Money emission is an important financial instrument used in the economy of every country. The concept is always heard, but many people still do not fully understand what exactly is hidden behind this word. What is needed is a clear explanation of what issuing money is in simple words.

Emission: what is it, general information

Money emission is the introduction of new cash and non-cash money into the use of citizens and enterprises, which causes the volume of money used in the country to increase. Emission is often confused with the ordinary release of money, which occurs constantly. However, upon issuance, there is no increase in the money supply. This process involves more than just turning on the printing press and issuing fresh banknotes and coins for public use. Three more types of products are available:

• cash;
• non-cash money;
• valuable papers.

Money emission in the Russian Federation is carried out by the state, and only it has a monopoly on the issue of paper money. The Central Bank performs this task and manages the issuance process. As soon as a decision is made to replenish the money supply, the Central Bank begins collecting data on how much cash passes through banks, determines which areas need an injection of funds, and the final volume. After this, the emission mechanism starts.

The Central Bank is also the author of the design of the new banknotes, and is looking for new ways to increase their service life and make it more difficult for those who try to counterfeit them. The organization strictly controls the process of injecting money and subsequently distributes it among the regions of the Russian Federation. Transporting large amounts of cash to remote regions is difficult and costly. Cash settlement centers located in different regions of the country help with this. They already store 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 counterfeiting. Coins are minted at the Moscow and St. Petersburg mints.

Emission policy adopted in Russia

The emission policy in Russia is based on a number of principles. Here are the most basic of them:

• principle of uniqueness and monopoly– this process is subject only to the Central Bank of Russia, only it injects funds or withdraws them, thus regulating the volume of all money in use by citizens;
• optional security principle– the gold reserve available in our country is simply not enough for the ruble to be tied to gold, therefore all the money that circulates in the country is not backed by gold (as in most countries);
• denomination principle: ruble– this is the monetary unit of our country and the introduction of any other units and the production of analogues is prohibited;
• the ruble must be accepted throughout the country;
• interchangeability of banknotes- a 1000 ruble bill is equal to ten 100 ruble bills or 20 50 ruble bills.

The issue of money is carried out only by the Central Bank and has strict legal regulation. All decisions regarding the issue must be made strictly in accordance with the law and at the level of the board of directors of the Central Bank.

Types of emissions

Three main varieties were listed above. Each of them should be given special attention and analyzed in more detail.

Cash issue

The required amount of cash - paper banknotes - is put into circulation. In this case, the printing press actually starts and new, crisp bills are born. However, this does not always happen. Cash issuance in the Russian Federation is carried out by the Central Bank with the help of RCCs - cash settlement centers located in different regions and servicing local banks. The required amount of money to be thrown in depends on how much finance the banks need, and often changes, so it is not practical to carry cash from the center all the time.

To issue paper money, the RCC has its own cash reserves. As soon as a region has a need, by decree of the Central Bank, reserve banknotes are sent for general use.

The RCC cash desk receives cash daily. As soon as the amount of funds received begins to exceed the amount issued, part of the money is withdrawn and sent back to the bins.

Issue of non-cash money

This is a 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 the banks. Non-cash issuance is necessary to satisfy the need of people and businesses for additional finance. Banks do this, but only strictly within the limits of the capital they have accumulated.

Issue of securities

Not only the state, but also ordinary enterprises and joint-stock companies can issue securities. A certain number of securities are introduced into the market, which can be purchased at free prices, depending on the position of the company. In this way, additional finances are attracted, this is done according to certain rules and under the strict supervision of the state. The issue of securities is divided into two types:

• primary– an organization or joint stock company has never issued shares or bonds and is doing this for the first time;
• subsequent– the organization has already done this and intends to place securities again.

The decision to issue is made by shareholders or the board of directors. The process itself occurs according to certain legislation and goes through the following stages:

• making a decision on the need for an issue;
• state registration of issue;
• preparation and printing of securities, if they will be issued in paper format;
• accommodation;
• providing a report on the results of the release;

After the issue of securities, they are placed with their first holders - this is how the primary market appears. If after this they are resold, a secondary market is formed.

Cartoon emission model

We will talk about credit and deposit animation. Not only pulp and paper mills, but also ordinary banks participate in the non-cash issue. They constantly use their excess reserves, and the more the bank has accumulated, the more additional finance it can put into circulation. A bank can only provide people with as much money as it has in its excess reserves.

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 lending opportunities, issues a loan to the next client, and he takes 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-deposit multiplication.

Emission consequences

The emission 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 everyone should feel good. However, it is important to understand what the emission 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 its value. If you go too far with emissions, a new problem will arise - inflation. Prices are rising, and the purchasing power of citizens with a fixed salary is falling, because now this salary can buy much fewer goods and services. At the same time, the incomes of entrepreneurs selling essential goods are growing unreasonably. This leads to a violation of the balance of payments. Thus, in no case can it be said that issuing money is the most effective method of reducing inflation.

Conclusion

Money emission is an integral tool regularly used in the economy of every country. However, its use requires a competent approach and careful preparation, since the emission process can easily lead to inflation, even greater destabilization of the economic situation in the country and many social problems. Successful emission is possible only if it is moderate, as well as competent economic policy and stable growth of production in the country.

Bokova I.V., Dyadichko S.P., Krymova I.P., Musina L.A., Reznik I.A.
Finance and credit: A short course of lectures. - Orenburg: State Educational Institution OSU, 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, through monetary policy, the ability of a commercial bank to issue credit money, depending on what volume of money supply is currently considered necessary.

Commercial bank reserves refer to the amount of money available to immediately satisfy the demands of depositors.

The ratio of the amount of reserves to the amount of deposits is called the reserve norm (reserve norm).

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 by credit institutions of a certain part of the raised funds with the Central Bank. The Central Bank obliges banks to deposit part of the funds they raise, the Central Bank thereby limits the bank’s credit capabilities and regulates the overall liquidity of the banking system. By changing the reserve ratio, the Central Bank has the opportunity to maintain at a certain level the volume of money supply in circulation in the country.

Free (excess) reserves of a commercial bank are understood as the totality of resources that at a given time can be used for active operations.

Example: The amount of funds raised is 1000 rubles;
The required reserve ratio is 10%;
Free reserves of KB -900 rub.

The amount of free reserve of an individual commercial bank consists of the capital of the commercial bank; raised funds: centralized loan provided by CB Bank of Russia; interbank loan minus contributions to the Central Bank, and the resources of the bank itself. The ability of a commercial bank to “create money” depends on the size of the required reserves established by law in the country. The lower the amount of required reserves, the more money the banking system can create. A system of commercial banks 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 CB deposit accounts during the period of their movement from one bank to another.

Km = 1/N rev. res. ,(2)
where Km is the multiplication coefficient;
N vol. res. - the norm of required reserves.

The multiplication coefficient can also be expressed as the ratio of the resulting money supply in deposit accounts to the amount of the initial deposit.

Rice. How the money multiplier works

For the purpose of simplification, 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 established by the central bank is 20%.

Suppose that enterprise 1 needs a loan to pay for supplies to enterprise 2. Commercial bank 1, which services 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 amount of 100 million rubles that ended up in a commercial bank 2, namely 20 million rubles, in accordance with the required reserves norm 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 commercial bank 2 disappears.
Commercial bank 3rd part of the received reserve in the amount of 16 million rubles. (20% of 80 million rubles) is transferred to the centralized reserve, and the remaining part is 64 million rubles. Bank 3 is used to issue a loan to the next company.
This process can continue until the free reserves of commercial banks and enterprises are completely exhausted. Mandatory reserves are accumulated in the central bank and reach the size of the initial free reserve of 100 million rubles, i.e. amount of loan to a commercial bank 1.
However, the money is in the current accounts of enterprises 2, 4, etc. (all even-numbered enterprises) remain untouched, 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, the money in deposit accounts can increase by a maximum of 5 times. This is due to the fact that the multiplication coefficient is inversely proportional to the rate of contributions to the centralized reserve. In the above example, the required reserve ratio is 20%, therefore, the multiplication coefficient 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 where the money issued by the Central Bank arrived, a free reserve is formed. It is reflected as a balance in the main correspondent account. This reserve can be called “primary deposit” and is used to issue loans. Through loans, money is transferred to another commercial bank, where a free reserve is also formed (“secondary deposit”), within the limits of this reserve loans are issued, from the money of which a free reserve is formed in a third bank (“third deposit”), then in the fourth, etc. .d. In the process of lending carried out by commercial banks, increases, i.e. multiplies the amount of money originally issued by the central bank in non-cash form by the commercial banking system .

However, the multiplication coefficient will never reach its maximum value, because always part of the free reserve is used for other non-credit transactions (in accordance with the established cash limit of any enterprise and the bank must have cash for cash transactions.)
The animation process is continuous , therefore the multiplication coefficient is calculated for a certain period of time (for example: a year). The Central Bank performs the function of monetary regulation, managing the multiplier mechanism, thereby expanding and narrowing the issuing capabilities of banks

Issue of cash

The issue of cash is the release into circulation, in which the total amount of cash increases. (Figure 5)

The monopoly of issuing cash belongs to the Central Bank. Based on the bank's cash turnover and prepared analytical reports, the Central Bank predicts the size of the expected issue. It is necessary not only to determine the size of the proposed emission, but also in which regions it should be carried out. The need for money is constantly changing. Cash issuance 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 (cash settlement centers), containing reserve funds and working cash desks.

The reserve funds of the RCC store a stock of banknotes intended for their release into circulation in the event of an increase in the need of the economy of a given region for cash. These banknotes are not considered money in circulation. They do not move, do not accumulate in the form of treasure, do not serve as a means of payment, so they are reserve.

Money is constantly received into the working cash register and cash from the bank is issued from it. Money in the working cash register is in constant motion; it is considered money in circulation.
If the amount of cash received into the account exceeds the established limit for a given cash center, then the money is withdrawn to the reserve fund. When a commercial bank needs cash, the reverse process occurs. From the bank account, within the limit of its free reserve, the RCC is obliged to service the bank free of charge.

For example, CBs have a need for cash, but the flow of money into their operating cash desks does not increase. In this case, the RCC is forced to increase the release of cash into circulation. To do this, the RCC requests permission from the Central Bank of the Russian Federation, and upon receipt, transfers cash from the reserve fund to the working cash register. For RCC this will be an emission operation. But in one RCC there may be an increase in the amount of cash, and in another, on the contrary, there will be a withdrawal from the working cash register. Therefore, the Board of the Central Bank draws up a daily balance sheet based on information from the RCC network, where the issue of cash took place, and where the withdrawal took place.


Figure 5 - Cash flow

NOTE 1.

The most common opinion is that both the central bank and commercial banks take part in the non-cash issue process: If the central bank does not provide commercial banks with additional funds to maintain cash circulation and increase reserves, non-cash issuance by commercial banks will be severely limited or cease altogether. Thus, The basis for non-cash emission of the banking system is an increase in the monetary base of the country's central bank. The central bank can increase the volume of the monetary base by providing loans to commercial banks and the government (purchasing various types of securities), as well as by purchasing foreign currency or gold (i.e.carrying out active operations by the bank , 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, the central bank's liabilities increase, its resources, which it can use to carry out active operations, increase accordingly.

Similarly, the main sources of cash entering the economy are:
. central bank lending to commercial banks;
. purchase of government securities by the central bank;
. central bank purchases of foreign currency and gold.

From the simplified balance sheet of the central bank (see Table 2.1) it is clear that the value of the item “Cash in circulation”, in addition to the volume of active operations of the central bank, is also influenced by the structure of the monetary base. The greater the reserves of commercial banks, the less, other things being equal, the issue of banknotes.

Ensuring the issue of banknotes. So, the channels for issuing cash are the active operations of the central bank. The issue itself occurs as a result of an increase in the liabilities of the balance sheet of the central bank; therefore, the issue of banknotes is ensured by the assets of the central bank. 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 banknote collateral . When the issue is carried out as a result of lending to commercial banks, it is secured by the obligations of commercial banks; when an issue occurs as a result of government lending, it is secured by government obligations (government securities); when the issue is carried out during foreign exchange transactions, it is secured by 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; Edited by G.I. Kravtsova. - Mn.: BSEU, 2003.

NOTE 2.

There are two ways to manage the money supply:

1. Direct impact on the size of the monetary base. To recap, the monetary base includes the cash supply, required reserves, banking system account balances with the central bank, and outstanding central bank bonds.

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.

Credit channel of issue - 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 balance its own income and expenses, and finance the deficit through market borrowing by placing its liabilities on the stock market.

In addition, history shows that central bank loans to the government are typically not repaid on time but instead are restructured.

Such lending directly leads to inflation.

On the contrary, the process of lending by the central bank to commercial banks is considered a normal market practice and is called refinancing. This ensures that the real sector of the economy needs funds. Therefore, when some economists write that modern money is credit-based, they are right: good money is just like that. For commercial banks, the central bank acts as the “lender of last resort.” They turn to it when other possibilities for raising funds (deposits and loans, including on the interbank market) have been exhausted.

Stock issuance channel - the central bank practices so-called open market operations, that is, operations related to the purchase and sale of government securities.

By purchasing government bonds, the central bank increases the money supply in circulation, and 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, on the contrary, the central bank withdraws money from circulation, while its liabilities, assets and monetary base are reduced.

In Russia, the stock issuance channel was the main one from 1995 to 1998.
This system led to the accumulation of public debt, which was one of the reasons why the state declared a default on its obligations.

Currently, the stock issuance channel is actively used in some countries, for example, the USA and Japan.

Open market operations They 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 on the financial market:
1) increase in interest on government bonds;
2) reduction in interest on deposits due to growth in the money supply.

Currency emission channel - the central bank practices operations 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 item “Gold and foreign exchange reserves of the state”), liabilities and monetary base are growing by an adequate amount. If the central bank sells foreign currency, it takes money out of circulation and the monetary base shrinks. The Central Bank may also establish a standard for the mandatory sale of foreign currency earnings by exporters.

Mandatory sale of foreign currency earnings by exporters was introduced in Russia during the 1998 crisis. Initially the standard was 50%, since January 1999 it was increased to 75%. Due to rising oil prices, from August 2001 the standard was reduced to 50%, in July 2006 - to 25%, in December 2004 - to 10%, and from 05/07/2007 the mandatory sale of foreign currency 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. The policy of a managed exchange rate has its own logic: a too low exchange rate of the national currency causes inflation, and a too high one 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 undesirable changes in the money supply and cause either inflation (price increases) or deflation (price decreases). To eliminate this negative effect, central banks are implementing a special policy called sterilization.

Sterilization — neutralization of the negative consequences of operations on the open foreign exchange market through reverse operations on the securities market.

The money supply thrown into circulation when purchasing foreign currency can be withdrawn from circulation by the central bank again by selling its own bonds or government bonds for the corresponding amount. In this case, some assets of the central bank are exchanged for others without changing the monetary base and money supply in circulation.

The currency emission channel weakly reflects the economy's needs for money and is less able to perform the function of an active regulator of the money supply. It rather acts as a kind of passive mechanism for adapting to the movement of capital between countries or is a side effect of an active exchange rate management policy.

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: Textbook." - Nizhny Novgorod: Nizhny Novgorod State University, 2010.

NOTE 3:

"There are three classic models of issuing money. The colonial model is the one we have in Russia, the currency board, or currency exchange. The second option is the American model, when the Central Bank, in this case the Federal Reserve System, issues dollars in exchange for Treasury bonds. And the third option is called the German model. Although in many countries after the war this particular mechanism was used. Money entered the economy as a result of refinancing of commercial banks. Commercial banks give loans and, as it were, refinance these claims with money from the Central Bank.

That is, the Central Bank provides money as security for loans issued by commercial banks for the implementation of projects in the real sector of the economy. This model is normal and healthy. It also has its “buts”, however, of the three models this is the most normal, because it orients the Central Bank towards the development of its own economy and the money supply approximately corresponds to the commodity supply, that is, at least there should not be much inflation here. "

Valentin Katasonov: “THE WAR IS GOING ON, AND THE RUSSIA ECONOMY IS UNARMED”

The issue of money is the release into circulation of an additional number of banknotes and means of payment, causing an increase in the money supply.

A distinction is made between the issue of non-cash money and the issue of cash money.

In modern conditions, the issue of non-cash money is primary, since before cash appears in circulation, it must be reflected in the form of entries in the accounts of commercial banks. Thus, new money comes into circulation from banks as a result of credit transactions. As a result, the fundamental principle of organizing the state’s monetary system is the credit nature of money emission.

The purpose of issuing non-cash money is to meet the needs of enterprises for working capital and investments. It is carried out by crediting additionally issued money to correspondent accounts in commercial banks in the form of central bank loans.

In conditions of increased production or increased prices for goods, an additional need for money by the economy and the population constantly arises. This necessitates the existence of a mechanism for issuing non-cash money that satisfies this additional need.

In a two-tier banking system, the mechanism for issuing money operates on the basis of the bank multiplier.

The bank multiplier is the process of increasing (multiplying) money in the deposit accounts of commercial banks during the period of their movement from one commercial bank to another.

There are bank, credit and deposit multipliers. They characterize the mechanism of money multiplication from different positions.

The banking multiplier is the process of increasing money from the position of the subjects of animation, i.e. those who multiply money. This process is carried out by commercial banks. One commercial bank cannot multiply money; it is multiplied by a system of commercial banks.

The credit multiplier reveals the mechanism of the multiplication process, that multiplication can only be carried out as a result of credit operations of commercial banks.

The deposit multiplier reflects the object of the animation - money in the deposit accounts of commercial banks (it is they that increase in the process of multiplication).

The operating procedure of the bank multiplier mechanism is as follows. It exists only in multi-level banking systems. Moreover, the first level - the central bank - controls this mechanism, the second level - the commercial bank - forces it to act, and to act automatically, regardless of the wishes of individual banks. The banking multiplier mechanism is directly related to the free reserve.

Free reserve is the totality of all resources of commercial banks that at a given time can be used for active banking operations.

This concept appeared in Russia from Western economic literature. It should be noted that it is not entirely accurate. In fact, the free (operational) reserves of commercial banks are their liquid assets, but from the definition it is clear that this concept refers to resources, i.e., the liabilities of commercial banks.

This concept is based on the fact that commercial banks can carry out their active operations (issue
loans, buy securities, currency, etc.

D.) only within the limits of the resources available to them. The free reserve of the system of commercial banks consists of the free reserves of individual commercial banks, therefore, an increase or decrease in the free reserve of individual banks does not change its total value.

The amount of free reserve of an individual commercial bank is calculated using the formula

Wed = Kb + PR + Central Committee + MBK - OCR - JSC,

where Ср is the bank's free reserve;

Kb - capital of a commercial bank;

PR - attracted resources of a commercial bank (funds in deposit accounts);

CC - a centralized loan provided to a commercial bank by the central bank;

IBC - interbank loan;

OCR - contributions to the centralized reserve at the disposal of the central bank;

JSC - resources that are currently already invested in the active operations of a commercial bank.

The bank multiplier operates regardless of whether the loans are provided to commercial banks or the federal government. In this case, money will go to budget accounts in banks, and they also belong to attracted resources (PR), so the free reserve of commercial banks where these accounts are located will increase, and the bank multiplier mechanism will be activated.

The banking multiplier mechanism takes into account not only the provision of centralized loans, but also the purchase by the central bank of securities or currency from commercial banks. As a result of this, the resources of banks invested in active operations decrease, and the free reserves of these banks used for credit operations increase, i.e., the banking multiplication mechanism operates. The central bank can also turn on this mechanism
yes, when he reduces the rate of contributions to the centralized reserve. In this case, the free reserve of the commercial banking system will also increase, which, other things being equal, will lead to an increase in lending and the inclusion of a banking multiplier.

Management of the banking multiplier mechanism, and therefore the issue of non-cash money, is carried out exclusively by the central bank. The Central Bank, controlling the mechanism of the banking multiplier, expands or narrows the issuing capabilities, thereby performing one of its main functions - the function of monetary regulation.

The issue of cash is its release, which increases the amount of cash in circulation.

The monopoly on the issue of cash in the Russian Federation belongs to the Central Bank of the Russian Federation.

In a market economy, central banks predict the size of the expected issue using forecasts of cash turnover of credit institutions and their own analytical materials. At the same time, it is important to establish not only the optimal predicted emission value, but also its distribution among individual regions of the country.

Cash issuance is carried out in a decentralized manner. This is due to the fact that the need of commercial banks for cash (it is this that determines the size of the issue) depends on the need for it of legal entities and individuals served by these banks, and it is constantly changing. Therefore, each time importing money from the Center to satisfy this need would not only be impractical (due to manifoldly increasing circulation costs), but also simply impossible.

Cash issuance is carried out by the Central Bank of the Russian Federation and its divisions - territorial departments and cash settlement centers (RCCs). They operate in various regions of the country and provide settlement and cash services to credit institutions located in these regions.

To issue cash, reserve funds and working cash desks are opened in cash settlement centers.

Reserve funds store a stock of banknotes intended for their release into circulation in the event of an increase in the need of the economy of a given region for cash. Banknotes of reserve funds are not considered money in circulation, since they do not move, but are a reserve.

Cash from credit institutions is constantly supplied to the working cash desk of the cash settlement center and is constantly issued from it. Thus, the money in the working cash register is in constant motion. They are considered money in circulation. If the amount of cash received by the cash settlement center's working cash desk exceeds the amount of money issued from it, then the money is withdrawn from circulation. At the same time, they are transferred from the working capital of the RCC to its reserve fund.

The reserve funds of the RCC are managed by the territorial departments of the Central Bank of the Russian Federation. If, as a result of the action of the bank multiplier, the amount in deposit accounts of a given commercial bank increases, then as a result:

a) customers’ need for cash increases; b) the free reserve of a commercial bank increases.

RCCs are required to issue cash to commercial banks within the limits of their free reserves. Therefore, if the majority of commercial banks serviced by the RCC increase the need for cash, and the receipt of money in their operating cash desks does not increase equivalently, then the RCC will be forced to increase the release of cash into circulation. To do this, on the basis of a special issue permit from the Office of the Central Bank of the Russian Federation, he will transfer cash from the reserve fund to the working cash desk of the RCC. For this RCC this will be an issuance operation, although in the country as a whole there may not be any issue of cash.

When an issue is carried out by one RCC, another RCC may at the same time additionally withdraw a similar amount
cash, so the total amount of money in circulation may not change. For these purposes, a daily emission balance is compiled.

Money issued by the RCC for circulation will go to the operating cash desks of commercial banks, from where they will be issued to clients of these banks, i.e., they will go either to the cash desks of enterprises or directly to the population.

Thus, cash is transformed from non-cash money held in deposit accounts and represents an integral part of the money supply created by commercial banks as a result of the action of the bank multiplier.

Test questions and assignments

(from Latin emissio - release) - release of money and securities into circulation. Right to emissions central (national) and other state banks have money.

In the Russian Federation, according to the Constitution (since 75), monetary emission is the exclusive right of the Bank of Russia. Cash is issued on a credit basis in accordance with the needs of economic turnover. The size of the issue of money or its withdrawal from circulation is established by the cash plan of the Bank of Russia. Monetary economics consists of issuing and withdrawing banknotes from circulation (bank notes and metal coins), organizing their production, and regulating the money supply in circulation.

The right to E. securities is based on general civil legal capacity and belongs to the state and legal entities. Accordingly, state (municipal) and private securities securities are distinguished. State (municipal) securities market serves as a way to mobilize financial resources to cover the budget deficit and further socio-economic development of the country. The state, represented by the government and the authorized executive body, issues securities in the form of government loans, government treasury obligations, government short-term obligations (see Government loan). The right to issue bonds of internal state (municipal) loans belongs to the relevant bodies of the constituent entities of the Russian Federation and local self-government bodies. The procedure for the issue, circulation and redemption of state (municipal) securities is regulated by the Federal Law “On the Peculiarities of the Issue and Circulation of State and Municipal Securities” 1998.

Private investment includes the issuance of shares and bonds (equity securities) by legal entities (for example, joint-stock companies) and serves as one of the ways to mobilize and increase their capital.

The procedure for emission of securities is established by the Federal Law “On the Securities Market” of 1996 and, as a rule, includes the following stages: the issuer’s decision to issue equity securities, registration of their issue, production of their certificates (for the documentary form of issue) and their placement, as well as registration of a report on the results of the release. When registering a securities prospectus, the E. procedure is supplemented by the following stages: preparation of the said prospectus, its registration, disclosure of all information contained therein and all information contained in the report on the results of the issue.

The rules for securities trading are contained in the securities trading standards approved by the Federal Commission for the Securities Market.

An issue is the release into circulation of new banknotes, securities or shares.

Description of the emission process

This procedure involves not only the direct printing of new monetary units, but also an increase in the existing money supply in the form of cash and in non-cash form. The release of funds into general circulation is carried out daily. This happens during banking and cash transactions, when financial institutions issue cash from cash registers to their clients. We are talking about paying wages or loans.

Among other things, old banknotes can be additionally replaced with new ones. It should be noted that this is solely within the competence of the central bank. Regarding the issuance of non-cash money, this occurs after the issuance of loans to its clients in non-cash form.

It should be emphasized that not every issue of banknotes into circulation contributes to an increase in the total money supply on the market. This means that such a procedure will not constitute an emission. In particular, this is due to the fact that simultaneously with the issuance of new monetary units and the conduct of various cash transactions, financial tokens are returned to banks.

Cash issuance is balanced by accepting cash through, and when issuing loans, the procedure for repaying previously issued loans occurs. This helps to establish balance in the overall cash flow. The issue will be observed only if the release of new banknotes into circulation can exceed the number of financial units returned to banks.

Issue and cash flow

The issue is strictly coordinated by law. Carrying out this procedure without prior agreement with the relevant authorities is strictly prohibited. Only the central bank of a particular state is competent to carry out such activities.

As for the general monetary turnover, it consists of non-cash money and cash.

• Cash can be represented by paper bills and small change.
• Non-cash funds are in accounts in banking organizations. In most cases, they are represented by time deposits or demand deposits.

It is necessary to focus on the fairly close connection between the various variations of money, which ultimately form the overall money turnover. Non-cash money can be converted into cash and vice versa.

Types of emissions

The issue can be budget or credit. Being one of the most basic elements of the financial system, such a phenomenon is a fairly large temporary period of state monopoly. But subject to the development of the banking system, financial institutions of a commercial type issue money, but only credit money - in the form of checks and bills. In turn, the central bank reserved the right to issue banknotes through a bill rediscount system.

A bank issue is also called a credit issue, and a government issue is called a budget or treasury issue.

The state issues new money into circulation to finance expenses. In this way, the state budget deficit can be covered. Banking organizations, in turn, issue new money when issuing loans.

Budget emissions are resistant to inflation, since they are not based on specific needs for financing economic growth. Credit and banking issues are also non-inflationary in nature, which has a direct connection with the need to expand the economy.