Finance is a structural element of the economic system

The system of finance is represented by an ordered set of some financial relations. Links of such a system are united into three main blocks, each of which has its own internal structure:

- centralized finance, represented by the state budget and extra-budgetary funds, state credit and various funds (personal and property insurance), as well as the stock market;

- Decentralized finances belonging to commercial entities, financial intermediaries and non-profit organizations;

- personal finances (households).

Thus, finance is an economic category that is a structural element of the corresponding system, each link of which can be characterized by special methods of formation with the subsequent use of monetary funds. Each link has a certain role in social production.

For example, centralized finance is a tool for general regulation of the national economy. With the help of this tool, resources are mobilized in the budget with their subsequent distribution and redistribution between individual industries, economic regions and specific population groups.

Decentralized finance is a mechanism for regulating social and economic relations between business entities. It is on their condition that the financial state of the state depends, due to the formation of most of the resources in this part of the economy.

And, finally, personal finance is a relationship in terms of money between citizens who live together and conduct a common household. Households, in contrast to the family, include, in addition to relatives, also people who contribute in whole or in part to their budget. Also, the formation of such finances can be carried out by one person who is able to provide for himself financially.

Economy and finance are two categories that closely interact with each other. So, it is in finance that relations in the sphere of economy are expressed that are associated with the formation of sources of financing for various sectors of the economy. It is impossible to forget about the need to finance such spheres as production, circulation and households.

Finance at enterprises is a combination of certain economic relations that arise in the actual money turnover in the process of formation, with the subsequent distribution and use of funds of financial resources of economic entities (we are talking about decentralized finances). This is quite an independent financial link, capable of servicing material production, as well as creating GDP.

Finance as an economic category depends on the relationship in the middle of the system itself. Despite a certain delineation of individual links with the methods used and the forms of formation and use of monetary resources, the financial system is characterized by unity because the single resource source of all its links lies at the basis.