only when crediting the economy; deposit - reflects the increasing amount of money on bank deposits.
The mechanism is associated with a free reserve - these are all the resources of commercial banks that can be used at a certain moment to conduct active banking operations. After all, commercial banks have the right to conduct such operations only within the limits of the resources that they have in their accounts. Money on deposits can increase up to five times the amount. The mechanism of multiplication is controlled by the Central Bank, regulating the monetary turnover in the country.
The issue of money implies the issuance of all forms of banknotes into circulation. Not only paper banknotes are issued into circulation. The banknotes issued by the Central Bank represent it and are reflected in the Treasury, they issue treasury notes, and in addition to this type, there is also a deposit-check issue of money, in which deposits on the accounts of clients who are served in banks increase, which leads to an increase in the number of checks involved in servicing non-cash payment transactions.
When banknotes are issued into circulation, there is a natural increase in the amount of money in circulation, which is one of the causes of inflation. During the circulation of gold money, their quantity in circulation was regulated by the needs of this circulation, when gold settled in the form of a treasure in the treasury or again entered circulation. Today, with paper money and credit types circulation is not capable of self-regulation. An increase in the mass of money is necessary with the growth of production volumes and the sale of goods produced by the economy. But in a situation where the supply of money exceeds the demand for them, prices begin to rise, inevitably leading to inflation.
The issue of cash is carried out through their release into circulation, accompanied by an increase in the mass of cash in circulation. The Central Bank predicts the size of future emissions and distributes it by region.
Money is constantly moving in cash and non-cash form, passing from business entities to banks and vice versa. Monetary units do not have a value equal to face value. They can only apply, since non-cash funds are reflected only in the form of bank account entries.
