The financial system of Ukraine in comparison with other world countries

THE MINISTRY OF SCIENCE AND EDUCATION OF YOUTH AND SPORT OF UKRAINE

SUMY STATE UNIVERSITY

Faculty of Economics and Management

Chair of Finances

 

 

 

 

 

INDIVIDUAL TASK ON DISCIPLINE

“FINANCES”

on theme

“The financial system of Ukraine in comparison with other world countries”

Variant 1

Number of student’s book 10040040

 

 

 

 

 

 

 

 

Student                                                                                Nechiporenko Victoria

                                                                               group M-03

Supervisor                                                                           Anastasiya Abryutina

 

Sumy

2012 
TABLE OF CONTENTS

 

INTRODUCTION....................................................................................................3.

1. Finance system of Ukraine……………………………………………………...5.

    1.1. The functioning of finance ………………………………………………...6.

    1.2. The structure of the financial system of Ukraine ………………………….6.

    1.3. The financial market and its components ………………………………….8.

    1.4. The major financial institutions ……………………………………………9.

2. Financial system of Russian …………………………………………………..10.

    2.1. The functioning of finance ……………………………………………….11.

    2.2. The structure of the financial system of Russian ………………………...12.

    2.3. The financial market and its components ………………………………..15.

    2.4. The major financial institutions ………………………………………….16.

3. Practical part ………………………………………………………………….18.

CONCLUTIONS………………………………………………………………...21.

REFERENCES…………………………………………………………………..23.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

With the proclamation of the political and economic independence of Ukraine

the question of the creation of the national financial and credit system. Case in

the fact that the financial and credit system, which functioned in Ukraine

at that time, expressed the economic relations of the former Soviet political

and economic systems, and their headquarters were in the borders of the Ukrainian state.

It was impossible to implement neither political, nor economic transformation,

ensure that the national political and economic sovereignty without forming and development of national financial, monetary and credit system.

Marxists, see under financial policy in the first place the totality of public Relevance of research topic. Reliable the financial system is the linchpin in the development and successful the functioning of a market economy and a necessary prerequisite for the growth and the stability of the economy as a whole. This system is the basis of mobilizing and distributing savings of the company and helps it everyday the operation. Therefore, although the structural shift from mainly centrally planned and controlled economy to an economy

functioning in accordance with market principles, includes many of the elements, the most important is to create a reliable financial system. After you have a strong financial system, can develop markets money and capital, especially primary and secondary markets of national government securities.

Elaboration extent of the problem. In recent years the issues of creating

sound financial system and in the state financial policy is dedicated to a significant number of publications. However, the unity of the on the theoretical aspects of this issue has not been reached.

So, the Western large economists did not give a clear definition of

financial policy. WITH. Fischer, R. Dornbusch do not allocate

financial policy as an independent concept. At the same time they suited to the study of this topic, by expanding the definition of fiscal policy. Similarly, consider this problem and some other representatives of the foreign economic schools. In particular To. R.McConnell and WITH. L. BRU combine the concepts of financial-budgetary and fiscal policies, defining them as amendments introduced by the government in order public spending and taxation, aimed at ensuring

full employment and is not inflationary national product. Actions on stabilization of financial resources, their distribution and the use for the state's implementation of its functions, pointing out that social orientation and effectiveness of the impact of the financial policy the development of the productive forces and the relations of production are determined by the objective regularities of the economic development, socio-political system of the country. Goals and objectives of the work. The aim of the research is revealing the essence and

the structure of the modern financial system in a market economy and trends

of its development. First you need to decide on what criteria we will compare the two countries: the Ukraine and Russia. First of all we shall compare on the basis of the structure of the financial system, as it is known in different countries it is different, after compare the financial market and all its components, then the functioning of Finance and the last shall compare the major financial institutions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. The financial system of Ukraine

The most important element of the economic mechanism of modern society

are Finance. Finances - the system prevailing in the society of economic relations on the formation and use of funds of funds on the basis of distribution and redistribution of the total social product and national income.

Finance is a historical category. They arose in the conditions of inventories

cash relations under the influence of the development of functions and needs

of the state. The term "Finance" comes from the Latin. "finansia", which means

income payment. In the meaning of "cash payment" he began to be used in

XII-XV centuries in Italy, a number of cities which - Florence, Venice, Genoa, were at that time the largest European centers of trade and banking. In hereinafter, the term has gained international spread and became be used as a concept connected with the system of financial relations, the formation of money resources mobilized by the state to perform their political and economic functions.

In pre-capitalist formations of government revenues had mainly natural character. The majority of needs the state was satisfied at the expense of various kinds of revenue from natural charges. With the decadence of the feudal system and the development of his the depths of capitalist relations become increasingly important money incomes and expenditures of the state. This process is enhanced with expansion of commodity-money relations, grow and become more complex functions of the state. With a Department of the state Treasury of personal cash and ownership of the monarch arise concept of "public Finance" and "state budget".

In modern conditions the notion of Finance covers, on the one hand, public Finance, on the other - the finances of the enterprises and corporations. Public Finance is a special sphere of economic relations, associated with the secondary, as well as a primary distribution and consumption part of gross social product in order to form cash the funds required the state to exercise its functions. Their material content is embodied in the national and local budgets, special funds, finances of state-owned enterprises. Private Finance enterprise and corporate Express money relations, which arise in the course of their economic activity and provide the production process and reception of profit. They materialized in the form of money capital, the various cash funds of the enterprises.

1.1 The Functioning of Finance

Finance function through the financial system, which includes a combination of different forms of organization of financial relations between the state and  enterprises, between enterprises, organizations and their associations, the relations of the state with the enterprises and organizations with the population. The most important instruments of this system are taxes, payments to the budget, payments for public loans, rental payments, forming of the budgetary and non-budgetary funds and their use for the satisfaction of social needs, etc. An important element of the financial system is the Ministry of Finance of Ukraine and its bodies on the ground. It is the beginning of forming and use of the main economic regulators and is responsible for the complete responsibility.

1.2. The structure of the financial system

The financial system of Ukraine is rather complex and multi-layered structure. Components of the three-tier system of Finance are: Finance primary structural links of the economy, the finances of the enterprises and organizations; public Finance; the finances of the population. Graphically this scheme is shown in Fig. 1.

Specified in the scheme of the components of the financial system in further consideration include the Finance sectors of the economy, the finances of state-owned enterprises, co-operative, joint-stock, private enterprises and other enterprises.

The main principles of the construction of the three-tier system of Finance were:

a) full economic independence of the Finance of the enterprises and their isolation from public Finance;

b) independence and separateness of the state budget from extra-budgetary funds, including social insurance Fund, pension and other;

c) self-financing of all economic entities;

d) the formation of independent base of local and regional budgets;

e) the right to conduct independent financial policies for all economic entities;

f) development and implementation of business plans of each of the participants of the financial and economic activities. Realization of these and other principles would help Finance take their right place in the entire economic system, maintain the turnover and the circulation of funds, improve the efficiency of production, productivity and quality of products.

The financial system of Ukraine was and still is not free from such negative features of the totalitarian state, as excessive centralization, a single form, planning from the top, division of the state financial and material resources for the decision of problems of the state, society and enterprises. Because of inflation falling living standards of the majority population and it still remains in fact withdrawn from the system of Finance.

1.3. The financial market and its components

Under the conditions of a market economy to provide a properly functioning mechanism of movement of cash flows of resources from the population, which mainly carries out the savings to investments, which are being implemented enterprises, can only be clearly functioning financial market. He is depicted schematically in Fig. 2.

None of the components of the financial market may not be an instrument of market economy, as they are interrelated and mutually intertwined. But also have their own specifics. The state should well consider the specific character and use of such mechanisms of the regulation of each of these institutions: the banking market, securities market and insurance market to improve the economic situation of all subjects of economic life and raise the efficiency of social production. Although the financial market in Ukraine is only nascent its main operating elements are already working. For example, a national banking system, work has begun the primary securities market, the beginning of the insurance market, which is constantly gaining momentum. The main subjects of the financial market is issuers, investors and financial intermediaries.

Developed financial market consists of a variety of channels, which can be summarized in the form of two groups:

a) the channels of direct financing, for which means of moving directly from the owners of savings to borrowers through the sale of shares, bonds and other securities;

b) the channels of indirect financing, for which the cash flows from the owner of the savings to the borrower are channeled through financial intermediaries (banks, insurance companies and other credit and savings institutions). The task of financial intermediaries is the direction of the savings from those, who earns more than it spends, to those who spend more than they earn. In this process the most important functions are performed by the banks, so as they purposefully regulate the cash flows from the owners of savings to investors.

1.4. The major financial institutions

It is known the statement that "every link of the financial system represents a certain sphere of financial relations, and the financial system as a whole, the totality of the various spheres of financial relations in the process of which are formed and used funds of funds."

By analogy with generalizing concept of the subjects of the stock market «investment Institute" - introduce the concept of "financial institution ".

Financial institution, or any one of the subjects of financial relations, which is the subsystem (or element) of the financial system, in the implementation of the relevant functions of the financial system. On the set of "financial institutions" can be installed hierarchy, corresponding to the hierarchy: state - local Finance - finances of the enterprises. However, when establishing a hierarchy can be used and other approaches, for example, the urgency, the importance of the subject to the decision of problems.

It should be noted that the financial system of the country is one of the fast developing undergoing reform. The names of the most important elements of the financial system of the country and their powers fairly often change.

At the present time, there is some overlap of powers and tasks of financial institutions that can be and is the source of role conflicts in the financial system. For example, there are discussions on the distribution of functions and areas of responsibility for the accreditation of experts and licensing of legal persons in terms of their work on the securities market, etc. And therefore, the functions of the elements are redistributed in accordance with the present stage of development of the financial markets and the new tasks of reforming the economy. It would be useful to further redistribution of functions of elements of the financial system and, considering the objectives of financial goal-setting, marketing, management.

Distribution of functions between the financial institutions of higher level of the hierarchy of modern Ukraine.

The distribution of functions between the financial institutions of higher level of the hierarchy of modern Ukraine can be the following:

• The administration of the President of Ukraine - goal setting financial policy: the construction of the'tree of financial goals" for the territories and branches, definition of permissible and possible sources of financial resources; development of Decrees and legislative initiatives in the area of Finance;
• The Verkhovna Rada of Ukraine - marketing and coordination of financial tools of the state, development and the adoption of laws, the approval of the budget;
• The Ministry of Finance of Ukraine - financial management. It consists of offices, with their own specific subfunction. So budget office is the project of the Federal budget. In addition it includes sectoral management of national economy (defense and defense industry, construction and construction industry, transport systems and communications, environmental protection, agriculture and processing industry, etc.); control and audit Department, etc.
• Treasury of Ukraine - provides cash execution of the budget;
• The national Bank of Ukraine - provides macroeconomic regulation of money circulation, than the impact on the state of the financial system, is an agent of the Government of Ukraine on placement of internal debt, regulates the activities of commercial banks on financial markets;
• The tax Inspectorate ensures the accuracy and control of collection of taxes.

 

 

 

2. Russia's financial system

In connection with this financial system is a combination of different areas (parts of) the financial relations, each of which is characterized by peculiarities in the formation and use of funds of funds, the different role of the public reproduction.

The financial system of the RUSSIAN Federation includes the following parts of the financial relations: state budget, non-budget funds, state credit, insurance, finances of enterprises of various forms of ownership. All of the above financial relations can be divided into two subsystems. This national Finance, ensuring the needs of the extended reproduction of the macro, and the finances of economic entities used to ensure the reproduction process in cash at the micro level.

The distinction of the financial system in some parts due to differences in the objectives of each level, as well as in methods of formation and use of centralized and decentralized funds of funds. National centralized funds of money resources are created by the distribution and redistribution of national income generated in branches of material production.

The important role played by the state in the field of economic and social development, leads to the need for the centralization at its disposal a large part of the financial resources. Forms of their use are budgetary and extra-budgetary funds for the needs of the state in solving economic, political and social tasks. Other forms and methods of formation and use of monetary funds shall apply credit and insurance parts of the financial system.

The interconnection and interdependence of the constituent parts of the financial system are caused by single entity Finance. Through the financial system of the state affects the formation of centralized and decentralized funds, funds of accumulation and consumption, using for this tax, expenditures of the state budget, state loan.

2.1. The functioning of Finance.

The state budget is the main financial plan of the country, approved by the Federal Assembly of the RUSSIAN Federation as a law. The financial system - the aggregate of organizations, providing money turnover in the framework of a certain country include:

 

• state financial subsystem, which provides the receipt of monetary funds to the budget and their use;
• banking subsystem, which includes financial institutions, providing settlements, loans, investments, transactions with cash;
• the subsystem of the circulation of state securities, which serves to attract funds on the secondary securities markets.

The state manages the company and consists of a number of structures: the political, economic, social, religious, etc.

The interconnection and interdependence of the constituent parts of the financial system are caused by single entity Finance.

Through the financial system of the state affects the formation of centralized and decentralized funds, funds of accumulation and consumption, using for this tax, expenditures of the state budget, state loan.

2.2. The structure of the financial system of Russia.

The financial system of any country consists of several interrelated elements (institutions) and bodies. The existence of various institutions within the financial system is explained by the fact, that the finances serve the diverse needs of the society, cover their impact the economy of the country and the whole sphere of social activities in General. Proceeding from this, under the financial system of the Russian Federation should be understood:

a) the aggregate of financial institutions, each of which contributes to the formation and use of appropriate monetary funds;

b) the sum of public authorities and institutions, carrying out within its competence, financial activities.

The totality of financial institutions, regulating the creation, redistribution, and use of funds of funds, constitutes a financial system, which reflects the development of the state in conditions of transition to the market .

So, in particular, financial the system of the Russian Federation consists of the following funds of funds and corresponding legal institutions:

1) the Budgetary system, consisting of the Federal budget, budgets of the subjects of the Federation and the budgets of local self-government bodies.

2) State non-budgetary funds (regulation of which is devoted directly to Chapter 17 of the BC RF. Thus, according to article. 144 BC, state non-budgetary funds of the Russian Federation are as follows: Pension Fund of the Russian Federation; the social insurance Fund of the Russian Federation; the Federal Fund of compulsory medical insurance; the State employment Fund of the Russian Federation).

3) insurance Funds.

4) State loan.

5) Finance economic entities (ресурсовые funds).

6) the Stock market.