State Credit

A state loan is an economic relationship , the subjects of which are the state, legal entities and individuals.

The possibility of the state turning to cover its own expenses by attracting free monetary resources of the population and economic structures arose together with the formation of the conditions of a market economy. This is the essence of public credit.

The state loan is characterized by all the mandatory conditions inherent in any type of lending: repayment, pay and urgency.

The greatest need for the development of this kind of credit relations arises in the context of a budgetary shortage of funds. Then the state refers to attracting the funds of enterprises, as well as individuals, by selling state securities of a high degree of reliability.

Terms of payment of a state loan can not exceed 30 years. At the same time, the state can act as a borrower, a lender, and at the same time a guarantor. In most cases, the state acts exactly as a borrower of funds. Much less often - as a creditor, when it provides legal and physical persons with loans. In the same cases, when it assumes responsibility for the fulfillment of obligations to repay loans, the state is the guarantor.

The main tasks that the state credit is called upon to solve: the regulation of microeconomics; Regulation of macroeconomics; Regulation of monetary policy and financial condition of the country; The search for finance to cover budget expenditures.

The state credit has the following objectives: equalizing the conditions for the economic development of the regions; Financing of budget deficit; Support of municipalities; Assistance to the main economic sectors.

The state credit performs a number of functions: accounting; Control; Redistribution (between budgets of different levels of the country); Regulating (ensuring the effectiveness of the use of raised funds).

Often, the functions of state financing are reduced to two main ones: regulatory and fiscal. It is through the fiscal function that centralized money funds are formed and the budget deficit is financed.

Goskredit forms both internal and external assets. This type of loan capital can provide the subjects of the state, as well as foreign states.

Forms of public credit are distinguished as follows:

- on the subject of loan relations (loans are placed by central and local authorities)

• Centralized
• Decentralized;

- by placement or receipt

• Domestic (domestic)
• External (provided by IBRD, IMF and other international lending institutions);

- by maturity

• Short-term (not more than one year)
• Medium-term (from one to five years)
• Long-term (more than five years).

The concept of public debt has a direct relation to the concept of a state loan. The formation of public debt occurs as a result of borrowing and the provision of state guarantees. The growth of the country's accounts payable leads to an increase in the national debt and vice versa. The state debt must necessarily be provided by the state treasury. The government debt is managed by the Ministry of Finance of the Russian Federation and the Central Bank.

In general, the public debt is the result of the activities of the executive state authorities of the country with legal entities and individuals (both residents and non-residents of the country), executive bodies of other countries and international financial organizations with the goal of forming a fund for meeting the financial needs of the country.