Percentage channel of the transmission mechanism...

Prospects for improving monetary policy

Analysis of evolutionary trends in the monetary policy of developed countries and their impact on the monetary policy of Russia

The evolution of the activities of central banks over the past 50 years requires close attention; it is necessary to constantly monitor institutional changes both in the internal and external environment. Institutional factors play an important role in the study of central bank structure and performance. Currently, central banks have become more open and it is possible to analyze their activities.

Having studied the position and policies of central banks in industrialized countries, we can talk about a number of common features inherent in them. Similarities begin to emerge during the development of central banks in the post-war period: tendencies to keep inflation at a certain level, setting interest rates over decades. Siklos, Pierre L. The Changing Face of Central Banking: Evolutionary Trends since World War II. New York: Cambridge University Press, 2003.

Also during the analysis, it became obvious that contradictions between central banks and foreign governments occurred constantly. The goals and policies of central banks, or both, remained controversial, and the issue of central bank autonomy remained an important issue. Economic activity was undoubtedly a direct cause for any conflicts. This was especially acute during periods when the economy was under stress. But even if conflict situations were solved, the main problem of their occurrence was the lack of clear goals of monetary policy.

For the past 50 years, it has been thought that at least three “pressures” act on monetary policy: political pressures associated with elections or underlying changes in government; institutional pressures associated with the statutory functions that the central bank describes; state relations and international pressures that arise from political decisions abroad.

Therefore, central banks foreign countries Most have responded to shocks to inflation and unemployment by raising and lowering nominal interest rates. But changes in interest rates did not fundamentally change the situation, since there were many other factors influencing monetary policy.

According to American economist Siklos, overall inflation trends across countries have been viewed in relation to factors such as changes in the exchange rate regime and the widespread adoption of inflation targeting in 1990. Additionally, Siklos points out that “average inflation rates across countries are lower in the 1990s than in the 1960s, while average nominal interest rates are, on average, higher in the 1990s than in the 1960s.” years. Although this does not mean that monetary policy has become too tight. Siklos, Pierre L. The Changing Face of Central Banking: Evolutionary Trends since World War II (New York: Cambridge University Press, 2003).

Difficulties in the response of central banks to changes in the country also arose due to the incomplete use of monetary policy instruments, such as exchange rate policy, as well as the rather slowly changing nature of the government's attitude towards the central bank.

The period from 1960 to 1990 is one of the experimental periods when different monetary policy regimes were applied in many countries. Overall, the trend has been towards greater flexibility in the conduct of monetary policy within constraints, in order to achieve the objectives and positive economic outcomes for which central banks are responsible.

Thus, to make central banks more accountable, it was established that they must maintain accounts and disclose information about their activities. This was a key contribution to creating favorable conditions for the development of monetary policy of central banks.

Thus, monetary policy was the most flexible instrument of economic policy of governments of various countries, as well as the most powerful. However, when World War II ended, the experiences of the 1920s and 1930s showed a deep distrust of monetary policy, but rather of central banks themselves. Many governments have sought stability after decades of fluctuations in price levels and other macroeconomic indicators. But there was no coordination in politics. While fiscal policy dominated as the main policy instrument, a new view was put forward that the central bank should take center stage in the implementation of economic policies, since fiscal policy was not proactive in its decisions and measures taken, and also failed to achieve assigned tasks.

The monetary policy of the Bank of Russia has consistently acquired features characteristic of the policies of central banks of countries of the world community, whose economies are developing according to market laws.

As for the current state and changes in monetary policy in the context of financial globalization, which is one of the most important components of the process of globalization of the world economy, it has a significant impact on the development of the national economy and the conduct of national monetary policy. John B. Taylor. Implications of Globalization for Monetary Policy. Stanford University. 2006.

Financial globalization has created new challenges for national monetary policy, limiting the space for its independent implementation. Financial globalization is reflected in the emergence of new trends: the emergence of speculative “bubbles”, the growth of cross-border flows and financial innovations, disintermediation, untimely response of central banks to ongoing changes in the economy, changes within the system of financial intermediaries, multicurrency, changes in the state of the economy. Nazarenko Julia. Impact of globalization on monetary policy in Europe//Relevant issues of development of the world economy. 2011, September.

First, the growth of cross-border capital flows increases the risks of speculative bubbles in asset markets and the scale of their negative consequences. Vivid examples are a series of financial crises in the largest emerging markets from 1994 to 2001 in Mexico, Southeast Asia, Russia, Brazil, Turkey, Argentina; the decline in stock markets of developed countries in 2001-2003; the recent mortgage crisis in 2007 in the US, which led to turmoil in global financial markets. Golovnin M.Yu. Financial globalization and restrictions on national monetary policy // Economic Issues No. 7.2007.

The state of modern financial markets, characterized as metastability (potential instability), causes a predisposition to shocks. Lack of transparency in the use of many market instruments has increased the degree of overall risks. Financial institutions did not neutralize the imbalances that arose, but accumulated, strengthened them, transmitted them to the real sector and, in the end, the risks became systemic. Kryuchkova I.P. Globalization: risks and challenges for monetary policy // Banking. 2011. No. 7.

Secondly, as a result of globalization processes, under the influence of the growth of financial innovation, the functioning of national financial markets is changing, and the uncertainty of the impact of measures taken by the central bank on macroeconomic variables increases.

Globalization has changed world markets, strengthened their interconnections, and the lack of mechanisms for effective monitoring and prevention of systemic risks became a catalyst for the global financial crisis. It is systemic risks that increase the instability of the global financial system and force central banks and governments of developed and developing countries to take steps to prevent them and maintain stability. Kryuchkova I.P. Globalization: risks and challenges for monetary policy // Banking. 2011. No. 7.

Chairman of the Board of the European Central Bank Jean-Claude Trichet noted that the key factors in the formation of such risks were the opacity of financial structures, vulnerability to the “contagion” of the domino effect and procyclicality, which acts as an amplifier of trends. Jean-Claude Trichet. Risk and monetary policy//BIS Review. 2010. No. 29 The need for financial resources increases and decreases following the phases of the economic cycle. However, the supply of these funds does not simply reflect demand, but often reinforces the cycle.

Thirdly, the reduction in the difference in interest rates between countries leads to changes within the system of financial intermediaries and institutional investors begin to play an increasingly important role. Okina K., Shirakawa M., Shiratsuka S. Financial Market Globalization: Present and Future // Monetary and Economic Studies. 1999. December. P. 6.

Fourth, central banks in practice respond to significant changes in financial asset prices ex post by providing assistance to financial institutions that incur significant costs as a result of stock market downturns. Either there is an incorrect assessment of risks or the consequences of shocks for the financial system are not fully assessed, or conclusions about the rules of operation are not entirely correct modern markets and their self-regulation in a changed global world. Thus, in the context of globalization, national sovereignty in the field of monetary policy is partially lost. Lebedev A.E. Financial globalization: general characteristics and challenges for Russia. M.: IMPEPI RAS, 2003. P. 18. In order for it not to be completely lost, it is necessary to take into account the influence of the dynamics and global financial markets on the national economy in order to build theoretical models of the functioning of the monetary sphere and its regulation in the new conditions.

Fifthly, in the context of globalization, important qualitative changes are also taking place within the system of financial intermediaries: in the financial markets themselves, the importance of investment banks and institutional investors is growing. These groups of financial intermediaries effectively link economic agents around the world, while traditional commercial banks expand globally to a much lesser extent. Golovnin M.Yu. New challenges to monetary policy in the context of globalization: financial crises // International Economics. 2009. No. 6.

Sixthly, multicurrency is noted as one of the problems for national monetary policy. Multicurrency refers to the absence of a single world currency and a single monetary policy and the instability and instability inherent in the exchange rates of leading currencies in a liberalized global economy, and for other countries - the dependence of the stability of their currencies on international competitiveness and the monetary policy of countries with “freely usable currencies” ".

Seventh, according to foreign economist S. Mishkin, the growing integration of global products, labor and financial markets significantly changes the state of the economy, which complicates the activities of monetary policy to stabilize money circulation. Frederic S. Mishkin. Globalization, macroeconomic, performance, and monetary policy. // National bureau of economic research. 2008. April. (www.nber.org/papers/w13948)

Having examined the impact of globalization on monetary policy, foreign economist Sutherland A. concluded that although financial globalization influences and changes the external environment within which monetary policy operates, it cannot change the main goals of optimal monetary policy. Alan Sutherland. Financial Globalization and Monetary Policy // International Monetary Fund. 2007.

Modern theoretical studies of the impact of financial globalization on monetary policy focus mainly on the issues of its impact on inflation rates within the country and on the transmission mechanisms of monetary policy. The general conclusion of most researchers is that globalization and global trends in the conduct of monetary policy have a rather downward impact on the global inflation rate (this pattern is largely empirical in nature, and its stability still requires confirmation) and contributes to the equalization of interest rates between countries, which limits the possibility of monetary policy influencing the state of the economy through this instrument.

To increase the effectiveness of monetary policy in the country, it is necessary to solve a number of preliminary tasks:

• 1. Promoting the development of a national banking system and stock market that are not critically dependent on foreign capital, which will allow them to more flexibly respond to signals from the central bank and form effective transmission mechanisms of monetary policy.
• 2. Continued development of monetary policy instruments that began during the crisis, in terms of improving open market operations and admitting a wider range of counterparties to central bank operations.
• 3. Maintain exchange rate controls to promote economic diversification and prevent large fluctuations in capital flows. At the same time, to achieve these goals, it is not necessary to strictly regulate the exchange rate, which is also associated with costs.

Meanwhile, it seems important that monetary policy focuses on tracking a number of macroeconomic indicators, including, along with inflation rates, exchange rate dynamics, cross-border capital flows, and economic growth rates, without allowing them to deviate significantly from critical values. Such a regime can be conditionally characterized as a limited discretionary monetary policy.

In addition, in the longer term, projects related to expanding its role in international monetary and financial relations can help improve the efficiency of Russia’s participation in the processes of financial globalization. We are talking primarily about projects for an international financial center and giving the ruble the status of a regional currency.

It is also necessary to abandon obviously unattainable goals such as creating a single currency or a single market for financial services on the model of the euro area and the EU. Monetary and financial interaction can be aimed at solving specific problems: harmonizing monetary policy regimes; assistance in regulating the dynamics of exchange rates, including currency swap transactions; the formation of certain segments of the regional financial market (for example, the market for government or corporate bonds) by removing restrictions that impede this and harmonizing regulatory standards.

To summarize, we can say that in modern conditions of globalization of the entire economy as a whole, a qualitatively new paradigm of monetary policy is needed, since the results of national monetary policy are becoming less predictable; the degree of predictability of the environment itself decreases; national monetary policy faces limitations both in its objectives and in the instruments available for its implementation; the degree of responsibility for an insufficiently thought-out monetary policy increases, which can lead to an outflow of capital from the country, a financial and economic crisis.

RUSSIAN ECONOMY: PROBLEMS AND OPINIONS

MONETARY POLICY OF ECONOMICALLY DEVELOPED COUNTRIES: CHOOSING A PATH AFTER THE CRISIS

V. I. MELNIKOVA, graduate student

Russian State Trade and Economic University

Depending on the state of the economic situation, restrictionist and expansionist policies are distinguished. Restriction is accompanied by an increase in taxes, a reduction in government spending, as well as other measures aimed at curbing inflation. Expansionary monetary policy is characterized by expanding the scope of lending, weakening control over the increase in the amount of money in circulation, reducing tax rates and lowering interest rates.

Each type of monetary policy is characterized by its own set of instruments and a certain combination of economic and administrative methods of regulation.

A restrictive (or restrictive) policy used to reduce the money supply in a country and fight inflation is a "dear money" policy. In a situation where the economy faces excessive spending, which gives rise to inflationary processes, the Central Bank must try to reduce overall spending by restricting or reducing the money supply. To solve this problem, it is necessary to reduce the reserves of commercial banks.

This is done as follows. The central bank must sell government bonds on the open market in order to reduce the reserves of commercial banks. Then it is necessary to increase the reserve ratio, which automatically frees commercial banks from

excess reserves. The discount rate is raised to reduce the interest of commercial banks in increasing their reserves by borrowing from the Central Bank.

As a result of this policy, banks find that their reserves are too small to meet the statutory reserve ratio, that is, their current account is too large in relation to their reserves. Therefore, to meet the reserve ratio requirement when reserves are insufficient, banks should maintain their current accounts by refraining from issuing new loans after old ones are paid off. As a consequence, the money supply will decrease, causing the rate of interest to rise, and a rise in the interest rate will reduce investment, reducing aggregate spending and limiting inflation.

The goal of policy is to limit the money supply, that is, the availability of credit and its costs, in order to lower costs and contain inflationary pressures. Consider Fig. 1.

If the level of net national product (NNP), characterized by full employment and no inflation, is equal to $450 billion, then there is an inflation gap of $5 billion.

That is, at a 470 billion NNP level, planned investments will exceed savings, and, consequently, total expenses will exceed the total production volume in the country by $5 billion. A reduction in the money supply from $150 to $125 billion will increase the interest rate from 8 to 10, as

Savings and investments, billion US dollars

Real interest rate, % 16 14 12 10 8 6 4 2

shown in Fig. 2, and will reduce the volume of investments from 20 to 15 billion dollars, as noted in Fig. 3.

If we move down the investment graph in Fig. 1 from 1p1 to 1p3 by an amount of $5 billion, then this will make it possible to level out the planned investments and savings, and, consequently, total expenses and the total volume of production in the country - at the level of 450 billion NNP, as well as eliminate the initial 5 billion inflation gap.

Expansionist policy (policy of “cheap” money) is carried out in order to increase the volume of investment in the economy and makes credit cheap and easily accessible. The US Federal Reserve resorts to a policy of “cheap” money if the equilibrium NNP is accompanied by significant unemployment and underutilization of production capacity.

To increase the money supply, the US Federal Reserve Banks take the following actions in a certain combination:

First, the Central Bank must purchase securities on the open market from the public and from commercial banks;

Secondly, it is necessary to lower the discount rate;

Thirdly, the standards for reserve contributions need to be changed.

As a result of the measures taken, the excess reserves of the commercial banking system will increase. Since excess reserves are the basis for increasing the money supply by commercial banks through lending, we can expect that the money supply in the country will increase. An increase in the money supply will lower the interest rate

Real interest rate and expected rate of net profit, %

16 14 12 10 8 6 4 2

Real NNP, billion US dollars Fig. 1. Dynamics of equilibrium NNP

0 50 100 150 200

Supply and demand

money, billion dollars

Investment size,

billion dollars

Rice. 3. Dynamics of demand for investment

Rice. 2. Money market dynamics

rate, causing an increase in investment and an increase in equilibrium NNP. The amount by which NNP will increase depends on the degree of investment growth and the size of the income multiplier.

For example, if the full-employment NNP is $490 billion, then an increase in the money supply from $150 billion to $175 billion will lower the interest rate from 8 to 6, as noted in Fig. 1, and will increase the volume of investment from 20 to 25 billion dollars, as shown in Fig. 3.

Shift upwards of the investment graph in Fig. 1 from 1p1 to I by an amount of 5 billion dollars. with a corresponding multiplier of four, it will increase the equilibrium NNP from $470 billion. to the desired 490 billion full employment level.

Restrictive monetary policy is aimed at implementing measures that regulate the activities of the monetary system by limiting the volume of credit operations of commercial banks and increasing the level of interest rates. Its implementation is usually accompanied by an increase in taxes, a reduction in government spending, as well as other measures aimed at containing

inflation, and in some cases - to improve the balance of payments. Restrictive monetary policy can be used both to combat inflation and to smooth out cyclical fluctuations in business activity.

Monetary policy of both expansionary and restrictive types can be either total or selective. With a total monetary policy, the measures of the Central Bank apply to all institutions of the banking system, with a selective one - to individual credit institutions or their groups, or to certain types of banking activities. Selective monetary policy allows the Central Bank to exert selective influence in a given direction. When carrying out it, it is practiced to use the following set of tools or various combinations thereof:

Establishing limits on accounting and re-accounting operations (for example, by industry, region, etc.);

Limitation of certain types of operations of banks (their groups);

Setting margins for various financial and credit operations;

Regulation of the conditions for issuing certain types of loans to various categories of borrowers;

Establishment of credit ceilings, etc.

Selective policies are resorted to when financial markets are poorly developed, when they are unable to provide sufficiently effective redistribution Money and investments in the right directions. On the one hand, such a policy contributes to a significant change in credit flows to priority sectors of the economy, on the other hand, it impedes the normal functioning of the credit and financial system due to the creation of preferential lending conditions for certain regions, industries, and areas of activity. By establishing quantitative restrictions on loans directed to priority sectors, as well as preferential interest rates on them, selective policy makes it necessary to subsidize priority sectors of the economy through loans from international financial institutions and budget funds, which inevitably gives rise to new problems in the credit and financial sphere.

The Central Bank selects the type of monetary policy pursued, and, accordingly, the set of instruments for regulating the activities of commercial banks, based on the state of the economic situation in each specific case. Designed based on

such a choice, the main directions of monetary policy are approved legislative body. In this case, it is necessary to take into account the time lag between the implementation of one or another monetary regulation measure and the manifestation of the effect of its implementation. Efficiency of application various types Monetary policy is determined by the extent to which the destabilization of money circulation is caused by purely monetary, and not general economic and political factors.

The main directions of the unified state monetary policy of the Central Bank of the Russian Federation for the coming period are being formed in the difficult conditions of a deep general economic crisis. This situation arose under the influence of a number of external and internal factors:

Exacerbation of fiscal problems associated with low levels of tax collection, increasing arrears of wages and social benefits, rising costs of servicing and refinancing domestic public debt;

The growth of mutual non-payments and the actual bankruptcy of many enterprises in the real sector;

Deterioration in the balance of payments due to increased costs of servicing external public debt and the maintenance of an overvalued ruble exchange rate, predicted changes in the situation on world energy markets;

The deterioration of the situation in global financial markets, expressed in the outflow of international capital from countries with emerging markets.

For example, in the development of the 1998 crisis, two stages can be distinguished, during which monetary policy was different and developed in accordance with the general economic situation.

At the first stage, the crisis was predominantly hidden, and it was possible to counter it by increasing public debt and spending the country’s gold and foreign exchange reserves. During this period, refinancing rates on the financial market were repeatedly increased, for pawn loans and for attracting funds to Bank of Russia deposits. It was during this period that it became obvious that government short-term obligations ceased to be a tool intended to attract funds to the federal budget, and began, on the contrary, to absorb funds from the budget. As a result, the Government of the Russian Federation decided to abandon borrowings on this market and re-register

government securities (GKO-OFZ) with a maturity date of December 31, 1999 into new securities.

The second stage of the crisis proceeded in an open form and covered all aspects of economic life in Russia: the Government was unable to service the public debt and fulfill its current obligations, financial markets practically ceased to function, the country’s gold and foreign exchange reserves were at an extremely low level, and a systemic crisis arose in the banking sector . The subsequent devaluation of the ruble determined the new state of the economy, as there was a sharp jump in inflation, and the population lost confidence in the financial system and banks.

The crisis has led to new problems in the country's economy:

Deterioration of conditions for fulfilling obligations on external debts;

Slowing the pace of transition to economic growth;

The need to find additional funds to improve the banking system and financial markets;

Growing social tension in society.

In this situation, there was a change in the priorities of monetary policy due to the impossibility of giving preference to any of its types - neither restrictive nor expansionary. Monetary policy has become balanced, which presupposes adherence to strict financial discipline by all economic agents, a responsible approach to regulating the money supply and the utmost intensification of work in the field of institutional reforms under the conditions of a floating exchange rate regime.

The main advantage of monetary policy carried out under a floating exchange rate is that it eliminates the risk of imbalances associated with the mismatch of the exchange rate with changing macroeconomic conditions, a factor that has a serious negative impact on economic development. Under a floating exchange rate regime, the Central Bank has the opportunity to increase the saturation of the economy with money.

The market determination of the exchange rate, which does not require the Central Bank's foreign exchange reserves to maintain, allows the bank to pay more attention to the problems of the real sector of the economy. Under these conditions, opportunities arise for increasing the positive balance of the current account, improving the plan

the balance sheet as a whole, as well as to begin work on restoring gold and foreign exchange reserves, which is very important in the post-crisis period.

After the introduction of the floating exchange rate regime, the balances of funds in correspondent accounts of commercial banks also increased significantly, which contributed to the gradual recovery from the crisis of bank non-payments. The money supply increased slightly, and most importantly, this was not accompanied by an increase in inflation.

But the reason that the Russian economy never reached a trajectory of sustainable economic growth was not the budget deficit or the lack of budget revenues, but the crisis of the banking system itself.

In 2009-2010 The world economy has entered a very difficult economic period. Despite the fact that the causes of the global crisis are related to the functioning of the American financial system, Russia, like most countries in the world, was drawn into this process. The modern crisis has a number of features both within national economies and in the global economy. It is usually compared to the crisis of 1929-1933. However, it occurs in new historical conditions - at the stage of economic modernization based on intensive scientific and technological progress, as part of the implementation of the new economy model.

In connection with the financial crisis in world markets, problems arose among Russian credit institutions. In fact, the period of “cheap” and “long” money, which leading banks such as Sberbank, VTB and Gazprombank, received in the form of loans from abroad and then resold to medium and small banks on the interbank lending market, has ended for them. In such a situation, many banks, having lost available sources of lending, are forced to increase lending rates and tighten requirements for borrowers. Including a significant blow to the nascent domestic mortgage industry. Citizens of the Russian Federation have to pay for the failure of US mortgages and the mistakes of Russian banking risk managers.

In crisis conditions, the countries of the European Union (EU) took measures to develop a European version of concerted efforts to overcome the crisis. At the same time, considerable discrepancies emerged. If in the USA the model of George W. Bush was based on neoliberal and monetarist postulates in the form of primarily pumping public funds into banking and entrepreneurial structures, then in Europe President N. Sarkozy came up with a difficult-to-implement model of “entrepreneurial capitalism”, refusal

from the model of “financial capitalism”, i.e. limiting the omnipotence of financial capital, rejecting economic uncontrollability, fraught with crises.

The situation in the Russian Federation is distinguished by a number of features. In the pre-crisis period, as a result of an unprecedented rise in prices on world hydrocarbon markets, a significant reserve was created in Russia. However, this did not provide reliable protection against the crisis.

Firstly, the global nature of the crisis was not fully taken into account. The unprecedented rise in oil prices has created the illusion that they will remain the same for the foreseeable future.

Secondly, close credit ties between the largest Russian banks and corporations and foreign creditors have led to an increase in external debt. Meanwhile, in 2008-2009. its repayment dates have arrived. In the context of depreciation on securities exchanges and decreased liquidity, borrowers faced the threat of default.

Thirdly, imbalances between production and sales and the dynamics of demand within the country grew.

Fourthly, the structure of production in Russia remains backward: the process of economic modernization on a mass scale has practically not been started, the raw material orientation of the economy remains.

Russia, Ukraine and Kazakhstan experienced the impact of the global financial crisis later than Western countries, only in the fall of 2008. Russia was the first to feel the impact of the crisis. Already in September, indicators of economic dynamics worsened somewhat, although they still remained better (index values ​​above zero) than in Western countries (Great Britain, France, Germany, USA, Canada). In October, the economic situation deteriorated sharply in Russia and Ukraine, and the values ​​of the anti-crisis efficiency index dropped significantly below zero.

In Russia, Kazakhstan and Ukraine, exports and the volume of foreign trade in general, and stock indices decreased significantly more than in Western countries (almost twice). The problem persists in all CIS countries tall consumer prices. As of March 2009, the increase in the unemployment rate in Kazakhstan compared to March 2008 was 2.9%. Only Germany has less - 2.4%. In Russia and Ukraine the figures are completely different: 53.8% and 34.8%, respectively, although we have not yet caught up with the anti-leader - in the USA 66.7%. Gold and foreign exchange reserves in Kazakhstan were in March 2009 only 1.9% less compared to March 2008, while in Russia they were by 25.1%, by

Ukraine - by 23.6%. Western European countries are divided into two groups according to this indicator: in Germany, Canada and the USA, their dynamics indicator is close to zero, and in France and Great Britain it is close to Russian values.

The most difficult situation affecting all economic and social problems, is developing in the sphere of financial and monetary policy. At the end of the first half of 2009, inflation in Russia compared to June 2008 was 11.9%. In the UK this figure is 1.8%, Germany - 0.1%, Italy - 0.5%. A number of developed countries (USA, Canada, France, Japan, China) experienced slight deflation. Moreover, in this situation, another deviation from the classical theory of monetarism appeared, which believes that the dynamics of consumer prices is directly dependent on the amount of money in the economy.

The main driver of price growth was the devaluation and increase in tariffs of natural monopolies, once again confirming the dominance of cost inflation over demand inflation in the Russian Federation. This is very important to take into account when making decisions in the economic sphere, for fear of either “strangling” the economy by the lack of sufficient money, or injecting an excessive amount of money supply and accelerating the inflation flywheel.

Assessing the development of the Russian economy and monetary policy in 2009, the Bank of Russia notes that the conditions for the development of the Russian economy in January - July 2009 were significantly worse than in 2008. Under the influence of crisis phenomena in the global economy and a decrease in demand for Russian export products in conditions of lower world oil prices than in the previous year and net outflow of private capital, the volume of GDP in the first half of 2009. decreased by 10.4%.

For sustainable economic growth, the real sector of the economy needs access to “long and cheap” money, and financial institutions are not ready to issue such loans in conditions of high inflation and the threat of a new devaluation.

The global financial and economic crisis has presented the world community with new tasks related to the need to harmonize and coordinate anti-crisis efforts on an international scale in order to determine effective methods for overcoming the crisis and measures to prevent its recurrence in the future. Despite the difference in interpretation of the causes of the crisis, its consequences and countermeasures, a common position has been developed - awareness of the seriousness of the current situation and the need to reform the existing international financial system.

us, because it does not meet the requirements of the world economy in the context of its globalization.

At the meetings, a decision was made to reform the IMF and the World Bank, to which the G20 countries will allocate up to $5 trillion to fight the crisis. The need to tighten the system of regulation of financial markets was noted. The leaders of the world's largest economies agreed to maintain anti-crisis measures until the global economic recovery becomes more stable, to introduce new rules for regulating the banking system by the end of 2012, to establish criteria for bonuses for top managers of banks and corporations, etc.

According to experts from the investment company Troika Dialog, the Russian economy hit rock bottom back in January 2009, but the current monetary policy limits economic growth, so the Bank of Russia should accelerate rate cuts and reduce foreign exchange interventions. Undoubtedly, in these circumstances, the state’s implementation of a reasonable monetary policy and the skillful use of its instruments will contribute to the stabilization of the economy and a gradual recovery from the current crisis situation.

Thus, the improvement of the banking system is the main condition for conducting an effective monetary policy. The crisis events showed the complexity of forecasting the volume of ruble money supply in the conditions of the current economic uncertainty.

The dollarization of the Russian economy makes it especially important to use in monetary policy not only the patterns of changes in the dynamics of the ruble assets of economic agents, but also the movement of their foreign currency accounts. Therefore, based on the balance of payments forecast, it can be assumed that the export external sector will play an important role in the process of forming the money supply.

In the conditions of maintaining the price level for export goods and the implementation of effective measures of foreign exchange regulation and foreign exchange control, we can expect an increase in the positive account balance for the current transactions of Russia's balance of payments. This will create the basis for increasing the foreign exchange reserves of the Central Bank and will have an impact on the parameters of money supply growth,

Expansionist policy Restrictionist policy

Problem: Unemployment and Recession Problem: Inflation

The Federal Reserve buys bonds, lowers the reserve ratio, or lowers the discount rate. The Federal Reserve sells bonds, increases the reserve ratio, or increases the discount rate.

Money supply increases Money supply decreases

Interest rate falls Interest rate rises

Investment costs increase Investment costs decrease

Real NIP increases by an amount that is a multiple of the increase in investment Inflation decreases

Rice. 4. Comparison of types of monetary policy

and will also reduce the Government's need for borrowed funds.

From all that has been said, we can conclude that there are two main classification types of monetary policy that economically developed countries use: restrictive and expansionary. Let's look at their main differences (Fig. 4).

Thus, expansionary monetary policy (or the policy of “cheap” money) is characterized, as a rule, by expanding the scope of lending, weakening control over the increase in the amount of money in circulation, reducing tax rates, and lowering the level of interest rates. The restrictive policy (or the policy of “expensive” money) is aimed at tightening conditions and limiting the volume of lending operations of commercial banks. It involves and is accompanied by an increase in taxes, a reduction in government spending, as well as other measures aimed at curbing inflation, and in some cases, at improving the balance of payments.

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4. Nikolaev I., Marchenko T., Titova M. CIS countries and the global crisis // Society and Economics. 2009. No. 6.

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Introduction........................................................ ........................................................ ........... 5

Chapter 1. Theoretical basis monetary policy................................... 10

1.1 Ideas about monetary regulation of the economy

various economic schools......................................................... ... 10

1.1.1 Neoclassical school.................................................... ............................ 10

1.1.2 Keynesian model of monetary regulation.................................. 12

1.1.3 Monetarist quantity theory of money.................................................. 17

1.2 Mechanism and instruments of influence of the Central Bank

on the supply of money in the economy................................................... ............... 21

1.2.1 Credit issuance mechanism.................................................... ................... 21

1.2.2 Forms and instruments for regulating the supply of money.................................. 24

1.3. Objectives and effectiveness of monetary policy.................................... 28

1.3.1 System of monetary policy objectives..................................................... 28

1.3.2 Intermediate goals in various concepts

monetary regulation................................................................... ...... 29

1.3.3 Inconsistency of monetary regulation.................................... 32

1.3.4 The transmission mechanism of monetary policy and its role... 36

Chapter 2. Monetary policy in the transition economy of Russia....... 39

2.1 Factors influencing monetary policy.............................................. 39

2.2 Features of the Russian banking system.................................................... 40

2.3 Specifics of monetary policy objectives.................................................... 43

2.4 The inconsistency of monetary policy in the 90s.................................... 46

2.5 Methods and tools.................................................... ........................... 52

2.6 Features of post-crisis monetary policy................................. 56

Chapter 3. Unified state monetary policy in the 21st century...... 60

3.1 Goals and results of monetary policy in 2001.................................. 60

3.2 Monetary policy goals for 2002.................................................... 64

Conclusion................................................. ........................................................ ..... 74

Bibliography................................................................ ........................... 79

Annex 1................................................ ........................................................ .. 81

INTRODUCTION

In a modern market economy, there are many socio-economic problems that are beyond the control of the market and require government intervention. Strictly speaking, the concepts of “market economy” or “market system” are abstract; they represent a simplified picture of reality, in which many of its aspects are missing. Neither now nor ever before there is or has been a single country whose economy would function only through the market mechanism. Along with the market mechanism, the mechanism of state regulation of the economy has always been used and is now used to an even greater extent.

The market is not an economic system as a whole, but only one of the mechanisms for coordinating the orders of economic entities. This mechanism was never, even in the time of A. Smith, the only one. At all times, it was used together with the mechanism of state regulation. Only the proportion of their use has changed and is changing. Moreover, both mechanisms are based on the traditions and customs of a given society. And if we use the now accepted terminology, then there are no other economic systems other than mixed ones.

In developed countries with mixed economies, the role of the state in the functioning of the economy is far from the same. It varies in scale, forms and methods of state influence on the economy, and in the readiness of society to accept and support such state intervention in economic life. These differences are due to many objective factors material order, as well as the influence of traditions and ideas characteristic of a given society, which is now determined by such a concept as mentality.

Regardless of the specifics of the economic, cultural, national-historical development of different countries in which a mixed economy operates more or less successfully, regardless of the economic theories that are preferred in these countries, the economic role of the state in them can be represented by the following most important economic functions:

· development of economic legislation, ensuring a legal framework and social climate conducive to the effective functioning of a market economy;

· supporting competition and ensuring the preservation of the market mechanism;

· redistribution of income and material wealth, aimed primarily at providing social guarantees and protecting various social groups in need;

· regulation of resource distribution to change the structure of the national product;

· stabilization of the economy in conditions of fluctuating economic conditions, as well as stimulation of economic growth;

· entrepreneurial activity.

All these functions, on the one hand, are aimed at maintaining and facilitating the functioning of a market economy, and on the other, at adjusting and modifying the actions of the market system, including neutralizing its negative aspects.

The presented list of economic functions of the state indicates that its economic role is by no means limited to the management of the public sector of the economy, that is, to entrepreneurial activity within a certain group of enterprises of which it is the owner. The economic role of the state presupposes its activities in regulating the economy as a whole, all its sectors as a single system. Consequently, denationalization and privatization, which usually mean a quantitative reduction in the public sector of the economy, can be accompanied by both a weakening of the regulatory role of the state and its strengthening and expansion of the economic functions it performs.

In the process of transition from a total state economy to a mixed economy, not only the functions and directions of state influence on the economy, but also the methods of such influence undergo significant changes. As you know, there are two groups of methods of government regulation: direct (administrative) and indirect (economic). And although in a number of specific cases such a division turns out to be largely arbitrary, and sometimes it is simply difficult to carry out, in general, when analyzing a given problem, its use is useful and appropriate.

Financial and credit methods of state regulation of the economy, when considered as a whole, form the monetary policy of the state; it means “a set of measures economic regulation monetary circulation and credit aimed at ensuring the sustainability of economic growth by influencing the level and dynamics of inflation, investment activity and other important macroeconomic consequences.” The proposed work is devoted to consideration of the fundamental aspects of these methods of economic regulation.

From the above definition it follows that monetary policy is not something self-sufficient; it is closely related to other regulatory functions of the state (regulation of investment activities, fiscal policy, support system for small businesses, etc.). However, a comprehensive solution to these problems also contains, to a large extent, administrative regulatory measures, so a detailed consideration of these sections is not provided for in the work.

The relevance of the topic under consideration is determined by the following circumstance. The contradictory, largely unsuccessful experience of reforming the domestic economy has increasingly recently (especially after the financial crisis of 1998) put on the agenda the question of the forms and methods of conducting monetary policy. It is characteristic that serious disagreements in the camp of economists are observed not only regarding the measures proposed for implementation, but even in assessing the current state of affairs. Thus, along with the opinion that the monetary policy pursued by the state since 1995 was extremely tough, but effective, and the reasons for the fall of the ruble turned out to be purely psychological, the belief was expressed that it was the course pursued by the Central Bank that ultimately turned out to be a failure. As confirmation, statistics are usually cited that can be called glaring: the crisis of the summer of 1998 was preceded by a huge reduction in net foreign exchange reserves by $14.6 billion, and by $7.9 billion from May to August 1998. Many authors directly call this policy of the monetary authorities irresponsible.

The purpose of this work is a comprehensive study of financial and credit methods of state regulation of the economy. Realization of this goal requires solving the following tasks:

Studying the theoretical heritage left on this issue by representatives of various economic schools;

Familiarization with the current state of affairs in world practice, in particular with domestic experience in conducting monetary policy in recent years;

Consideration of the main directions for the implementation of this policy in the near future.

The formulation and consistent solution of these tasks determines the structure of the work. A separate chapter is devoted to the consideration of each of them.

It is worth noting that financial and credit methods of state regulation of the economy are discussed both in general systematic courses on economic theory, and in special publications and economic periodicals.

Despite the fact that in some educational publications the problem of state regulation is considered in passing, a number of authors still pay serious attention to it. Against this background, the textbook edited by Kamaeva V.D. (). It combines a detailed theoretical examination of monetary regulation with a deep analysis of domestic practice.

And yet, the issues considered are most fully reflected in specialized publications (Albegova I.M., Yemtsov R.G., Kholopov A.V., ; Kushlin V.I., Volgin N.A., ). Of particular note here is the collective author’s work “State Regulation of a Market Economy” (). The book is devoted to the most important aspects and tools of macroeconomic regulation of market and transition economies, in particular - the evolution and new trends of the state's monetary policy.

Finally, economic periodicals allow you to work with the latest statistical data, as well as the critical opinion of leading domestic economists. In particular, when writing the last chapter of the work, the government program document “Main directions of the unified state monetary policy for 2002”, published in ().

Chapter 1. Theoretical foundations of monetary policy

Monetary policy is currently one of the forms of indirect influence of the state on the economy. It is based on the theoretical ideas of economists about the role of money in the economy and its influence on the main macroeconomic parameters: economic growth, employment, prices, balance of payments. In modern theories, money is increasingly viewed as an active factor in the reproduction process, and the theory of money itself has become a vital part of macroanalysis.

The theory of money (monetarist theory) is a section of economic theory that studies the impact of money and monetary policy on the state of the economy as a whole.

The problem of state regulation of a market economy, including methods of monetary policy, had no practical significance until the 30s. XX century, until the economies of the leading countries of Europe and North America were hit by a devastating crisis.

1.1 Ideas about monetary regulation of the economy by various economic schools

1.1.1 Neoclassical school

Economists of the classical (neoclassical) school of the last third of the 19th - early 20th centuries. firmly believed in an effective self-regulating and self-developing market economy, denied the need for large-scale government intervention in economic processes, and considered money only as a shell for the nominal expression of real values, such as output, income, investment, etc.

They believed that the real volume of production is determined by the main factors of production available to society: labor resources, production capacity, natural resources, i.e. factors that change only in the long term. In particular, many economists of this school believed that output and the velocity of money tend to tend to natural levels and are independent of the influence of money and monetary policy. A change in the amount of money in the economy can only affect the level of domestic prices. Adhering to the quantitative theory of money, a significant contribution to the modernization of which was made by the prominent representative of the mathematical school I. Fisher (1867 - 1947). In economic theory, the mathematical equation of exchange by I. Fisher is well known: MV = PQ, where M is the amount of money in circulation. V - velocity of money circulation, R - price level. Q - level of real output. In this equation, MV characterizes the supply of money in the economy, PQ - demand for money.

Neoclassicists argued that a proportional change in the nominal quantity of money will cause only a proportional change in the absolute price level. Therefore, they concluded that monetary policy was ineffective and called on the government to take care, first of all, of a balanced state budget, avoiding its deficit.

World economic crisis 1929--1933 questioned the basic provisions of neoclassical theory, which virtually excluded the possibility of protracted crises and forced unemployment in a market economy. He also discovered that the classical quantity theory of money and prices, operating on long-term time intervals, was unable to solve the problems caused by the crisis. To combat unemployment by the US government. Great Britain and other developed countries began to use government regulation measures that do not fit into the orthodox neoclassical doctrine.

1.1.2 Keynesian model of monetary regulation

The most famous theoretical justification for large-scale government intervention in a market economy was J. Keynes’s “The General Theory of Employment, Interest and Money” (1936). Keynes revolutionized macroeconomics, radically changing the way economists and governments viewed business cycles and economic policy.

The new economic theory proceeded from the fact that a modern market economy, automatically striving for equilibrium, can fall into a state of equality of aggregate demand and aggregate supply, in which actual output is much lower than potential and a significant part of the labor force consists of the involuntarily unemployed.

Unlike the classics, J. Keynes believed that the economy could be “stuck” for a long time in a situation of low output and chronic unemployment, since due to the inflexibility of prices and wages, there is no mechanism through which full employment would be quickly restored and production capacity would be fully utilized.

J. Keynes saw the reason for the economy falling into the trap of equilibrium under conditions of underemployment in insufficient aggregate demand and believed that the government can influence the state of economic activity using methods of monetary and fiscal policy to change aggregate demand.

In the Keynesian theory of aggregate demand, investment demand is of decisive importance. Fluctuations in investment due to the multiplier effect will cause large changes in production and employment. Among the most important factors determining the level of investment in the economy, J. Keynes identifies the interest rate, since the latter represents the cost of obtaining a loan to finance investment projects. An increase in the interest rate, other things being equal, will reduce the level of planned investment, and consequently, output and employment will fall.

The chain of functional dependencies can be expressed as follows: an increase in the money supply causes a fall in the interest rate, this leads to an increase in investment, and consequently, income and employment. Keynes viewed the influence of interest rates on investment policy as a lever through which monetary conditions affect the economy as a whole. This is why analysis of the money market, where the interest rate is set as a result of the interaction of supply and demand for money, is an important component of Keynesian theory. Revealing the mechanism for changing the interest rate, J. Keynes rejected the classical quantitative theory of demand for money and presented his point of view, according to which money is one of the types of wealth, and the desire of business entities to store part of their assets in the form of money is determined by the so-called liquidity preference.

Keynes viewed the demand for money as a function of two variables: nominal national income and the interest rate, because he believed that the aggregate demand for money included two elements. The first element is transaction demand, or demand for money as a medium of exchange, i.e. demand for money for transactions, purchase of goods and services. It takes into account the transactional motive, when money is needed to carry out planned expenses, and the precautionary motive, which determines the need to have money to be able to realize unexpected needs. Transaction demand depends on the level of national income: the higher the nominal national income, the higher the level of spending, since people enter into a large number of transactions and they need to have more liquid funds.

Fundamentally new for Keynes is the introduction of a second element into the aggregate demand for money - speculative demand associated with the purchase and sale of securities. The presence of speculative demand for money is due to the fact that people in each specific case themselves determine what share of income to allocate for consumption and what for savings, as well as in what form to store savings. Savings represented in securities generate income. However, owning them is associated with risk, since changes in interest rates will lead to changes in the price of securities. Since the price of securities is inversely proportional to the interest rate, when it rises, the market value of the securities decreases. Moreover, it is expected that, having reached the "natural level", interest rates will begin to fall in the future and securities can be sold profitably at a higher price. Naturally, every business entity investing assets will prefer to invest money in securities, as a result of which there will be no speculative demand for money. Conversely, when interest rates are low, future interest rates are expected to rise, which will depress the price of securities and cause capital losses for security holders. Under these conditions, there is a general desire for liquidity, a refusal to finance economic growth through investment in securities, and speculative demand for money increases.

According to the works of J. Keynes, the speculative motive forms an inverse relationship between the amount of demand for money and the loan interest rate.

The functional dependence of the demand for money can be defined as follows: the nominal demand for money depends on the nominal national income and the nominal interest rate.

The supply of money in the economy is determined by the policy of the Central Bank and is constant in the short term.

The mechanism for setting the interest rate in the money market can be represented graphically (see Fig. 1).

Dependence of the nominal interest rate i on the amount of money in circulation M

where Md is the aggregate demand for money;

Ms - money supply;

E is the equilibrium point of the money market;

i is the equilibrium interest rate.

An increase in the level of nominal income shifts the demand curve for money to the right, to position Md 2 , which, other things being equal, will cause an increase in the nominal interest rate (i 2).

An increase in the money supply will shift the curve Ms 1 to the right, to the position Ms 2 ;, and accordingly will lower the equilibrium interest rate to the value (i 3).

Using monetary policy methods, the government can influence the interest rate, and through it the level of investment, maintaining full employment and ensuring economic growth.

However, J. Keynes and his followers gave priority to fiscal policy. Several reasons can be given to explain this.

Firstly, the economy enters a special state in which an increase in the money supply does not cause a change in national income. This case is called a “liquidity trap” and was analyzed in sufficient detail by the famous English economist J. Hicks.

A “liquidity trap” means that the interest rate is at a fairly low level and can only be changed upward. Under these conditions, owners of money will not seek to invest it. A situation arises where even a very low interest rate does not stimulate investment and does not contribute to income growth. The entire increase in money is absorbed by speculative demand, i.e. money ends up in hands rather than being invested in the economy. Since the interest rate does not change, investment and income remain constant. The market mechanism of independent revival does not work. An impulse from outside the market system is needed. A way out of this situation, the Keynesians believed, was possible only if fiscal policy was involved, which would serve as a “locomotive” for private investment.

Secondly, in assessing the velocity of circulation of money, Keynes proceeded from the fact that it is changeable and unpredictable, including over short periods of time (for example, within the economic cycle). Therefore, money cannot be considered as the most important factor determining the dynamics of production volume, employment and prices.

And finally, thirdly, J. Keynes believed that prices in a market economy are inflexible, therefore he expresses all economic indicators in constant wages.

Having examined the channels through which the government's fiscal and monetary policies affect the state of the economy, and based on theoretical premises, Keynes concluded that in conditions of depression, the methods of the monetarist approach to regulating and stimulating the economy failed. He considered changes in the tax system and the structure of government spending more in effective ways stabilization of the economy. This conclusion led Keynes's followers to proclaim the famous thesis: "money doesn't matter." At the same time, the early Keynesians, based on the “liquidity trap,” considered monetary policy ineffective and emphasized the absoluteness of fiscal policy.

Late Keynesians also believed that monetary policy was effective. Preference is given to a mixed monetary-fiscal policy: relatively tight fiscal and easy monetary, with the latter being assigned the role of an adaptive policy accompanying fiscal regulation measures. Monetary policy is necessary to keep interest rates low and encourage investment: an increase in the money supply will counteract the increase in interest rates and thus prevent crowding out of private investment, reducing the “push” effect of increasing government spending.

1.1.3 Monetarist quantity theory of money

The post-war period until the late 60s - early 70s. marked by the most favorable processes of socio-economic development of leading Western countries over the previous 100 years. However, at the turn of the 60-70s. miscalculations of the Keynesian concept of economic regulation were revealed.

They consist of underestimating the danger of inflation, exaggerating the role of direct public investment and budgetary methods of regulating the situation, and overestimating the real effect of deficit financing.

The discredit and crisis of Keynesianism contributed to the rehabilitation of the role of money in the economy and the revival of temporarily forgotten monetary theories. M. Friedman and his followers, known in economic world as monetarists, they developed the modern quantity theory of money, which became extremely popular in the 70s.

Monetarism is a school of economic thought that emphasizes changes in the quantity of money in circulation as a determining function of prices, income, and employment.

Monetarists disagree with Keynesians not only on the role of money in the economy, but also, above all, on assessing the functioning of the market economy as a whole. They believe that the market economy is quite stable and the market mechanism is capable of independently restoring economic equilibrium. Therefore, monetarists oppose active government intervention in the economy and defend the principles of free competition in general and in the monetary sphere in particular. Money is considered by monetarists as a decisive factor in the development of production. Excessive government regulation of the monetary sphere can provoke, in their opinion, an economic crisis. They found proof of this not only in the crises of the mid-70s - early 80s.

Underestimation of the role of money, and monetary circulation in particular, the inability of the US Federal Reserve System (FRS) to prevent a sharp reduction in the amount of money in circulation in the late 20s. significantly strengthened, according to M. Friedman, the negative aspects of the economic recession. M. Friedman was convinced that money and monetary circulation have always been very important for the development of the economy, and ignoring monetary theory or misusing its postulates in the course of excessive government regulation can cause enormous harm to the social economy.

Analysis of business cycles and money circulation allowed M. Friedman and his associates to significantly modernize the classical quantitative theory of money circulation, especially for short-term time intervals. Thus, monetarists, considering the velocity of circulation of money as a variable, believe that the theory they propose makes it possible to predict the behavior of this variable. They identify the expected level of inflation and the interest rate as the main factors determining the velocity of money. Monetarists also identified the relationship between changes in the growth rate of the money supply, real and nominal GNP, and showed that changes in the growth rate of the money supply affect real output faster than prices. For example, within one business cycle, the growth rate of the money supply in circulation, after some delay, usually several months, causes changes in the growth rate of nominal GNP. First, a significant portion of changes in nominal GNP reflects changes in real GNP, i.e. changes in the real quantity of goods and services produced in an economic system. Subsequently, if the growth rate of the money supply significantly exceeds the average annual rate of economic growth, a significant part of the changes in nominal GNP consists of changes in the absolute price level. Thus, the acceleration of nominal GNP growth caused by an increase in the money supply only initially takes the form of an increasing real output, accompanied by a decrease in unemployment. Subsequently, the slowdown in the growth rate of real production leads to the fact that rising prices absorb an increasingly large part of the impact on the economy due to changes in the growth rate of the money supply. When the growth rate of the money supply slows down, the corresponding changes in nominal and real GNP slow down in the opposite order.

New studies by representatives of the monetarist trend provided the keys to understanding the influence of state monetary policy on the state of the economy, made it possible to explain such a previously unobserved economic phenomenon as stagflation, or the simultaneous existence of high unemployment and high inflation, which completely contradicted Keynesian theory, and finally to offer appropriate recommendations for monetary policy of the state.

Based on the fact that good intentions are too often miscarried, monetarists opposed active monetary policy aimed at stabilizing both the money supply and the interest rate.

They considered the Keynesian concept to be erroneous and internally contradictory. Therefore, the main object of regulation, in their opinion, should not be the interest rate, but the growth rate of the money supply. The central bank must implement a constant, predictable monetary policy and follow the simple rule of constant growth of the money supply. The growth rate of the money supply must be sufficient to, on the one hand, ensure the growth of real GNP, and on the other hand, not cause inflationary processes in the economy.

In the 70s - early 80s. practical use monetarist recipes made it possible to develop fairly effective measures to combat inflation. At the same time, the stabilization of inflation processes, changes in financial institutions and the transition to a new quality of economic growth in the 80s. significantly reduced the relevance of monetarist monetary policy recipes developed during the inflationary period of the previous decade. However, largely thanks to the scientific achievements of the monetarists, economists have said goodbye to the statement “money doesn’t matter” forever.

Modern monetary theory is increasingly acquiring synthetic forms of models that include elements of Keynesianism, monetarism, neoclassical “supply-side economics”, etc.

In general, in economic science a direction has been formed called “neoclassical synthesis”, which includes various points of view on a number of issues in the theory and practice of the functioning of a modern mixed economy.

1.2 Mechanism and instruments of influence of the Central Bank on the supply of money in the economy

The starting point of monetary policy is the change in the value of the real money supply as a result of the Central Bank’s implementation of the appropriate policy. The mechanism of influence of the Central Bank on the volume of money supply in the economy is determined by the nature of the functioning of the modern credit and banking system, the ability of commercial banks to increase or decrease the money supply through credit issue.

1.2.1 Credit issuance mechanism

A significant difference between a bank and any other financial institution is that by creating deposits and issuing loans, it increases the amount of money in the economy, i.e., it affects the volume of the money supply.

The money supply is the amount of generally accepted means of payment in the country's economy. In modern conditions, it consists of cash in circulation and deposits in banks, which economic agents use to pay for transactions.

If the money supply is denoted as M, cash in circulation as C and deposits as D, then

M = C + D. (1)

The modern banking system is a fractional reserve system: only a portion of deposits are kept as reserves, and the rest is used for issuing loans and other active transactions. By issuing loans, banks thereby allow borrowers to use these funds for transactions, therefore, the amount of means of payment increases by the amount of the loan provided, i.e.

M = S + D + K, (2)

where K - volume of loans issued by banks.

The process of issuing means of payment within the system of commercial banks is called credit emission . The size of loans issued in the banking system depends on the amount of deposits and the amount of reserves. If we assume that all means of payment are kept in the bank, then the money supply is greater, the lower the reserve rate r .

The reserve rate is the ratio of the amount of reserves R to the amount of deposits D:

r= (R / D) * 100% (3)

The functioning of the system of commercial banks in conditions of non-cash payments leads to the fact that the issuance of a loan by one bank causes a multiplicative effect (multiplying effect), when the process lasts until the last monetary unit is used as a loan.

The coefficient showing how many times banks increase the supply of money in the economy, provided that all the money is kept in the bank, is called the deposit (bank) multiplier m, and it can be represented as

The increase in the money supply in circulation as a result of the lending activities of banks can be expressed as

DM = (1 / r) * DD, or DM = m*DD (5)

where DD is the increase in deposits, or the increase in the resources of commercial banks, and m - deposit multiplier.

In real life, however, the population and firms do not keep all their money in banks, but some are kept in the form of cash. As a result, the ability of banks to increase the money supply in circulation depends not only on the reserve rate, but also on the behavior of the population and their trust in the banking system.

In general, the volume of money supply in circulation changes as a result of the operations of the Central Bank, which sets the rate of required reserves; commercial banks, which determine the size of loans issued, as well as decisions of the non-banking sector.

The behavior of the population will be characterized by the ratio of ^/cash to the amount of deposits in commercial banks, i.e.

The coefficient characterizing the degree of influence of commercial banks on the volume of money supply in circulation, taking into account the role of the Central Bank, as well as the possible outflow of part of the money from deposits of the banking system into cash, is called the money multiplier.

Denoting it as m *, we can write the formula

The general model of money supply is built taking into account the operations of the Central Bank, commercial banks, as well as decisions of the non-banking sector.

We will show the mechanism of the Central Bank’s influence on the volume of money supply in the economy using the equation of the main components of the money supply:

M = m * V, (8)

where in - monetary base.

The monetary base (or enhanced efficiency money) is the sum of money issued into circulation plus the reserves of commercial banks held on deposit at the Central Bank.

This equation allows us to identify two factors that influence the value of the money supply. The first factor is the change in the monetary base. Through the monetary base, the Central Bank directly influences the supply of money in the economy, primarily changing the amount of reserves of commercial banks.

The second factor through which the Central Bank can control the supply of money in the economy is a change in the required reserve ratio, which causes a change in the money multiplier.

The mechanism of influence of the Central Bank on the volume of money supply in the economy assumes, therefore, an initial modification of the monetary base due to the operations of the Central Bank and a subsequent change in the supply of money in the system of commercial banks due to the multiplier effect.

The Central Bank adjusts the value of the money supply using various instruments of direct and indirect regulation, with the help of which it influences the size of the monetary base and the money multiplier.

1.2.2 Forms and instruments for regulating the supply of money

Direct regulation of the supply of money in the economy involves the establishment of lending limits, interest rates, the volume of loans issued, etc. It is used, as a rule, in conditions of underdevelopment of the banking system and the money market as a whole, during periods of increased inflation or financial crises.

In modern conditions, in countries with developed market economies, three main instruments are predominantly used, with the help of which the Central Bank carries out indirect regulation of the monetary sphere: open market operations, the discount rate and the required reserve ratio.

By conducting open market operations and changing the discount rate, the Central Bank directly affects the monetary base. A change in the required reserve rate, as already noted, affects the multiplication process.

Open market operations - the purchase or sale by the Central Bank of government securities, usually in the secondary market, since such activities of the Central Bank in the primary market are inflationary in nature and are limited or prohibited by law in many countries.

By purchasing securities from a private individual or a commercial bank, the Central Bank increases the reserves of commercial banks held in their correspondent accounts, and the monetary base grows accordingly. Having received additional resources, commercial banks increase the volume of loans issued, the mechanism of credit emission and the accompanying multiplicative expansion of the money supply are activated:

DM = DB * m * (9)

If the Central Bank sells securities, then the process proceeds in the opposite direction and the money supply decreases.

An increase in the resources of commercial banks can also occur if the Central Bank provides loans to commercial banks. The process of lending to commercial banks by the Central Bank is called refinancing. The rate at which the Central Bank lends to commercial banks is called the discount rate (if the loan is primarily provided in the form of bill discounting) or the refinancing rate (for other lending methods).

Loans from the Central Bank go to the reserve accounts of commercial banks, increase the total reserves of the banking system, expand the monetary base and form the basis of a multiplicative change in the supply of money.

An increase in the discount rate (refinancing rate) means an increase in the cost of resources that banks can obtain by borrowing from the Central Bank, which leads to a reduction in their volumes, and, consequently, to a decrease in the lending operations of commercial banks. At the same time, by purchasing more expensive resources, banks increase their lending rates. Lending conditions are deteriorating, loans are becoming less accessible, credit compression is occurring and money is becoming more expensive. The supply of money in the economy decreases.

A reduction in the discount rate indirectly contributes to the growth of the money supply in circulation.

Required reserves are part of the amount of deposits that commercial banks must keep in special accounts with the Central Bank and cannot be used to carry out active operations, and primarily lending.

The practice of mandatory reserves was first officially introduced in 1913. in the USA when the Federal Reserve was created. Subsequently, the Fed received the right to revise the required reserve ratio.

After the Second World War, the principle of variable reserve requirements was introduced by the central banks of many developed countries.

Required reserves are the minimum amount of reserves that commercial banks must hold and serve two functions. Firstly, they must provide the necessary level of liquidity for commercial banks to uninterruptedly fulfill payment obligations to return deposits to depositors and carry out settlements with other banks. Secondly, they are a tool of the Central Bank for regulating the money supply. Changes in the required reserve ratio directly affect the size of the credit and financial potential of commercial banks. The higher the required reserve ratio, the lower the amount of resources for issuing loans, the lower the credit issue.

A change in the required reserve ratio affects the supply of money in the economy through a change in the money multiplier. An increase in the required reserve ratio reduces the money multiplier and reduces the degree of influence of commercial banks on the volume of money supply in circulation. Lowering reserve requirements frees up some of the resources of commercial banks for credit operations, enhances the multiplier effect and leads to an increase in the supply of money.

In modern conditions, in different countries, the main instruments of monetary policy are used with varying degrees of activity. For example, in developed countries there is a tendency to move away from the active use of Central Bank reserve requirements as a regulatory tool. Practice has shown that this tool must be used very carefully due to its rigidity.

The required reserve ratio cannot change frequently, as this upsets the competitive balance between banks and other financial intermediaries. A change in the required reserve ratio can cause dramatic changes in the volume of banks' working assets and affect their financial condition.

With an increase in reserve requirements, commercial banks are forced to hold a larger share of assets in non-interest-bearing form, and thus incur losses due to a drop in their profitability. In this regard, central banks interested in the stability of the banking system resort to changing the required reserve ratio very rarely or try not to change it at all.

The use of the discount rate (refinancing rate) as a monetary policy instrument also has its own characteristics. The fact is that the volume of loans received by commercial banks from central banks usually constitutes a small proportion of the funds they attract. Therefore, a change in the discount rate is primarily an indicator of the monetary policy of the Central Bank. In conditions of stable economic development, as a rule, there are no sharp changes in the exchange rate, and therefore, frequent changes in the discount rate. Sometimes even, as in the United States, for example, the discount rate changes following the movement of interest rates in the capital market, so that the difference between the discount rate and the market rate is not too large. Thus, in developed countries, the main active instrument for the operational regulation of the supply of money in the economy is open market operations.

In general, the methods and instruments of monetary policy in a particular country are determined by established traditions or laws and depend on the degree of development of the credit and banking system, as well as financial markets.

1.3. Objectives and effectiveness of monetary policy

1.3.1 System of monetary policy objectives

Monetary policy is one of the main means of government influence on economic processes. As a system of coordinated measures in the field of money circulation and credit, this policy is aimed at regulating key macroeconomic indicators. The ultimate goals of monetary policy are: ensuring price stability, full employment, growth in real output, and a stable balance of payments. Achieving these goals is a global task. Current monetary policy is focused on more specific goals that reflect its specifics. In this regard, intermediate goals are identified that regulate the value of key variables in the monetary system over fairly long time intervals (a year or more). These include: money supply, interest rate, exchange rate. And finally, the daily consistent actions of the Central Bank are aimed at achieving the so-called tactical goals. The latter determine the nature of monetary policy. Tight monetary policy as a goal involves maintaining the money supply at a certain level. The goal of fixing the interest rate is characteristic of a flexible monetary policy.

Carrying out policies aimed at ensuring economic stability in the state, governments and central banks develop the main directions of monetary policy for a certain period, formulate intermediate goals, the achievement of which ensures the fulfillment of a higher-order task, adjust and specify the implementation of tactical goals.

1.3.2 Intermediate goals in various concepts of monetary regulation

In the Keynesian concept, the main goals are the fight against either unemployment or inflation. Unemployment is a consequence of a decline in production caused by insufficient aggregate demand, the most important component of which is investment demand. Therefore, along with fiscal regulation measures, monetary policy involves stimulating investment by maintaining a relatively low interest rate. Under these conditions, the Central Bank puts forward an increase in the supply of money in the economy as an intermediate goal. To implement it, the Central Bank, using basic instruments, reduces the required reserve ratio and the discount rate, actively, on preferential terms, purchases government securities from commercial banks and individuals. Commercial banks, having received additional resources, offer them on the market as loans.

An increase in the supply of loan capital, other things being equal, will cause its price to fall and make borrowed funds more accessible and attractive to producers. Thus, a decrease in interest rates creates favorable conditions for investment, and expansion of production will lead to a reduction in unemployment. This monetary policy is called the cheap money policy.

The fight against inflation requires a policy of dear money, which is based on contraction of the money supply. To do this, the Central Bank increases reserve requirements and the discount rate, and sells government securities during open market operations. A reduction in the money supply causes an increase in the interest rate and, accordingly, an increase in prices financial resources. In general, the policy of expensive money is aimed at limiting lending to new projects, reducing investment activity and production growth rates.

Keynesians considered inflation only in conditions of full employment and full output and associated it with excessive aggregate demand compared to the potential capabilities of the economy. In conditions of strong economic conditions, excess aggregate demand increases prices. Therefore, other things being equal, monetary policy measures should reduce business activity, reduce production activities, which will contribute to a fall in inflation growth rates.

In general, economic instability, manifested in one form or another, appears to be the result of an imbalance in the growth rate of the natural level of real production and the growth of aggregate demand. Carrying out a monetary policy aimed at achieving the main goal - economic growth with stable prices and full employment - requires choosing a specific intermediate goal that best adjusts the correspondence of aggregate demand to the growth rate of real GNP.

Monetary policy fit into the concept of "fine tuning" economic system, which implied active actions of the Central Bank in the changing economic situation. Monetarists opposed free monetary policy, designed to ensure “fine-tuning” of the economy. M. Friedman, for example, believed that money was too important to be allowed to be manipulated by central banks at their discretion.

Classical monetarism assumes that the only appropriate intermediate goal of monetary policy is to achieve a stable rate of growth in the money supply. These rates should correspond to the growth rate of the natural level of real GNP. Maintaining planned growth rates of the money supply is called targeting.

Monetary policy in the classical sense took place in the United States only between October 1979 and October 1982. On October 6, 1979, the Federal Open Market Committee announced changes in monetary policy due to the possibility of rising inflation and uncertainty about the effectiveness of setting target levels interest rates. The use of the interbank interest rate as a tactical target was discontinued, and the growth rate of the narrow money supply M1 (comprising cash in circulation and demand deposits at commercial banks) became a new intermediate target.

The new approach to monetary policy is based on the monetarist assumption that inflation is always and everywhere the result of an increase in the growth rate of the money supply relative to the growth rate of real output. However, an attempt to implement monetary targeting policy through indirect methods had unfavorable results, and it was abandoned in the United States in October 1982 after three years of use. Practice has shown that the influence of monetary authorities on the money supply is carried out mainly through the demand for money, and for this there are more effective tools, such as interest rates, although in all cases an element of uncertainty remains.

Having refused to follow the simple rule of money supply growth, regulators are nevertheless still influenced by monetarism in the conduct of monetary policy in the sense of its persistent anti-inflationary orientation.

The question of effective intermediate goals of monetary policy still remains controversial. Governments and central banks of various countries, based on the fact that no single goal among all possible intermediate goals of monetary policy can be considered ideal, take control of a number of parameters of the economic system. These include indicators of the money supply, conditions and volumes of loans provided, exchange rates, dynamics of price indices, etc.

1.3.3 Inconsistency of monetary regulation

The experience of conducting monetary policy in various countries over several decades makes it possible to identify its strengths and weaknesses and determine the factors influencing its effectiveness. On the one hand, the monetary policy agreed with the government within the framework of the general guidelines for regulating the economy and pursued by the Central Bank is flexible.

In all countries with a developed market structure, central banks have a certain independence from the government and can quickly make decisions to adjust monetary policy depending on the changing economic situation.

The implementation of current activities by central banks in the monetary sphere is not associated with lengthy approval procedures and the adoption of special orders by authorities state power. The independence of central banks in conducting monetary policy also allows them to successfully resist pressure from politicians when the government's short-term political goals conflict with the main strategic line of macroeconomic regulation. This is often observed in the context of upcoming elections, a growing state budget deficit, etc. All this makes monetary policy an extremely attractive tool for government regulation of the economy.

On the other hand, serious restrictions arise in the conduct of monetary policy, which pose the danger of a deterioration in the economic situation.

Firstly, this is due to the general features of the use of indirect methods of regulation, when the same measures carried out by government bodies, while providing a positive effect in some markets, can cause negative consequences in other markets. For example, a tight money policy reduces the rate of inflation, ensuring stabilization in financial markets. At the same time, it can reduce the volume of loans, worsen investment conditions, cause a decline in economic growth and increase unemployment. In this regard, when conducting monetary policy, it is important to be able to anticipate possible negative consequences and take measures to neutralize them.

However, this presents its own difficulties. Even if we assume that economists are able to make an accurate forecast of the development of the economic situation, there are so-called time lags, or time delays, between changes in the money supply in circulation and the reaction of other economic variables to them.

During these periods, a number of incidental circumstances can disrupt the course of economic processes. There will be a need to adjust monetary policy, which, in turn, may lead to a contradiction between its long-term and short-term goals. This phenomenon is known as the timing discrepancy problem. The presence of such inconsistencies, according to the founders of the neoclassical theory of rational expectations, can nullify all the efforts of the monetary authorities aimed at ensuring economic stability.

The theory of rational expectations states that economic agents, based on past experience and using available information, are able to independently predict economic processes and make optimal decisions. The actions taken by business entities may not fit into the logic of the monetary policy being pursued, and then it will not achieve its goals. The practical application of this theory is that monetary policy should not be of the nature of opportunistic countercyclical policy, since this causes instability and unpredictability in the decision-making of economic agents. Proponents of the concept of rational expectations advocate the creation of stable rules in accordance with which the government and economic agents would act.

Secondly, the correct choice of intermediate and tactical goals also has a great influence on the effectiveness of monetary policy. IN in this case We are talking about the so-called technical side of the matter. It is known that the money supply can be represented by various monetary aggregates built on the principle of decreasing liquidity. Choosing, for example, the growth rate of the monetary base as an intermediate goal. The central bank must choose the monetary aggregate that it will control, narrower or broader, and determine tactical goals accordingly. If the choice is made incorrectly, without taking into account all the ongoing processes in the monetary sphere, the efforts undertaken will not only not bring the desired final result, but may also undermine the authority of the economic theories on the basis of which monetary policy was formed. For example, the failure of monetary targeting carried out by the Federal Open Market Committee in 1979-1982, M. Friedman, the intellectual father of modern monetarism, was associated with the fact that the tactical goal was incorrectly chosen - unborrowed reserves instead of the monetary base, which , in his opinion, would be preferable. The narrow monetary aggregate M1, whose growth rate was chosen as an intermediate goal, also behaved unexpectedly for the monetary authorities. The result of the monetarist experiment is a significant increase in the variability of the behavior of M1, as well as a sudden breakdown of the hitherto stable relationship between the growth of M1 and nominal GNP and between the growth of M1 and inflation, although their stable relationship to a certain extent forms the basis of the classical monetarist approach.

Thirdly, when conducting monetary policy and choosing its goals, it is necessary to take into account the side effects caused by the very mechanism of changes in the volume of money supply in the economy. The central bank cannot completely control the money supply since commercial banks and the non-banking sector are also involved in this process. For example, bank reserves consist not only of mandatory reserves prescribed by the Central Bank, but also excess reserves, the amount of which banks determine independently. The greater the excess reserves, the less credit will be issued. Thus, the Central Bank cannot accurately predict the volume of loans that commercial banks will issue, and an increase in excess reserves will increase the reserve ratio and reduce the money multiplier.

The ratio between cash and non-cash money depends on the behavior of the population, which is determined not only by the actions of the Central Bank. A change in the ratio between cash and non-cash money d will also affect the value of the money multiplier, which determines the scale of credit emission and, consequently, the supply of money. The measures of the Central Bank may not achieve their goals due to the unpredictable behavior of commercial banks or the population.

For example, the Central Bank decides to increase the supply of money and, to do this, expands the monetary base by conducting open market operations to purchase securities. An increase in the money supply will cause the interest rate to fall. And then everything will depend on the behavior of commercial banks and the population in the changed conditions. If banks choose to increase their excess reserves instead of issuing loans, and the population transfers part of their funds from deposits to cash, the money multiplier will decrease, which will neutralize the process of expansion of the money supply that has gained momentum and will reduce the effectiveness of the actions taken by the Central Bank.

A similar situation was observed during the Great Depression in America, until the 40s, when excess reserves in commercial banks began to rapidly increase. This experience showed that an increase in bank resources will not necessarily produce a multiplier expansion of bank loans and deposits. Some economists believe that if banks had not accumulated excess reserves, then the economic recovery in the second half of the 1930s. it would be more energetic.

As a result, the effectiveness of monetary policy as a whole depends on the high-quality work of all parts of the so-called transmission mechanism.

1.3.4 Monetary policy transmission mechanism and its role

The transmission mechanism is the process by which monetary policy influences the level of planned costs of all subjects of a market economy. The transmission mechanism of monetary policy is quite complex.

In the Keynesian model, as noted earlier, four main stages can be distinguished: a change in the value of the real supply of money in the economy as a result of the Central Bank’s implementation of appropriate policies, a change in the interest rate on the money market, the reaction of aggregate expenditures, primarily investment, and a change in output.

More recent studies have identified additional features of the monetary policy mechanism that significantly influence the final outcome. Practice has shown that changes in interest rates affect not only the planned investments of firms, but also household expenses, which national accounting classifies as consumer expenses, for example, the purchase of durable goods on credit. Changes are also taking place in the securities market, the rate of which, other things being equal, depends on the level of interest rates. Because there are alternative ways to finance new investment projects, equity prices are included in the monetary policy transmission mechanism along with the interest rate.

Thus, in modern conditions, the transmission mechanism of monetary policy takes into account the impact of changes in the money supply not only on investment, but also on all components of planned expenditures, including consumption and government purchases, and the impact is carried out not only through the interest rate, but also through stock prices and bonds and changes in the level of wealth of society as a whole.

Within the framework of the existing transmission mechanism, when determining the direction of monetary policy, it is necessary to take into account at least two more circumstances that have a significant impact on the final results.

First, there is the sensitivity of aggregate demand to changes in interest rates. A weak reaction to the dynamics of the interest rate or its absence on the part of the main components of aggregate demand, and above all investment spending, breaks the connection between fluctuations in the money supply and the volume of output. Influencing the main macroeconomic variables through the interest rate turns out to be ineffective.

Secondly, the change in the interest rate due to a change in the money supply depends on the degree of elasticity of the demand for money with respect to the interest rate. With relatively inelastic demand, the reaction of the money market to the dynamics of the money supply will be stronger. For example, an increase in the money supply will lead to a more significant drop in the interest rate than in the case when the demand for money is sufficiently sensitive (more elastic) to changes in this rate.

In general, the effectiveness of monetary policy, other things being equal, depends on how accurate the knowledge of economists is about short- and long-term economic processes, about the sum of factors influencing the demand and supply of money, about the complexities of the mutual relationship between changes in the money supply and basic macroeconomic parameters , such as nominal GNP, price level, production volume, employment level, exchange rate, etc. The use of known monetary methods and instruments becomes even more complicated in countries with transition economies, where the laws of the market economy are not fully manifested and there are a number of specific circumstances modifying the mechanism of monetary regulation.

Chapter 2. Monetary policy in the transition economy of Russia

2.1 Factors influencing monetary policy

The formation of monetary policy in the transition economy of Russia is determined by the interaction of two groups of factors: firstly, the specifics of a special stage of development, namely the transition from a planned centralized economic system to a modern mixed economy of a market type, and, secondly, specific social- economic and political conditions in which this transition is taking place.

Features of the state's economic policy in transition period are associated with the fact that a stable economic system with the properties of self-regulation and self-development has not yet been formed. In a modern mixed economy, state regulation, along with market regulation, forms a single mechanism and, complementing each other, ensures the functioning of the entire system. A transition economy is an economic system that is not self-reproducing. Old relations are gradually changing, and the new institutions, norms and rules being created cannot quickly replace the old ones. The existence of opposing regulatory mechanisms leads to a clash of economic interests, aggravation of socio-economic and political relations. The struggle between the new and the old determines the variability and instability of the economy during the transition period. Ensuring balance is impossible without the active support of the state. At the same time, a transition economy for its stabilization requires a special pattern of relations between the state and economic agents. The behavior of economic agents during the transition period is based on an unknown, difficult-to-predict economic situation. Long-term guidelines for economic activity have not been formed, and stable economic relationships have not developed. In a transition economy, the state cannot directly use the mechanisms and instruments of macroeconomic regulation that have had a positive effect in the existing system of a mixed economy. This fully applies to monetary policy, which will be unsuccessful if there is no adequate response of economic agents to the impulses created by monetary instruments. This reaction is associated with the formation of market mechanisms and corresponding market institutions. Therefore, during the period of their formation, monetary policy becomes more complicated; regulation of the money supply, interest rates that affect the level of investment, and cash flows in the economy cannot be limited only to the methods used in already established economic systems.

The influence of the second group of factors on monetary policy is associated with the initial socio-economic and political conditions in which the transition to a new economic system is taking place. Transition processes in the Russian economy are accompanied by a decline in production, unemployment, and a break in economic ties. Economic destabilization is manifested in an imbalance of aggregate supply and demand, inflation, and a significant state budget deficit.

Thus, measures to create a new, more efficient management mechanism were forced to be linked with stabilization measures. The result of the economic policy pursued was to restore macroeconomic balance in the short term, improve the investment climate, and create conditions for economic growth.

2.2 Features of the Russian banking system

The creation and development of a modern banking system is extremely important for the effective implementation of monetary policy. The banking sector is a channel through which impulses of monetary regulation are transmitted.

The formation of the Russian banking system as the most important institution of a market economy had its own peculiarities, which influenced the mechanism, goals and results of the ongoing monetary policy.

An analysis of the functioning of the banking sector allows us to conclude that from the first days of their existence, commercial banks in Russia were not focused on servicing real commodity production, but were created as instruments for quick enrichment and capital accumulation by obtaining excess profits from speculative transactions in financial markets. Unprecedented quantitative growth of commercial banks in the early 90s. was not so much caused by the needs of economic development and the emerging private sector, but rather due to the ongoing in 1991-1992. politics, including monetary policy.

Uncontrolled money emission, carried out simultaneously by twelve central banks of the ruble zone, provoked severely suppressed inflation. The liberalization that followed in 1992 and the transfer of suppressed inflation into open inflation caused a colossal jump in prices and changes in basic price proportions. The need to maintain the increased payment turnover determined a further increase in the money supply. At the same time, money emission, carried out in the form of cash and direct lending by the Central Bank of Russia to privileged commercial banks in the absence of proper control over the movement of cash flows, only partially mitigated the growing shortage of money supply to service economic turnover. An ill-conceived monetary policy in the context of liberalization of foreign economic activity and foreign exchange relations, high interest rates led to a change in the proportion in the monetary circulation system. The leaching of funds from the production sector and their flow into the sphere of financial speculation began. The Central Bank of Russia, issuing money following the increase in demand for it due to rapidly increasing inflation, was unable to prevent the concentration of new money in the extremely profitable financial sector. As a result, despite the enormous scale of money emission, real production continued to experience a shortage of funds, and banks extracted huge profits due to inflationary redistribution of capital.

In 1992, money emission increased 17 times, funds in the accounts of enterprises, citizens and local budgets - 13 times, net profit in industry - 11 times, and net profit in the financial and credit sector - 34 times.

Receiving cheap resources, such as budget funds, loans from the Central Bank of Russia, and then international loans, Russian commercial banks used them, at best, to finance foreign economic activity, trade, and enterprises focused on the export of raw materials. Some banks, created by the heads of large industry structures and giant enterprises, often lent to obviously ineffective projects and supported unprofitable production in the interests of their leading shareholders, risking clients' capital. Most banks from the very beginning were focused on the possibility of obtaining ultra-high income from risky transactions in the interbank and foreign exchange markets. At the same time, funds from current accounts of clients were often used, which jeopardized the existence of the entire payment system and slowed down the turnover of goods and money.

Thus, the credit and banking system created in Russia was not initially aimed at performing the functions inherent in modern banking systems: creating reliable channels for money circulation, servicing economic turnover, transforming savings into loan capital and redistributing it between sectors of the national economy, stimulating savings.

The incompleteness of the formation of the legal framework, the contradictory and inconsistent policies of the Central Bank of Russia, the low level of regulation of the activities of credit institutions led to the extreme instability of the Russian banking system, the crisis phenomena in which began to grow already in 1994. The crisis processes that accompanied the development of the Russian banking system were a reflection of the deep disintegration of the economy that had begun. , and above all, its disintegration into autonomously functioning spheres: speculative-financial and production. In fact, the Russian credit and banking system worked as the opposite of the normal banking system, creating for itself new, highly profitable and reliable financial instruments, increasingly closing the movement of cash flows within itself, bleeding the real sector.

The state's influence on the economy using monetary policy methods presupposes a close relationship between the monetary sphere and the sphere producing goods and services. And the guide here is the credit and banking system as the basis of the infrastructure of a market economy.

The deformed Russian banking system, divorced from the production sector, not only failed to provide channels for monetary regulation of the economy, but also collapsed as a result of the macroeconomic policy pursued, the priorities of which were largely determined by the need to ensure excess profits in the financial sector.

The creation of a stable modern banking system in a transition economy is an indispensable condition for conducting an effective monetary policy.

2.3 Specifics of monetary policy objectives

An equally important and complex problem for most countries making the transition to a new economic system is the determination of the goals of monetary policy and right choice instruments of monetary regulation.

For almost all such countries, monetary policy has an anti-inflationary orientation, which is due to the economic situation. Anti-inflationary policy, as a rule, forms the basis of the stabilization program in the first stages of market transformations. Stabilization is achieved in two ways.

Firstly, there are various inflation mechanisms and, accordingly, various methods and instruments of monetary regulation are used. The transition economy is still unable to develop according to the laws of a developed economy. Therefore, the mechanisms and causes of processes that outwardly manifest themselves in the same way in all countries can be deeply specific in transforming economies. For example, to characterize inflation in Russia, it is hardly possible to limit ourselves only to the concepts of demand inflation and cost inflation. It is obvious that the causes of Russian inflation should also be sought in the structural imperfections of the economy and disintegration processes. The formation of monetary policy should be based on a deep understanding of the mechanism of developing inflation and careful use of available levers. Numerous discussions in the early 90s. about the specifics of inflation in our country, they practically did not form a clear idea of ​​the actual processes taking place.

Secondly, by putting forward the fight against high inflation as a primary goal, governments and central banks view it as the most important prerequisite for a speedy exit from the economic crisis. However, in a transition economy, financial stabilization itself, expressed in a slowdown in the rate of price growth, will not automatically ensure the start of economic growth. It must be supported by real reforms of the tax and monetary systems, the creation of market economy institutions, and the establishment of mechanisms for the operation of a modern mixed economy. If the state deals only with issues of financial stabilization in a narrow sense, apparent successes may turn out to be imaginary and goals will not be achieved.

Russia found itself in a similar situation in 1998. Based on the experience of many countries, which showed that with inflation over 40% per year, investment in the economy is impossible, government circles, in fact, put forward the thesis about the self-sufficiency of suppressing inflation for the transition to economic growth and presented it as the main goal of macroeconomic policy. 1997, which was the most economically successful year of reforms. The decline in production stopped, real GDP increased by 0.2%, real incomes of the population increased by more than 2%, consumer prices increased by only 11%. This year, it would seem, confirmed the correctness of the chosen policy and fundamentally changed the situation: the period of a long economic recession ended. At the same time, against the backdrop of such rosy prospects, non-payments in the economy continued to increase. In 1997, the growth of all types of enterprise debt amounted to 40%. The share of long-term loans from commercial banks did not exceed 3.3% of all loans issued. The number of unprofitable enterprises by the beginning of November was 47.5%, the share of barter transactions reached 70 - 80% of product sales volumes, in the regions 60% of the turnover was internal turnover. Banks continued to actively lend to the government. The return on the financial market by world standards was enormous - 13.2% per annum in 1997 in dollar terms. The ruin of public finances continued through transactions with government securities, which represented a unique financial instrument, because at the same time they were the most profitable, liquid and reliable.

Thus, in a transition economy, burdened by numerous economic, social and political problems, stabilization policy cannot be simple, straightforward and unambiguous, especially since the government is not always able to keep the processes under control.

2.4 The inconsistency of monetary policy in the 90s.

The success of monetary policy also depends on the chosen principles of monetary regulation. As already noted, in modern conditions there is no single dominant doctrine. Theoretical models take on synthetic forms, which gives monetary policy greater flexibility.

An essential feature of the monetary regulation of the Central Bank of Russia was its focus on the principles of monetary policy, which is based on the method of monetary targeting. Monetary policy was based on simple calculations of the regression relationship between the volume of money supply and the rate of inflation. The system of targeting the money supply as a form of monetary policy of central banks of developed countries took shape only in the 70s. and was used in established market economies, where the profitability of the real sector is not lower than the profitability of the financial sector.

The profitability of the financial sector was limited through strict government regulation of interest on loans and deposits, control over foreign exchange transactions, and restrictions or prohibitions on credit transactions in the stock market. Refinancing was carried out mainly through the accounting and rediscounting of bills. The existing economic proportions made it possible to identify the existence of a relationship between the growth rates of the money supply, real and nominal GNP, to determine the demand function for money and, under these conditions, to formulate monetary policy based on the “simple rule of growth of the money supply.” However, as practice has shown, it was not effective enough, and it was abandoned already in the early 80s. Central banks were unable, even with sufficiently developed tools, to keep the growth of the money supply within the given parameters.

Even greater problems when using a monetary targeting system arise in countries with economies in transition. The following can be identified as objective factors: firstly, the demand for money is unpredictable (and this underlies the entire concept of monetary targeting); secondly, the demand function for money is unknown; thirdly, the use of monetary planning for short-term purposes of financial stabilization, while in monetary theory it is a guideline for medium- and long-term policy, and, finally, the difficulty of controlling the money supply due to the erosion of confidence in the national currency and the so-called dollarization of the economy.

In mid-1992, the Central Bank of Russia, together with the government, declared the main goal of monetary policy to be suppression of inflation and began to pursue a strict policy of contracting the money supply. However, by mid-1995 it became obvious, including to the Central Bank itself, that it was ineffective. Despite the fact that it was possible to ensure a consistent slowdown in the intensity of inflation processes (for example, in 1992, the average monthly inflation rate was 31%, in 1993 - 21, in 1994 - 10%), in 1995 the decline in inflation lagged behind planned landmarks.

The Central Bank of Russia was forced to recognize the limited ability to suppress inflation through monetary policy. The contraction of the total money supply occurred mainly in the production sector and affected the structure of aggregate demand rather than its value. The reduction in household demand for final products of domestic production was compensated by its rapid increase both in the speculative sphere and in the related sphere of import transactions. The continuing flow of money from the production sphere to the speculative sphere caused an acceleration of the turnover of money (in 1995, the average annual velocity of money circulation was 10.4 revolutions, while in developed countries it did not exceed 2 revolutions) and, accordingly, depreciated the anti-inflationary effect of the contraction of the money supply. At the same time, cost inflation in the production sector increased both as a result of the rapid rise in prices for the products of natural monopolies, and as a result of the uncontrollable desire of enterprises to transfer the costs of the liquidity crisis, the rise in the cost of working capital, and the use of forced commercial credit to the buyer. Demand restrictions caused by the contraction of the money supply primarily reduced the rate of growth in prices of consumer goods producers. In industries producing intermediate goods and products for the investment sector, the effect of demand restrictions was largely compensated by non-payments.

Suppressing inflation by compressing the money supply and moving it into the speculative sphere due to its super-profitability led to the deprivation of money in the real sector of the economy, which resulted in a non-payment crisis and a budget crisis.

Thus, the policy of contracting the money supply, carried out in conditions of economic disintegration, did not lead to achieving the main goal - suppressing inflation. Restrictions on aggregate demand against the backdrop of a decline in the real sector of the economy continued to reproduce the already established macroeconomic proportions, but each time at a lower level compared to the previous period.

Nevertheless, in 1995-1996. The Central Bank of Russia continues to implement a moderately tight monetary policy, stabilizing on a monetary basis. In this case, various parameters characterizing the state of the monetary sphere can be used as targets: the general level of the money supply or its percentage change, setting limits for the growth of the money supply, the total volume of lending or the level of interest rates. However, the choice of targets, as shown earlier, also poses problems for developed countries, largely determining the effectiveness of monetary policy. For countries with transition economies, it is complicated by the immaturity of the transmission mechanism of monetary regulation, the underdevelopment of financial market instruments, and the backward structure of the money supply, the largest share of which is cash in circulation. The persistence of a high share of cash in circulation with a low propensity of economic entities to accumulate savings in banks makes it difficult to establish effective control over cash flows.

As an intermediate goal of monetary policy, the Central Bank of Russia chose a fairly broad aggregate M2, including cash in circulation outside the banking system, as well as non-cash funds (demand deposits, time deposits and savings deposits).

To control the growth of the money supply, in 1995, limits were established on the net domestic assets of monetary authorities, limits on the net claims of the monetary system on the government, and targets for the volume of net international reserves were also determined. Since 1996, the operational procedure of the monetary policy of the Central Bank of Russia has been based on the control of target indicators of the monetary base in a broad definition (cash in circulation, in the cash desks of commercial banks, funds in the required reserve fund and balances in correspondent accounts of banks). Assuming that the value of the money multiplier and the share of cash in circulation are stable. The Central Bank has actually reduced the procedure to regulating bank liquidity. Actions regarding interest rates were limited to maintaining their stability.

In 1996, for the first time since the beginning of economic reforms, inflation decreased while the real money supply grew: with consumer prices increasing by 21.8% per year, the M2 money supply grew by 33.7%, or 11.9% in real terms. The second feature of 1996 was the first decrease in the velocity of money circulation during the reforms. So, if in 1993, 1994 and 1995. the average annual circulation rate of M2 was respectively 8; 9.6 and 10.4, then in 1996 it dropped to 8.7%. The Central Bank assessed the medium-term decrease in the velocity of circulation of money as an increase in the saturation of the economy with money and considered it to be the most significant change in the state of the monetary sphere in 1996. At the same time, the question of the adequacy of the money supply is of fundamental importance when choosing methods of anti-inflationary policy. The contraction of the money supply also means a limitation of means of payment in circulation. Therefore, the effectiveness of monetary policy is also determined by ensuring that the turnover needs for means of payment. At the same time, there are no sufficiently reliable criteria for assessing the adequacy of the money supply. The most used is the monetization coefficient - the ratio of M2 to the GDP value. In the mid-90s. in Russia it was one of the lowest not only among developed, but also among developing countries. Depending on the monetary unit used, its value was estimated in the range of 0.13-0.16. For example, in 1995 in France it was 0.67; in England - 1.10; in Canada - 0.63. A lower monetization coefficient was observed only in Guinea, Azerbaijan, Armenia, Georgia, and Zaire.

A low monetization coefficient with a high velocity of money circulation rather reflects the existing imbalances in the monetary sphere, and it is unlikely that a slowdown in the velocity of circulation under these conditions can be an indicator of the saturation of the economy with money. The growth of non-payments, debt, the widespread use of money surrogates, barter turnover, the accumulation of stocks of unsold products - all this indicates not only shortcomings in the activities of enterprises, but also a crisis in the monetary sector. In 1997, the trends of the previous year generally remained the same: a real increase in the money supply, a decrease in the velocity of its circulation. The Central Bank of Russia believed that the likelihood that the accelerated rate of growth of the money supply would lead to an increase in the rate of inflation was very small. However, in 1997, unfavorable changes occurred in the structure of the money supply: the share of cash increased, which by the end of 1997 fluctuated in the range of 35-37%. This indicated the primitivization of economic relations and the limited capabilities of the monetary system aimed at creating conditions for economic growth.

The active monetary policy pursued by the Central Bank of Russia made it possible to significantly reduce inflation, but financial stabilization was superficial. The ongoing decline in production, the unresolved problem of payments and the formation of state budget revenues have maintained the threat of inflationary surges. The expansion of the money supply, based on a wide influx of non-resident funds, created a fundamentally unstable equilibrium in the financial market, since the influx of foreign capital in a depressed economy has a speculative basis, requires increased profitability, and is subject to the slightest market fluctuations, which can lead to a massive outflow of funds. The autumn crisis of 1997 revealed all the negative consequences of the increasing dependence of the national monetary system on non-resident funds.

In the first half of 1997 alone, $12 billion entered the economy through the purchase by non-residents of GKO-OFZ and other securities on the domestic market, which led to an increase in the money supply of 45-50 trillion. non-dominated rubles, or about 2/3 of its total increase during this period. The second channel for the influx of non-resident funds was the loans from foreign banks that fell on leading Russian commercial banks. Their net inflow amounted to $6 billion over 11 months. 1997, or 27-30 trillion. rub. growth in money supply.

The internally contradictory monetary policy pursued in 1997 was based on a large influx of non-resident funds while interest rates and yields on government securities fell. The budget crisis, combined with the global financial crisis, blew up the entire financial system of Russia by August 1998.

2.5 Methods and tools

The weakness of Russia's monetary policy in the 90s. also manifested itself in the choice of methods and instruments of monetary regulation. Central banks have both direct and indirect methods at their disposal. Developed countries made the transition to predominantly indirect methods in the 70-80s. this century as part of the overall process of liberalization of financial markets.

In countries with transition economies, in the absence of established market institutions and mechanisms of monetary regulation, central banks can use, at the first stages, mainly methods of direct administrative influence, for example, fixing interest rates, limiting the size of loans issued, and targeted lending. At the same time, efficiency is achieved by simultaneously using a system of tools and organizing control over compliance with established standards.

In Russia, targeted lending was mainly used as a direct instrument. The Central Bank of Russia determined a circle of special (authorized) banks that lent to a number of priority sectors of the national economy at interest rates significantly below market rates, and for the purpose of compensation provided them with certain benefits. Such banks, as a rule, serviced budget accounts and were also conductors of centralized loans to the economy. In the absence of proper control, such loans were used mainly to support unprofitable and unprofitable enterprises, market principles of lending were violated, and banks bore additional risks. At the same time, access to centralized loans and participation in targeted programs contributed to the fact that banks became accustomed to cheap government resources, and their competitiveness depended crucially on the patronage of the public sector. In 1992, the share of centralized loans in the liabilities of commercial banks reached 52% and, although gradually decreasing, in 1995 it was still 25%. Cheap centralized and targeted loans through the mechanism of banking multiplication unwinded the inflationary spiral. An intermediate form in the system of refinancing commercial banks are credit auctions, which the Central Bank of Russia began to carry out in 1994 and in the period from February to December held 11 auctions, at which resources worth over 898 billion rubles were placed, while the interest rate ranged from 214 to 90% per year. Credit auctions contributed to the development of the interbank loan market, made it possible to maintain the liquidity of commercial banks and regulate the desired volume of loans.

The abandonment of direct lending to priority sectors of the economy and the transition to the use of a broad monetary base as an operational goal allowed the Central Bank of Russia, since 1996, to transition to indirect methods of monetary regulation using market instruments. However, the possibilities for effective regulation of the monetary sphere using these instruments in transforming economies are limited. At first, the main instrument is the required reserve ratio. But if in developed countries, as noted earlier, central banks resort to changing it extremely rarely, so as not to upset the existing competitive balance in financial markets, then in Russia changing reserve requirements is, in fact, an operational tool. In this regard, in conditions of inflation, the required reserve ratio is quite high, which affects the resource base of commercial banks. In addition, it is often subject to adjustment, and this makes the policy of the Central Bank difficult to predict and sometimes inconsistent.

Another instrument of indirect regulation is the Central Bank discount rate, or refinancing rate. The peculiarities of its use in Russia are due to the fact that it has never reflected the relationship between the real and monetary sectors of the economy. The Central Bank of Russia considered it inappropriate to refinance commercial banks through the accounting and rediscounting of bills of industrial companies due to the low quality of these securities, since the credit histories of large borrowers had not yet been established, there was a weak legal basis for bill circulation, and its mechanism had not been formed. Therefore, the refinancing rate was more of a virtual nature, it was a kind of beacon indicating the direction of monetary policy, having a more psychological impact on the behavior of credit institutions. In a transition economy, there is most often a weak relationship between the level of the Central Bank discount rate and market rates of commercial banks. At the same time, given the significant dependence of banks on the resources of the interbank market, frequent and sharp fluctuations in it can have a very large impact on the liquidity of the banking system. In Russia, with the help of this instrument, the Central Bank most often limited the growth of speculative operations.

Open market operations conducted by the Central Bank of Russia were carried out mainly to raise funds to finance the state budget deficit. Therefore, government securities from the very beginning had high yields and were short-term in nature. Attempts to place them for a long period were unsuccessful, since only speculative capital was present in the financial markets. When using this instrument for non-inflationary covering of government expenditures, there is always the so-called effect of crowding out private investment by public investment. In Russia, it worked in full force, since banks received an instrument that allowed them to receive guaranteed high incomes, and were in no hurry to increase loans to enterprises. And if we take into account that market instruments were reduced to pawn loans and repo transactions, permitted only to dealer banks, which were backed by the same GKOs and OFZs, then the activities of the Central Bank of Russia, in fact, continued to orient cash flows exclusively to the financial market, exposing real sector.

The narrowness and underdevelopment of financial instruments, the deformation of the banking system, the exorbitant burden of expenses for servicing the growing external and internal debt, and ill-conceived monetary regulation policies ultimately caused a deep financial and economic crisis in Russia in August 1998, destroying the banking system and stocks and bods market.

The growing crisis was also evidenced by the dynamics of monetary and credit indicators in 1998, which ran counter to the goals and priorities of the monetary policy adopted that year. Firstly, a further increase in the money supply was expected, including in real terms. In fact, in January-August 1998, the money supply in circulation M2 decreased by 8.1%, and in real terms it decreased by 23.3%. Secondly, it was assumed that the yield on GKOs and OFZs would decrease to the level of 12-14%, but by August it reached 200%. The priority task was to reduce interest rates, but first the Central Bank itself increased the refinancing rate to 80% by the end of July 1998, and after it all other financial market rates crept up.

Business deposits in rubles fell sharply in the first quarter of 1998 and continued to decline slowly in the second. According to data at the end of August, the volume of enterprise funds in ruble accounts was 10.5% lower than the same figure at the end of August 1997 and 28.3% lower than this figure at the beginning of 1998. In July-August alone, it decreased by 9 ,8 %.

The value of the monetary base (in a narrow definition) over the eight months of 1998 decreased by 1.7%, the volume of required reserves - by 24, and the cash supply increased by 2.8%.

The 1998 crisis, like any economic crisis, exposed all the accumulated imbalances in the economy and forced us to seriously engage in a qualitative restructuring of the banking system. At the same time, he once again confirmed the importance of money in the economy and the fact that regulation of the monetary sector should be carried out taking into account real economic conditions, based on a deep understanding of the relationships, on the search and development of adequate methods and instruments of monetary policy.

6 Features of post-crisis monetary policy

The government headed by E. Primakov, which came to power in September 1998, raised expectations of major changes in macroeconomic policy. It was possible to assume an inflationary scenario for the development of events on the basis of numerous speeches by prominent members of the government calling for increased government intervention in the economy, compensation for population losses from the fall 1998 crisis, and state support for the banking system. The government seemed prepared to enter into open confrontation with international financial institutions and foreign creditors.

However, in practice, the government of E. Primakov showed the necessary caution and ultimately ensured not only the adoption, but also the implementation of a tough budget for 1999 while pursuing a restrained monetary policy. An even greater degree of pragmatism can characterize the policy of the Government of the Russian Federation, headed by S. Stepshin and V. Putin.

Among the main goals of the exchange rate policy for 2000, the Central Bank of the Russian Federation identified the smoothing of significant fluctuations in the ruble exchange rate and the maintenance of gold and foreign exchange reserves at a level that ensures confidence in the ongoing monetary policy and the stability of the Russian monetary and financial system. The need was noted to improve the current mandatory reserve mechanism and its regulatory framework, to expand the volume of operations of the Central Bank of the Russian Federation on the open market and deposit operations with commercial banks. The interest rate policy of the Bank of Russia in 2000 was planned only indirectly: through control over the volume of emissions and operations on the open market, although due to the slow development of the domestic market for government securities, these measures of monetary regulation had limited significance.

The main directions of the unified state monetary policy for 2000 contained two basic scenarios for economic development in 2000. According to the first (moderate) scenario, the growth of the money supply should have been 20–28%, inflation – about 18–22%, and real GDP growth – from 1 to 2%. The second scenario (optimistic) assumed significantly higher real GDP growth rates (6–10%) with a slight increase in the growth of the M2 money supply compared to the first option (32–38% per year) and inflation at the level of 25–28%.

The “freezing” of the government securities market in August 1998 significantly narrowed the instrumental capabilities of the Central Bank of the Russian Federation, primarily in managing liquidity in the short term. In fact, throughout the entire post-crisis period, the Bank of Russia carried out open market operations only in the form of ruble and foreign exchange interventions in the foreign exchange market. The total volume of issued bonds of the Bank of Russia traded on the market from September 1998 to February 1999 did not exceed 26 billion rubles (i.e., no more than 10% in relation to the broad monetary base at the end of 1998), and the volume new GKOs issued in 2000 amounted to about 13.2 billion rubles (about 2% in relation to the broad monetary base in mid-2000), including the total turnover of all GKOs-OFZs on the secondary market did not exceed 3–5 billion . rubles. Under these conditions, the only tool at the disposal of the Central Bank of the Russian Federation for sterilizing interventions was deposit operations. Another tool for sterilizing the money supply can be called the accumulation of funds in federal budget accounts due to the federal budget surplus, i.e. withdrawal of money from the economy through taxes and non-tax budget revenues. Over the eleven months of 2000, the increase in balances in federal budget accounts exceeded 64 billion rubles. Thus, by the beginning of December 2000, the total amount of money temporarily withdrawn from the economy in this way reached 103.8 billion rubles. However, in December 2000, the balances in the federal budget accounts decreased by 19 billion rubles.

On October 12, 1999, the Government of the Russian Federation approved the regulations on the features of the issue and registration of bonds of the Bank of Russia. The release of this financial instrument was supposed to give the Central Bank of the Russian Federation new opportunities to manage the money supply, in particular, the opportunity to sterilize ruble interventions in the foreign exchange market. However, auctions for their placement were held only once on December 14, 1999, but were not recognized as valid due to lack of demand at prices acceptable to the issuer.

The policy of reserve requirements was quite actively used by the Bank of Russia in 1998 and 1999. Thus, in order to overcome the liquidity crisis after the “freezing” of the GKO-OFZ market in 1998, the Central Bank of the Russian Federation reduced reserve requirements three times: from August 24, 1998, reserve requirements for fixed-term obligations and accounts in foreign currency were reduced from 11% to 10%, and for deposits of individuals – from 8% to 7%. From September 1, 1998, reserve requirements for Sberbank of the Russian Federation and credit institutions whose share of investments in government securities (GKO-OFZ) in operating assets is 40% or more were reduced to 5%, and for credit institutions whose the share of investments in government securities (GKO-OFZ) in operating assets is less than 40% - up to 7.5%. The unification of reserve requirements at the level of 5% for all types and currencies of liabilities was carried out on December 1, 1998.

The refinancing rate of the Central Bank of the Russian Federation in 1999–2000 was even more symbolic than in the pre-crisis period. The cessation of repo operations and one-day refinancing of primary dealers deprived the refinancing rate of any indication of the level of fees for the use of borrowed resources. Its role as a limiter on profitability in secondary trading in government securities (the limit was equal to two times the refinancing rate) was significant only in the first few months of the reconstruction of the GKO-OFZ market. Subsequently, the level of profitability on the market was significantly lower than the refinancing rate.

Throughout 1999–2000, the Bank of Russia repeatedly reduced the refinancing rate, lowering it from 60% to 25% per annum (see Appendix 1). However, its dynamics simply followed trends in the growth rate of the consumer price index and in the level of rates on interbank loans and in the government securities market. In the fall of 2000, the refinancing rate took negative values ​​in real terms.

Chapter 3. Unified state monetary policy in XXI century

It is quite natural that the government is aware of the need to adjust monetary policy taking into account the realities of today. Below we will trace the declared actions of the monetary authorities, designed in the near future to ultimately achieve sustainable growth of the country's economy.

3.1 Objectives and results of monetary policy in 2001

The main parameters of monetary policy for the coming year 2002 were calculated taking into account the forecast of the country's socio-economic development, used by the Government of the Russian Federation in the calculations for the draft Federal budget for 2001. The predicted inflation rate of 12-14% corresponded to a 4-5% increase in GDP in 2001. According to the calculations of the Bank of Russia, with such a combination of the indicated macroeconomic parameters, the increase in demand for the ruble money supply, which forms the M2 aggregate, could amount to 27-34%. At the same time, given the instability of the velocity of money circulation and the high degree of uncertainty in the formation of demand for money, the Bank of Russia proceeded from the inappropriateness of strict control over the money supply and assumed a flexible response to changes in demand for the national currency, subject to a decrease in inflation and inflation expectations. For these purposes, this year the Bank of Russia introduced the use of elements of target inflation into the practice of implementing monetary policy.

Monetary policy was carried out under the conditions of a floating ruble exchange rate regime, which made it possible to ensure the adaptation of the economy to changing external economic conditions and ensured the possibility of achieving an equilibrium exchange rate in the long term.

In January - July 2001, the inflation rate came very close to the figures that constitute the annual target: over the seven months of 2001, consumer prices increased by 13.2%. Based on these results and available forecasts, inflation in 2001 will exceed original targets but will be lower than last year. Inflation in 2001 was significantly influenced by factors outside the control of the Bank of Russia. These include rising prices and tariffs for paid services to the population, primarily for housing and communal services and passenger transport, as well as increasing prices and tariffs for goods and services of natural monopolies.

However, it should be taken into account that economic growth this year is ahead of the official forecast and, according to estimates, may exceed 5%. By pursuing a flexible monetary policy, the Bank of Russia supported economic growth, contributing to the gradual saturation of the economy with money in conditions of economic growth.

In the conditions of a strong balance of payments and the accumulation of gold and foreign exchange reserves by the Bank of Russia, the dynamics of the money supply in 2001 was determined primarily by purchases of foreign currency by the Bank of Russia on the domestic market, although the intensity of the impact of this factor decreased somewhat compared to last year. Thus, in the first seven months of 2000, the gold and foreign exchange reserves of the Russian Federation increased by $10.8 billion, and in the corresponding months of 2001 - by $8.5 billion. The volumes of foreign currency purchases by the Bank of Russia were based on the need to achieve a stable long-term equilibrium exchange rate for the ruble, while sterilization of free liquidity was carried out using the monetary regulation instruments available to the Bank of Russia.

The fairly favorable situation with public finances, which developed as a result of the receipt of above-plan revenues, contributed to the accumulation of significant funds in the accounts of budgets of all levels and state extra-budgetary funds in the Bank of Russia, which, on the one hand, in the short term, reduced the severity of the problem of sterilization of free banking liquidity, and on the other hand, it increased the dependence of the state of the monetary system on financial flows associated with the centralized distribution of funds. Thus, uneven spending of budget funds throughout the year influenced inflation spikes in certain months, distorting inflation expectations.

During the first half of 2001, the trend towards a gradual increase in the monetization of the economy continued - the monetization coefficient increased during this period from 12.5% ​​to 13.4%.

In 2001, the positive trend towards a decrease in the velocity of money circulation continued. According to data for seven months of 2001, the velocity of money circulation in average annual terms, calculated using the M2 monetary aggregate, decreased by 7.5% - from 8 to 7.4. This process was facilitated by the balanced policy of the Bank of Russia in the money and foreign exchange markets, the improvement in the condition of the banking sector, and the growth in income of enterprises and the population.

At the same time, the degree of confidence in the banking system has not yet been fully restored, and the growth of household incomes has not reached the level at which a significant increase in personal savings is possible. This led to the fact that, compared to last year, the share of time deposits in the structure of the money supply even decreased slightly. Thus, if at the beginning of July 2000 their share was 24.8%, then by the beginning of July 2001 it dropped to 23.7%. Such dynamics of low-liquid components of the money supply restrains a further more significant decline in the velocity of money circulation. At the same time, the share of the most liquid component of the money supply - cash - remains at a high level (about 36% in the M2 aggregate), and in certain periods it increases sharply due to uneven spending of budget funds on the social sphere.

Based on the results of the first seven months of 2001, the money multiplier increased slightly, which was primarily due to a change in the level of liquidity of the banking system compared to the previous year. The value of the money multiplier, calculated using the broad monetary base, was 1.74 as of August 1, 2001, compared to 1.59 at the beginning of 2001. In the dynamics of the money multiplier, the main factor restraining its increase remained, just like last year, the preservation of a significant share of cash.

As in other countries, in Russia the prevailing monetary conditions were determined not only by the policies of the Bank of Russia, but also by the interaction of monetary policy measures with the decisions of financial market participants. Economic growth that continued in 2001 and a certain reduction in credit risks, despite the fairly high inflation rates observed in January - June in the conditions of a stable refinancing rate of the Central Bank of the Russian Federation, led to a slight decrease in interest rates on loans provided by commercial banks to enterprises and organizations. The weighted average rate on loans to legal entities (including Sberbank of Russia) for a period of up to 1 year decreased from 18.6% in January to 17.5-18.0% in April - June of this year. At the same time, the decrease in interest rates was not absolutely sustainable; for example, in May and July 2001, compared with previous months, the weighted average rate on loans to legal entities for up to a year increased.

Thus, the analysis of the state of the monetary sphere for 2001 indicates the adequacy of the monetary policy pursued in 2001 to the goals and objectives set for this year. Taking into account the emerging trends in the dynamics of demand for money, we can expect that overall for the year the growth of the money supply will not go beyond the forecast range.

In order to ensure consistency between the demand for money and the money supply, the Bank of Russia used the monetary policy instruments at its disposal to influence the liquidity of the banking system.

The resumption of Bank of Russia operations on the open market with its own bonds in the first half of this year was hampered by legislative restrictions, and the conduct of operations with government bonds was hampered by the absence in the Bank of Russia portfolio of government securities that were in demand among market participants. Therefore, the Bank of Russia's open market operations were limited to foreign exchange interventions.

Open market operations with Bank of Russia bonds, as well as with government securities (if the Government of the Russian Federation decides to re-register a sufficient part of their portfolio with the Bank of Russia into bonds with market characteristics) will expand the range of market instruments of monetary policy both for sterilization , and for temporary replenishment of banking liquidity.

3.2 Monetary policy objectives for 2002

The main task for the Bank of Russia in the medium term remains a gradual reduction in inflation, for which in each subsequent year the inflation level should be lower than the actual inflation of the previous year. Such a statement of the problem will facilitate the implementation of consistent steps towards reducing macroeconomic risks, consolidating the positive trends formed in previous periods, improving expectations, ensuring the growth of savings and investments, and thereby maintaining the conditions for long-term economic growth. The reduction in inflation in 2002 largely depends on the extent to which the Government of the Russian Federation will be able to prevent non-interest budget expenditures from exceeding the planned level and unevenness in the implementation of structural policy measures and the expenditure of budgetary funds.

Taking measures to reduce inflation will support economic growth and help create conditions for increasing employment and income of the population, as provided for in the country's economic development programs for the medium and long term and the draft federal budget for 2002.

Since, in accordance with these programs, active implementation of structural reforms will continue in 2002, which will lead to increases in prices and tariffs for goods that are basic to the consumer price index, this trend in the short term requires the active participation of the Government of the Russian Federation in actions to limit inflation, including the formation of a financial reserve from additional federal budget revenues received in 2001 and 2002.

Monetary policy for the coming year, as in the current year, is formed and will be carried out on the basis of two basic principles. The first is the continued application of elements of the target inflation method. The second is the use of the M2 monetary aggregate as an intermediate reference point for monetary policy.

The first basic principle comes from the recognition that currently in Russia there is not a single indicator whose relationship with ultimate goal monetary policy would be stable, reliable and fairly predictable. Therefore, in order to achieve the final goals of monetary policy, the Bank of Russia will analyze and take into account wide range indicators and their impact on inflation.

The second basic principle for the formation and implementation of monetary policy for 2002 is to use the M2 money supply aggregate as a monetary indicator, with a certain short-term time lag influencing inflation.

In recent years, Russia has not observed a close correlation between the dynamics of the M2 indicator and inflation. In this regard, the role of M2 in the analysis and assessment of inflation processes is noticeably reduced. However, in conditions of insufficient development of financial markets, analysis of the dynamics of the M2 monetary aggregate is useful for assessing current monetary conditions, inflation expectations and future inflation.

In Russian economic conditions, it is currently most advisable to use these principles. Despite the increasing importance of interest rates in the implementation of monetary policy, the Bank of Russia cannot use short-term interest rates as a guideline in its implementation due to the insufficient development of financial markets and the limited role of credit in financing the economy. In the future, in the medium term, while maintaining the floating exchange rate regime, it is possible to increase the role of interest rates both in the formation and implementation of monetary policy.

Monetary regulation is aimed at achieving a balance between money supply and demand for money. However, the long-term assessment of the latter is becoming increasingly difficult. In particular, this is due to different durations and unstable time lags between the dynamics of individual components of the money supply and price increases, uncertainty of inflation and devaluation expectations affecting the use of financial instruments in national and foreign currencies by economic agents.

The demand for money in 2002 will be formed mainly on the basis of trends that developed in 2000-2001, as well as under the influence of budgetary and structural policy measures proposed by the Government of the Russian Federation. First of all, important factors will be such factors as a reduction in the level of taxes, which can contribute to the growth of disposable income of legal entities and individuals, the income policy pursued by the state, which has an impact on the gradual increase in the share of household income in GDP and an increase in the savings rate in the cash income of the population , the possibility of increased demand for ruble assets in the context of further strengthening of the real exchange rate of the ruble while maintaining a strong balance of payments, the degree of intensification of credit activity and the growth of organized savings of the population, an increase in the need for funds to service transactions, and others.

In this case, it is necessary to take into account possible contradictory trends in the dynamics of the velocity of money circulation. On the one hand, we can expect a continuation in the coming year of the process of increasing the degree of monetization of payments, but on an objectively smaller scale than before (according to June of this year, cash payments by the largest Russian taxpayers and monopolistic organizations in industry in the total volume of paid products amounted to 77.3%, and in the same period in 2000 - 67.7%). At the same time, a change in the nature of the relationship between the speed of inflation processes and the growth rate of the money supply, subject to an irreversible reduction in inflation, makes it possible, as world experience shows, to more intensively saturate the economy with money. On the other hand, despite the growth of disposable cash incomes of the population and the strengthening of the ruble in real terms, in the short term one should not count on a significant increase in organized savings of the population, especially for long periods, due to the insufficiently high degree of confidence in the banking system, the lack of a deposit guarantee system, low interest rates on bank deposits. Therefore, the degree of decline in the velocity of money circulation in 2002 may be somewhat less than in the current year.

Taking into account the analysis of the influence of these factors and trends in accordance with macroeconomic goals and forecasts, the demand for money (according to the M2 aggregate) in 2002, according to the Bank of Russia, will increase by 24-28%.

The Bank of Russia will focus on the estimated growth parameters of the M2 monetary aggregate, but at the same time considers it possible to go beyond these boundaries due to significant uncertainty in the development of the economic situation. The deviation of the actual increase in the money supply from the forecast quantitative targets in the short term does not mean immediate automatic policy adjustment without a thorough analysis of the reasons for the deviations, the expected duration of the influence of the factors that caused them and the state of other economic indicators.

In 2002, the Bank of Russia will continue to apply the operating procedure for monetary policy based on control over the growth of money supply. At the same time, regulation of liquidity of the banking system will be carried out with the active use of market methods. The Bank of Russia will take into account both intra-annual and intra-month changes in the banking system’s demand for reserves, and, if necessary, the level of liquidity of the banking system will be promptly adjusted in cases of both a shortage and a tendency to accumulate free bank reserves, which will help smooth out sharp fluctuations in interest rates rates in the money market and removing pressure on the foreign exchange market.

The formation of the money supply in the volumes necessary to satisfy the economically justified demand for the national currency will be facilitated by the continuation of the trend toward an increase in the money multiplier in 2002.

The expansion of banks' lending activity, supported by the growing economic demand for credit resources, requires credit institutions to carefully monitor the risks associated with this process. A fairly common consequence of a sharp expansion of credit issuance by banks without proper risk control at the stage of economic growth in various countries is an increase in loan defaults and losses in the next phase of the economic cycle. In this regard, Russian banks must pay constant attention to the quality of loans issued and the formation of appropriate reserves to cover risks. For its part, the Bank of Russia will continue to improve the prudential supervision regime for banks and monitor the level of banking risks.

Let us show the conditions for increasing the effectiveness of monetary policy.

Influence of budgetary factors

Increasing the effectiveness of monetary policy largely depends on the actions of the Government of the Russian Federation in the budgetary sphere.

In recent years, the stability of the macroeconomic situation, significant economic growth and the policy of austerity in government spending have led to a noticeable stabilization of the public finance system. In the near future, an important goal of budget formation is to establish a level of government spending that would reduce public debt in the face of a reduced tax burden and slower economic growth.

In 2002, the Federal Government's fiscal position will need to be further strengthened to the extent that debt payments can be made on time and in full, while government revenue drivers are gradually weakening as the external debt service burden is still significant from a macroeconomic perspective. In this regard, it is necessary to form a financial reserve to optimize the state of the budgetary sector, taking into account the upcoming external debt servicing schedule.

The federal budget surplus planned by the Government for the first time in 2002 (1.6% of GDP) is not a basis for easing monetary policy, since the inflation rate remains quite high.

The Government of the Russian Federation plans to direct the federal budget surplus to repay the public debt in the amount of 68.6 billion rubles and to form a financial reserve as part of the sources of financing the federal budget deficit - in the amount of 109.7 billion rubles.

To ensure macroeconomic stability and achieve the inflation target, it is important:

· preventing non-interest expenses from exceeding the planned level;

· ensuring uniform financing of budget expenditures throughout the year and their use by budget recipients to eliminate short-term spikes in inflation;

· formation of a financial reserve to maintain budget liquidity in the future. A financial reserve that accumulates additional state revenues from exports during a period of favorable foreign economic conditions will make it possible to make payments on external debt, thereby contributing to the sterilization of monetary liquidity.

Increasing the effectiveness of monetary policy in 2002 will also be facilitated by the completion of the transitional stage of implementation of the Concept of the functioning of the single account of the federal treasury of the Ministry of Finance of Russia for accounting for income and funds of the federal budget and the necessary work to prepare the final stage of implementation of this Concept, as well as the intensification of the process of transition of budget execution subjects of the Russian Federation and local budgets for the treasury system.

For the next three years, the downward trend in federal government debt is projected to continue. The policy regarding external debt will be aimed at reducing its principal amount annually, which will lead to a reduction in interest payments on it. In the domestic market next year, the Ministry of Finance of the Russian Federation, as part of its debt refinancing policy, plans to attract slightly more funds than is required to repay the principal amount of the debt. Perhaps this will help overcome stagnation in the government securities market. At the same time, the Ministry of Finance of the Russian Federation does not undertake sufficient obligations to pay off the debt in foreign currency to the Central Bank of the Russian Federation in the near future and provides for the re-issuance on market conditions of illiquid government securities held in the portfolio of the Bank of Russia only in an insignificant amount relative to the total size of this portfolio. From the point of view of ensuring macroeconomic stability, the Bank of Russia considers it important, in the context of the expected surplus of the federal budget, to direct part of the additional revenues to early repayment of the debt of the Government of the Russian Federation to the Bank of Russia, which will help create favorable preconditions for sustainable macroeconomic development in the medium term.

Thus, in order to increase the efficiency of monetary policy in 2002, it is advisable to implement a number of measures in the field of public debt management:

· reissue federal loan bonds with constant coupon income, owned by the Bank of Russia as of January 1, 2002, in the amount of up to 30.0 billion rubles into government securities with the payment of coupon income corresponding to the rates on the organized securities market, or repay these securities ahead of schedule paper;

· in order to reduce the debt of the Russian Ministry of Finance to the Bank of Russia, the Ministry of Finance will early buy OFZ-PD owned by the Bank of Russia in the amount of up to 3.0 billion rubles;

· repay the bills of the Ministry of Finance of Russia owned by the Bank of Russia, the redemption period of which begins in 2002, and pay interest on them;

· repay the corresponding part of the debt on funds in foreign currency provided by the Bank of Russia to the Ministry of Finance of Russia through Vnesheconombank to make payments for the repayment and servicing of the state external debt of the Russian Federation;

· carry out timely payment of coupon income on bonds of the internal state foreign currency loan and the state foreign currency loan of 1999.

Development of the banking sector

The main goal of further reform of the banking sector is the formation of a developed banking system that corresponds to international ideas about modern banking business, aimed at meeting the needs of clients for quality banking services and promoting the economic development of Russia.

The development of the Russian banking sector in 2002 will be determined by the practical implementation of the main strategic and tactical objectives of its reform, which involve further strengthening the stability of credit institutions and minimizing the possibility of a systemic banking crisis, improving the quality of the functions of accumulating savings of the population and enterprises and their transformation into loans and investments, development of market discipline and transparency of the activities of credit institutions, strengthening of corporate governance. The successful solution of these tasks largely depends on the promotion of general market transformations in the Russian economy, primarily including structural, tax and legal components.

Trends in the development of the economy and the banking system in 1999-2001 give reason to believe that in the near future there will be a further increase in the real volume of banking operations, and the interest of banks in financial services to the real sector of the economy will increase. This will create the necessary preconditions for increasing the share of loans to enterprises and organizations in the assets of the banking sector, which will ultimately lead to an increase in the ratio of the main indicators of banking activity and the country's GDP.

· An additional impetus for reforming the banking sector can be given by the adoption of a number of fundamental amendments to the current legislation aimed at further strengthening the legal foundations of banking activities. In particular, the Federal Law “On Combating the Legalization (Laundering) of Proceeds from Crime,” adopted in August 2001, will help reduce banking risks and increase confidence in credit institutions.

It is necessary to complete the adoption of the federal law regulating the functioning of the system of protection (guarantee, insurance) of deposits, as well as a new edition Federal Law"On currency regulation and currency control."

Measures to improve the taxation system for credit institutions can have a positive impact on the development prospects of the banking sector.

The attraction of foreign capital is important for the development of the banking sector, for which there are currently no restrictions on participation in the capital of Russian banks. Measures to strengthen the legislative support the rights of investors and creditors, reducing non-commercial investment risks, increasing the transparency of information on the financial condition of credit institutions.

In order to increase the efficiency and quality of analysis of the financial condition of credit institutions and the effectiveness of control over the reliability of bank statements, comprehensive methods for analyzing the financial condition of credit institutions will be introduced both at the stage of documentary supervision and at the stage of inspections, aimed at identifying problems of credit institutions at the early stages their occurrence.

Conclusion

The transformation of Russian society into a mixed system, based on a socially oriented market economy, means that the nationalized economy must be replaced by a multi-sector mixed economy. This also presupposes fundamentally new approaches to the role and functions of the state in such an economic system.

In general, all modern Western theories that in one way or another develop the problem of the economic role of the state in a market economy are located between two concepts that can be considered as an expression of extreme positions. This is, on the one hand, neo-Keynesianism, which advocates expanding government intervention in the economy, and on the other hand, neoclassical models calling for a consistent reduction in government regulation. All other theories, in essence, represent a certain synthesis of the noted extreme positions. The emergence of these theories is largely the result of criticism of the two above-mentioned opposing approaches to the scale, boundaries and methods of state regulation of the economy.

State regulation is a system that includes heterogeneous elements: goals, methods, tools, multipliers, etc. The more successful the combination of heterogeneous elements of the system, as well as the more it and its structure correspond to the current economic environment, the more effectively socio-economic problems beyond the control of market.

At the same time, active government intervention is accompanied by negative side effects. So-called flaws or “failures” of the state appear. State flaw - it is its inability to ensure efficient distribution of resources and compliance of socio-economic policies with socially accepted ideas of justice.

One of the key elements of state regulation of the economy is monetary policy. Monetary policy is the regulation of the money supply and money circulation in a country through direct government influence or influence through the country’s central bank. Monetary policy ensures the proper functioning of the monetary system and money circulation, extending its influence to both money and prices.

As is known, the economic policy pursued in Russia at the first stage of market reforms in 1992-1993 was called monetarist by many, which should have emphasized its monetary orientation. The policy pursued at that time was, in a certain sense, truly monetary, since it was based on the liberalization of prices, regulation of the money supply in circulation, and the transition to a two-tier banking system with all the ensuing consequences. But the actions of reformers in the field of transforming central planning, organizational management structures, forms and relations of ownership took the policies pursued during that period far beyond the limits of purely monetary ones.

Monetary policy, by analogy with fiscal policy, sets the goals of stabilization, increasing the stability and efficiency of the economic system, overcoming crises, ensuring employment and economic growth. At the same time, fiscal policy is more clearly countercyclical in nature, related to the budget and taxes, while monetary policy is limited to stabilizing monetary circulation and is focused mainly on the money supply.

Accordingly, the targets of monetary policy are unique. This is stabilization of the price level, suppression of inflation, stabilization of purchasing power and the exchange rate of the national currency in the domestic and foreign markets, ensuring stable money circulation in conditions of free market prices, regulation of the money supply, demand and supply of money through the banking system.

Macroeconomic monetary policy in its monetary form is primarily associated with the impact on the money supply. Monetary policy is considered tight if the government reduces the money supply, limits emissions, and helps maintain high interest rates for borrowing money. Conversely, monetary policy is called soft if the state promotes an increase in the money supply or at least does not interfere with it, weakly restraining the release of new money into circulation and helping to obtain cheap loans. The state carries out its emission policy mainly through the central bank of the country.

Refinancing policy, open market operations policy, reserve policy, and liquidity policy act as components and at the same time instruments of state monetary policy. All these instruments taken together make it possible to regulate the money supply in circulation and individual monetary aggregates and thereby have an indirect impact on the dynamics of market prices, inflation levels, commodity-money relations between producers and consumers, market exchange, income and expenses of market entities.

The refinancing policy, which is also called the accounting policy, is an expression of the interest rate policy; it consists in the influence of the central bank through the interest rate on the volume of credit resources and, accordingly, the money supply in circulation. The Central Bank sets a discount rate of interest, according to which it rediscounts bills from commercial banks and provides them with loans. More broadly, commercial banks. They acquire, buy credit money from the central bank and then resell it to their borrowers, carrying out refinancing. So the central bank is able to influence the price of credit money in the financial market. By raising the price, increasing its discount rate (at which the bills of commercial banks sold to it are taken into account), the central bank restrains the demand for loans and narrows the money supply in circulation, and by reducing the discount rate it helps to increase the money supply. The Central Bank is also able to establish restrictive contingents for refinancing, having a direct impact on the amount of monetary expansion.

The refinancing policy is component policy for regulating interest rates, interest policy, which can be carried out not only by the central bank and commercial banks, but by anyone. lenders who lend money at interest. However, in the latter case, there is a need to go beyond the boundaries of state monetary policy.

The central bank is able to regulate the money supply and influence monetary circulation through open market operations, acting as a seller or buyer of government securities. The very issue of such securities in the form of bonds and treasury bills becomes an act of state monetary policy. By purchasing government securities and organizing purchases and sales on the open market, the central bank contributes to the implementation of a certain monetary policy. By selling securities, the central bank withdraws money from circulation and narrows the money supply, and by buying securities on the open market, the central bank expands the money supply, carrying out, as it were, an additional issue.

The state is able to have an effective impact on the size of the active money supply by implementing a reserve policy through the central bank. The Central Bank has the right to oblige commercial banks to hold a certain part of their assets in the form of a non-interest-bearing reserve at the Central Bank. The higher the rate of such reservation, the less ability commercial banks have to freely operate with their funds, that is, the money supply decreases. A decrease in the reserve ratio leads to an increase in the money supply in circulation. If there is a shortage of money in circulation, the reserve ratio should be reduced, and if there is an excess of money, it should be increased.

The supply of money by commercial banks depends on the availability of money issued by the central bank. So the central bank, and through it the state, has the ability to regulate the supply of money with on the part of commercial banks in the course of implementing the policy of ensuring liquidity by changing the amount of money made available to commercial banks for their operations.

Despite the fact that the state, using the central bank, holds in its hands powerful means of influencing the money supply and carrying out monetary policy, in a number of critical situations it turns out to be far from omnipotent. A typical example here is the crisis of the summer of 1998, which arose largely due to the irresponsible policies of the central authorities. I would like to hope that the implementation of the new government program for the implementation of monetary policy will be the condition that can ensure high-quality and stable growth of the domestic economy.

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ANNEX 1

Refinancing rate of the Central Bank of the Russian Federation in 1998-2000.

See: Keynes J.M. General theory of employment, interest and money. M., 1978. S. 48-52.

There, p. 78-81.

See Economic Theory. / Ed. Kamaeva V.D. M., 2000. S. 482-484.

Keynes J.M. General theory of employment, interest and money. M., 1978. P. 144.

Illarionov A. Myths and lessons of the August crisis // Questions of Economics. –1999. - No. 11. pp. 31-33.

State regulation of a market economy. M., 2001. P. 113.

Illarionov A. Myths and lessons of the August crisis // Questions of Economics. –1999. - No. 11. pp. 36-39.

Gerashchenko V.V. On monetary policy and the course of restructuring of banking systems // Money and Credit. –2000. - No. 6. – P. 5-13.

All digital indicators in this chapter cit. from: Main directions of the unified state monetary policy for 2002 // money and credit. – 2001. -No. 12. – P. 3-39.

We will look at the effectiveness of monetary policy in developed countries using the example of the United States of America.

In 1978, the US Congress passed legislation requiring the Federal Reserve to set limits on the growth of money and credit. The “Full Employment and Balanced Growth Act” was also adopted. It indicated the goals of monetary policy: ensuring high level employment and maintaining price stability. To achieve this, the Federal Reserve was required to annually announce the amount of money supply and credit resources for the following year, which should affect the expected functioning of the economy and the rate of inflation.

This policy pursues three main goals: first, limiting price increases; second, communicating to the public the Federal Reserve's future strategy so that businesses and individuals can align their economic behavior with the central bank's intentions. And thirdly, strengthening the accountability and responsibility of the Central Bank for its decisions and achieving its intended goal.

The monetary transmission mechanism of the United States has evolved over the past two decades as the economy has become more open and changes have occurred in the exchange rate system. The relationship between monetary policy and foreign trade has always been a major concern for smaller and more open economies such as Canada and Britain.

From 1979 to 1982, the Federal Reserve decided to slow the rate of money supply growth in order to combat inflation. This process led to a rise in interest rates on dollar-denominated assets. Investors, attracted by high dollar interest rates, began to purchase American securities, thereby increasing the dollar exchange rate.

The high price of the dollar stimulated US imports and negatively impacted US exports. Net exports fell, reducing aggregate demand. This led to a decline in both real GDP and the inflation rate.

We see in this example that foreign trade leads to the emergence of another link in the monetary transmission mechanism. But the focus of monetary policy fusion on foreign trade is the same as the focus of its impact on domestic investment; Through both of these channels, an increase in the price of money reduces output and prices. The impact on trade increases the impact on the domestic economy. However, connections that occur only in an open economy (the US economy) create additional complications for policymakers.

The first complication arises from the fact that the quantitative relationships between monetary policy, exchange rates, foreign trade and output, and prices are extremely complex. Modern economic models cannot accurately predict the impact of changes in monetary policy on exchange rates. Exchange rates and trade flows will be simultaneously influenced by the fiscal and monetary policies of other countries.

Foreign economic relations expand the sphere of influence of economic policy. Those responsible for implementing domestic macroeconomic policies must take into account the consequences of their actions occurring abroad. A rise in domestic interest rates changes interest rates, exchange rates and trade balances abroad, and these changes may be undesirable. In countries with huge external debt, rising interest rates led to more debt. The situation was complicated by the fact that these countries owed billions of dollars to American banks, and massive loan defaults could cause enormous damage to the US financial system. Due to changes in the structure of foreign trade, the United States faced stagnation in sectors oriented to the outside world (in manufacturing and mining, as well as in agriculture).

S. ANDRYUSHIN
Doctor of Economic Sciences
Head of the Institute of Economics RAS
Professor of M.V. Lomonosov Moscow State University
V. BURLACHKOV
Doctor of Economic Sciences
main Researcher Institute of Economics RAS
Professor of the Academy of Labor and Social Relations

Over the past two decades, the development and implementation of monetary policy (MP) in developed countries has been largely determined by integration processes within the financial market. The wide spread of derivative financial instruments simultaneously circulating in two or more segments of the financial market led to the reform of market regulation institutions and the creation in a number of countries (Australia, Great Britain, Sweden, Japan) of mega-regulators operating in parallel with central banks. At the same time, intensive securitization of assets took place in the banking sector. A paradoxical situation arose: new loans were secured by securities issued against previously issued loans, which created a risk of depreciation of the collateral. If the borrower refuses to increase the collateral commercial Bank could resort to selling securities, thereby increasing their supply on the market.

With the onset of the global financial crisis and the lack of liquidity, sales of collateral intensified the fall of the stock market. Banks preferred to refrain from interbank lending and actually hoarded funds. The money multiplication mechanism has stopped. At the same time, it turned out that the central banks of developed countries do not have sufficient and effective tools within the monetary policy framework to combat the crisis. Monetary authorities were forced to improvise, trying to find adequate instruments for pumping liquidity into the economy. From lenders of last resort, central banks have effectively become financial sector sponsors. This trend has not bypassed the Russian financial market.

The global financial crisis not only led to a reassessment of the functions of the central bank, but also predetermined changes in the instruments, goals, methods and mechanism of monetary policy. Under the current conditions, it became necessary to reconsider the methodology for its development and implementation.

Financial crisis and modification of monetary policy

In the pre-crisis period, an idea was formed according to which the securitization of assets and the use of financial derivatives provide diversification of risks and thereby represent an element of self-regulation of the market system. Another element of it was the multiplication of money as a result of credit operations. But subsequent events showed that in conditions of a full-scale crisis, both mechanisms of self-regulation of the economy do not work. Moreover, risk hedging using a wide range of derivatives has created systemic risk affecting the entire financial system.

The global financial crisis, which began in August 2007, was triggered by excess liquidity in the US economy. This liquidity entered the stock and real estate markets as a result of policies to stimulate aggregate demand. The Fed's leadership justified its actions by the need for preventive measures that could reduce the perceived risks of the financial sector. As a result, the attraction of borrowed resources, and hence the use of financial leverage, rapidly increased. The high degree of leverage of the financial sector, in our opinion, was not fully taken into account when developing monetary policy in developed countries.

The beginning of the financial turmoil was the unexpected and complete stop of operations in several segments of the financial sector, in particular the market for asset-backed commercial papers (ABCP), auction-rate securities (ARS), secured bonds residential mortgage-backed securities (RMBS), collateralized debt obligations (CDO). This led to a loss of liquidity in the interbank lending market. Later, serious difficulties arose in the credit default swaps (CDS) market. As a result, the total losses from the fall of all stock markets in the world for the year (August 2007 - August 2008), according to expert estimates, amounted to about $16 trillion.

In such conditions, the Fed, the ECB, the Bank of England, the central banks of Switzerland and Japan actually came out in support of not only the banking sector, but also the stock market, turning from lenders of last resort into market makers of last resort. Thus, the leading central banks accepted responsibility for refinancing the economy, for the actions of speculators in the stock market and inflating speculative bubbles. On October 13, 2008, the US Federal Reserve System, the ECB, the central banks of England, Switzerland and Japan announced the provision of unlimited (of course, within reasonable limits) dollar liquidity to the global financial system by the Fed until the beginning of 2009 (according to preliminary estimates, we are talking about at least than 600-700 billion euros) (1). The measures taken are of an emergency nature. During their implementation it turned out that there were no necessary tools providing liquidity to the banking sector. They had to be created hastily.

Thus, in December 2007, the Federal Reserve announced the launch of TAF liquidity auctions, and on October 16, 2008, the ECB announced the holding of LTROs/SLTRO auctions, at which banks can receive loans for a period of one to six months. This instrument complemented the traditional “discount window” through which banks receive loans for periods ranging from “overnight” to one month. The introduction of TAP and LTROs/SLTROs was intended to provide loans against a list of collateral, the list of which was expanded to include assets rated from A- to BBB-.

Since March 2008, the Fed began implementing a program to provide primary dealers with US Treasury bonds against less liquid securities. This program is called Term Securities Lending Facility - TSLF. Within its framework, the Federal Reserve accepts mortgage bonds of various tranches as collateral. In the current market situation, their ratings turned out to be conditional. In fact, the Fed took upon itself the valuation risk of these securities. The Primary Dealer Credit Facility (PDCF) program was also established in March 2008 to provide resources to primary dealers secured against a broad range of debt securities, including corporate and municipal bonds.

While the TSLF enabled the Fed to provide U.S. Treasuries as collateral to primary dealers, the PDCF allowed direct lending to primary dealers against a broad range of bonds accepted by the Fed as collateral. Obviously, such activities of the monetary authorities exacerbate such well-known consequences of information asymmetry in the credit market as false choice and moral hazard.

The ECB also undertook large-scale operations from the very beginning of the crisis to increase liquidity in the banking sector, establishing a wide range of securities that it accepted as collateral for loans to commercial banks. It included not only asset-backed bonds, including mortgages, but also shares of certain corporations. All of them must be denominated in euros. About 8 thousand banks received the right to use the ECB's "discount window". The ECB took upon itself the assessment of the collateral in the absence of its market price.

Unlike the Fed and the ECB, the Bank of England at the beginning of the financial crisis did not carry out extraordinary operations to increase liquidity, but limited itself to supporting the interest rate in the interbank market. But in September 2007, it began to actively conduct repo operations, accepting a wide range of bonds, including mortgage bonds, as collateral. In April 2008, it was announced that the Bank of England would provide commercial banks with British treasury obligations secured by bonds, including mortgage bonds. This form of lending is called the Special Liquidity Scheme (SLS). On October 8, 2008, the UK government announced a three-year plan to help the country's financial market. Valued at £500 billion. Art., it involves providing additional liquidity to the banking (50 billion), stock (200 billion) and interbank (250 billion) markets secured by short- and medium-term debt obligations of the largest financial market players (primarily commercial and mortgage banks of the United Kingdom) ( 2).

The situation on the global derivatives market is also difficult. Its real volumes ($14.5 trillion at the end of 2007), primarily due to the “repackaging” of financial instruments, contributed to the formation of systemic risk and macroeconomic instability during the crisis. This market is still not regulated by anyone in the world. At the same time, the cost indicators for the execution of derivatives transactions should not be confused with the nominal volume of all mutual obligations existing in this market, which amounted to $692 trillion as of July 1, 2008 (3)

Thus, central banks, firstly, created additional instruments to provide liquidity to the financial sector; secondly, they began to accept mortgage bonds as collateral in the absence of their real market value. By accepting the bonds of collapsed markets as collateral, central banks assumed the valuation risks of these securities, effectively subsidizing the financial sector. Such activities are fraught with the threat of an inflationary explosion in the global economy and significantly increase the instability of the global financial system.

Issues of monetary policy methodology in leading countries

The situation in the field of global finance is largely determined by the peculiarities of the monetary policy of leading countries. Thus, one of the most pressing problems of the monetary policy theory is the reaction of monetary authorities to rising prices of financial assets. A steady increase in exchange (and over-the-counter) quotations leads to the formation of a speculative bubble in the stock market or real estate market. Its collapse may have poorly predictable macroeconomic consequences, in particular lead to a chain of bankruptcies of financial institutions.

Between 1997 and 2008, the world economy experienced several speculative bubbles in financial markets. But to date, practical methods for their prevention or localization have not been developed. Moreover, the question of the possible strategy of the monetary authorities to prevent the emergence of such bubbles has not been resolved even at the theoretical level. In the economic literature, two approaches to this problem have been formed.

According to the first approach, monetary authorities should not target the prices of financial assets and use the interest rate to reduce activity in the stock market. In particular, B. Bernanke and M. Gertler note that “within the framework of inflation targeting, an answer can be given to how central banks should respond to the dynamics of prices of financial assets; changes in the prices of these assets should affect monetary policy only to the extent , in which they influence the central bank's inflation forecast" (4). A similar opinion is shared by W. Buiter, who believes that the prevention of speculative activity should be ensured not by monetary policy measures, but by regulation of the stock market (5). This position is disputed by supporters of the second approach. Thus, N. Roubini considers the main arguments of opponents of targeting prices of financial assets untenable. He notes that one cannot argue against opposing speculative bubbles on the basis that there is significant uncertainty associated with their occurrence (6). According to this logic, monetary authorities can use monetary policy instruments to reduce activity in the stock market.

In economic analysis, it is traditionally assumed that the price dynamics of financial assets are determined by the rational expectations of business entities regarding the net present value of future income on financial assets. Accordingly, the emergence of speculative bubbles is caused by incorrect assessments of their risks by investors and insufficient consideration of fundamental market conditions. Obviously, this approach does not take into account the psychology of market players, their belief in the opportunity to exit the game before others, taking profits. Therefore, speculative bubbles are not the result of erroneous risk assessments, but an inevitable attribute of the stock market game, the mechanism of which is discussed in detail in the book by the founder of the hedge fund Traxis Partners (former top manager of Morgan Stanley) Barton Biggs (7).

At the same time, in practice, difficulties may arise in identifying upward trends in the stock market. They are not only speculative, but also reflect fundamental factors in the dynamics of corporate value, including the consequences of technological shifts. At the same time, the price dynamics of financial assets may be under pressure from excess liquidity in the global economy. Then the rise in asset prices will occur for the same reasons as the rise in consumer prices. In this regard, C. Goodhart proposed calculating the inflation index taking into account stock quotes (8).

Countering speculative bubbles is, of course, of great importance for ensuring macroeconomic stability. However, using the interest rate for these purposes would mean separating its dynamics from profitability in the real sector of the economy. A decrease in the money supply in the event of speculative trends in the stock market would also have negative consequences for him. Therefore, the main measures to counter speculative bubbles should, in our opinion, be carried out by stock market regulators.

At the same time, the negative consequences of speculative bubbles in the stock market for the banking sector are obvious. The depreciation of securities accepted as collateral provokes a crisis. The sale of collateral if the borrower fails to fulfill its obligations increases supply in the stock market. In the situation under consideration, the risks of a systemic crisis are extremely high. This is why this problem requires a strategic solution. Here it is important to clearly distinguish between the banking sector and the stock market. Banks should establish reserve requirements for stocks and bonds accepted as collateral. It is necessary to introduce a ban on commercial banks accepting structured financial instruments as collateral, as well as instruments issued during the securitization of assets.

The financial crisis forced us to pay attention to an important feature of market processes - their nonlinearity, the absence of constants and laws of similarity in time series of economic indicators. As financial market studies have shown, the statistical distribution of returns on financial assets is not Gaussian (normal), but is a Pareto-Livi distribution with infinite dispersion. This means there is a high likelihood of significant and unpredictable fluctuations in market variables that could undermine financial stability.

This circumstance predetermines the need to interpret macroeconomic equilibrium not simply as the interdependence of sectors and markets, but as the balance of economic processes. From this point of view, disequilibrium is generated by different dynamics of specific elements of the system. Therefore, the state of an economic system can be considered balanced when a certain ratio of its elements is ensured, counteracting the emergence of turbulence. In this understanding, a manifestation of disequilibrium, in particular, is the multidirectional dynamics of the value of money in the domestic and foreign economies, that is, the combination of inflation with an increase in the exchange rate. Then the interest rate rises within the country, and it becomes more profitable for corporations to borrow abroad. For example, in Russia (as of July 1, 2008), this led to a sharp increase in external corporate debt - up to 454.8 billion dollars (including the banking sector - up to 191.3 billion dollars) (9). In addition, this manifestation of disequilibrium disrupts the process of transforming income into savings, and the latter into investment.

Features of the monetary policy of the Bank of Russia

In recent years, the monetary policy of the Bank of Russia as a whole has been characterized by a lack of consistency and clarity of methodological approaches. This was reflected in a vague definition of the main objectives of interest rate policy, the undeveloped methodology for assessing the demand for money and conceptual approaches to the formation of money supply, ineffective management of gold and foreign exchange reserves, the absence of systemic measures to form an international financial center on Russian territory, insufficient consistency of monetary policy with the state of the financial market and banking sector. In particular, when developing the main directions of monetary policy, the Bank of Russia does not determine its objects and features of the transmission mechanism.

It is important to take into account that the reaction of specific monetary policy objects to the actions of the monetary authorities is not the same with different combinations of macroeconomic factors and with changing dynamics of foreign economic conditions. Therefore, the choice of a specific monetary policy object as a priority should be made on the basis of an analysis of the entire complex of macroeconomic conditions. In world practice, the goals of monetary policy traditionally include ensuring the main indicators of macroeconomic stability - economic growth, employment, price stability, high financial market conditions. In this regard, it is necessary to distinguish the goals of the monetary policy from the targets for its implementation. The latter include: monetary aggregates; the size of interest rate fluctuations; inflation rates; exchange rate support level.

For the effective functioning of the monetary policy transmission mechanism in the Russian economy, it is necessary to identify its channels, which should be based on econometric analysis of a wide range of indicators. For example, the use of an interest rate depending on the characteristics of a particular country's economy can affect different economic indicators. Its growth can lead to an increase in inventories due to an increase in the cost of consumer credit. Obviously, a similar situation is real for an economy with a developed credit system. But a change in the interest rate may also affect the volume of lending to the real sector and, in addition, lead to a decrease in the money multiplier with a corresponding change in the dynamics of monetary aggregates. Therefore, the determination of specific channels of the transmission mechanism should be based on a study of the characteristics of the Russian economy.

During the period up to 2011, the Bank of Russia intends to largely complete the transition to an inflation targeting regime, which presupposes the priority of the goal of reducing it. Inflation targeting is usually understood as a type of monetary policy in which the central bank publicly announces a quantitative indicator of acceptable inflation and undertakes to ensure that prices rise within a specified range. The main mechanism for achieving this goal is the impact on the inflationary expectations of business entities. But at the same time, a short-term interest rate is used as a monetary policy instrument.

Thus, the desire of the central bank to exert a psychological influence on business entities and encourage them to calculate investment projects taking into account the subsequent reduction in inflation is based on regulating the “price” of money. In other words, inflation targeting is not based on objective interdependencies between macroeconomic indicators. Its basis is the stability of interconnected and balanced processes that have developed in the economic system in the previous period. Accordingly, the possibility of changing them is not taken into account by central banks that have announced a transition to inflation targeting.

Note that countries using inflation targeting (Austria, Great Britain, Canada, Sweden) achieved the same results in reducing price increases in the 1990s as were achieved by countries that did not rely on this version of monetary policy (USA, eurozone countries, Japan ). Inflation targeting is not used in any of the countries with undiversified exports. This is most likely due to the low degree of predictability of the macroeconomic situation in them, as well as significant fluctuations in the conditions of world commodity markets.

The planned transition of the Bank of Russia to inflation targeting may significantly increase the risks of macroeconomic instability. With this version of monetary policy, a freely floating exchange rate regime is used to mitigate the impact of external shocks on it. But failure to maintain the exchange rate within a certain range will lead to significant fluctuations in the ruble against other currencies and will provoke sharp inflows and outflows of speculative foreign capital. Under these conditions, the ruble exchange rate will be further impacted. Thus, the task set by the Bank of Russia to complete the transition in 2009-2011. to the inflation targeting regime cannot be considered necessary and justified.

The Bank of Russia also declared the task of turning the interest rate into the main instrument of monetary policy. It is expected to ensure a gradual narrowing of the range of interest rates for the Central Bank of the Russian Federation’s own operations and a reduction in the volatility of money market rates. However, the Bank of Russia did not formulate the task of structuring interest rate policy based on the regulation of short-, medium- and long-term interest rates.

We believe that the activation of the interest rate policy of the Bank of Russia, the strengthening of the impact of its credit policy on the real economy, as well as on the formation of the money supply, should consist of ensuring the structuring of interest rates and the implementation of measures to regulate them. The Bank of Russia should widely use global experience in conducting interest rate policy, in particular the system of regulating interest rates at different times for: main refinancing operations; long-term refinancing operations; fine-tuning operations; operations related to structural transformations (structural operations); concessional lending operations (marginal lending facility).

A prerequisite for ensuring a balance between the supply and demand of money is the availability of a reasonable methodology for assessing the demand for it. In the early 1990s, when assessing it in the Russian economy, a systemic mistake was made in that the demand for money was determined on the basis of GDP dynamics. Accordingly, when this indicator fell, a policy of compressing the money supply was implemented, which led to an increase in the interest rate and a huge budget deficit as a result of the inability of enterprises to pay taxes in cash during the total barterization of the economy. But it should be taken into account that it was during this period that the volume of intermediary transactions increased, the stock market developed, as well as the land and real estate markets. In such conditions, the fall in GDP was accompanied by an increase in the volume of transactions in the economy. Therefore, the demand for money did not fall, but, on the contrary, increased.

An assessment of the current demand for money based on the payment system turnover indicator, which is adequate to the volume of transactions in the economy, can, in our opinion, correctly reflect the needs of business entities for money. Over the past eight years, the growth rate of payment turnover in Russia has outpaced the growth rate of real GDP by almost seven times. The use of a rational methodology for assessing the demand for money based on the dynamics of the volume of transactions (payment turnover) will make it possible to carry out an effective and justified monetary policy and avoid the mistakes of the 1990s, which had catastrophic consequences for the Russian economy.

The accumulation by the Bank of Russia of significant international reserves and the prospects for their subsequent growth in the event of high conditions on the world energy market create the opportunity to form an international financial center in Russia as a tool for increasing the efficiency of investing these reserves through Russian financial institutions, bypassing foreign intermediaries (10). In this regard, the following measures should be implemented: the development of large banking holding companies (with the active participation of the state) and the restructuring of most commercial banks into other forms of activity, including the establishment of credit cooperation; formation of a large stock exchange with a single depository; development of the national gold market (platinum and diamonds) with quotations in rubles; adoption of transparent legislation in the field of regulation of the financial market (stock, banking, insurance and pension savings); introducing the practice of lending to foreign countries, including members of the CIS and Eastern European countries, in rubles; encouraging the transition of state-owned companies to settlements in rubles for export deliveries.

Effective management of international reserves must ensure both their safety and high profitability. In this case, first of all, it is necessary to minimize investment risks. In 2007, the investment of a significant amount of Bank of Russia reserves in bonds of companies with undiversified businesses - the American mortgage agencies Fannie Mae and Freddie Mac, which were actually nationalized later during the crisis - predetermined the high risk of such investments and created a situation of uncertainty regarding the safety of invested funds.

In September-October 2008, in conditions of instability in the interbank lending market, the Bank of Russia took a number of measures to create new instruments to increase liquidity in the economy. But it would be a big mistake to allow investment and management companies into the central bank's refinancing system. This would lead to uncontrollability of the liquidity formation process and create a risk of over-lending to the financial sector.

Integral version of monetary policy

Monetary policy can be defined as the activities of an authorized government structure to ensure the implementation of the functions of money. This approach allows us to connect the functions of money with monetary policy objects.

The functions of money are not abstract concepts, as is usually assumed, but can have a statistical interpretation. Thus, as a measure of value, money interacts with price dynamics. An excess of the money supply over the commodity supply leads to inflation, and the opposite situation leads to deflation. Accordingly, inflation and deflation are two consequences of the process of mutual coordination of the money and commodity masses.

For the purposes of our analysis, we combine the functions of money as a medium of exchange and a means of payment, since these functions are closely interrelated. The first ensures the sale of goods and services on the market, the second ensures the receipt and repayment of loans. As a result of credit transactions, monetary aggregates are formed that are used to support the purchase and sale of goods and services. By the foreign economic function of money we understand its ability to ensure the conduct of international economic transactions.

The essence of comparing the functions of money and monetary policy objects, in our opinion, is the ability to identify the inconsistency of both the first and the second. In particular, the impact of monetary policy on the stability of money as a measure of value by increasing the interest rate actually means an increase in the price of depreciating funds. However, an increase in interest rates can indeed lead to an increase in household bank deposits and thereby reduce demand pressure in the consumer market. In this regard, an important problem of inflation targeting should be noted: manipulating the short-term interest rate to stabilize money as a measure of value violates the mechanism of accumulation of money and its transformation into capital.

A certain paradox lies in the fact that the dynamics of the value ("price") of money in relation to goods is determined by inflation, and the "price" of money in relation to money capital is the interest rate.

The choice of the exchange rate as an indicator of monetary policy leads to multidirectional values ​​of money (currency) in the domestic and foreign economies. The increase in this imbalance threatens macroeconomic stability.

Violation of correspondence between economic indicators occurs under the influence of certain information. It influences the intensity of processes that form economic variables. Consequently, information processes influence the behavior of business entities. Therefore, the potential difference “standing” behind each of the indicators can become critical and lead to turbulence.

The main monetary indicators corresponding to monetary policy objects are non-linearly related to each other. This means that it is impossible to influence all indicators with a sufficient degree of predictability by influencing only one of them. In the general case, choosing one of the indicators for monetary policy naturally leads to fragmentation of the policy as a whole.

Ensuring the integrity of the monetary policy involves making significant changes to the methodology of its development and implementation. It is advisable to transition from the formation of the monetary policy according to the scheme “goals - quantitative guidelines - channels of the transmission mechanism - methods - tools” to the scheme “object - goal - indicator - channels of the transmission mechanism - tools”. Moreover, indicators directly related to the functions of money should be selected as monetary policy objects. This approach makes it possible to take into account the interrelationships of monetary policy objects when conducting it.

The set of variables that determine a specific monetary indicator partially coincides with the set of variables that influence other indicators. This allows us to isolate the invariant (unchangeable) component of such sets.

In our opinion, it is currently important to overcome the current orientation of monetary policy towards the financial market and ensure its connection with the state of the real sector of the economy. Therefore, as an invariant basis for the variables that determine the four monetary policy objects, we should choose those that influence the dynamics of profitability of companies in the real sector. It is necessary to take into account that its profitability is related to the bank interest rate through the net return on business activity (NPI). This indicator is determined by the difference between profitability in the real sector and interest rates on attracted loans. If business activity is carried out without attracting bank loans, NPV coincides with profitability.

NPV determines the supply of entrepreneurial activity. The ratio of NPV and bank deposit rate connects the real and monetary sectors of the economy. An increase in the difference between profitability and the interest rate increases the use of loans and leads to an increase in the money multiplier. Conversely, a fall in NPV causes a decline in business activity.

The profitability of the real sector and the interest rate on loans are determined by a partially coinciding set of variables. But the first ultimately depends on the technological level of the economy, its ability to produce competitive products, and the second - on the volume of money supply, as well as the institutional foundations of the economic system, in particular its ability to ensure repayment of borrowed funds.

With mathematical formalization, we can denote the DCT function as F(x1, x2, x3, x4, x5), where: x1 - NPV; x2 - interest rate; x3 - money supply; x4 - inflation; x5 - exchange rate. In turn, each of the monetary policy objects is determined by a set of variables from y1 to yn. Moreover, some of these variables are common for each of the monetary policy objects, and some are specific. That's why:

F(x1, x2, x3, x4, x5) = F[x1(y1...up) x2(y*...up) x3(y1...up) x4(y*...up) x5 (u*...oop)]. (1)

This dependence can also be formalized using set theory. Let the BHPD belong to some set As with dimension s, which is a set of the space E: As [belongs to] E. Then As [belongs to] At [belongs to] Ak [belongs to] A, [belongs to] Ap [belongs to] An, (2)

where: As is the set of NPV variables; At - set of interest rate variables; Ak is the set of money supply variables; Al is the set of inflation variables; Ap is the set of exchange rate variables; Ap is the set of monetary policy variables.

When developing and implementing monetary policy, an updated interpretation of the efficiency of markets and the rational behavior of economic entities should be taken into account. In the traditional sense, markets are considered efficient if they take into account all incoming information in prices. In our opinion, this approach ignores the fact that the increasing complexity of information processes constantly creates new risks. Accordingly, financial markets operate under the constant threat of the emergence and implementation of new risks. Therefore, these markets are characterized by a high probability of strong and unforeseen fluctuations in the market situation, and risks cannot be measured by the dispersion of the probability distribution, since there are no statistics on their occurrence. In particular, this kind of risk was created by the securitization of banking assets and collateral transactions with structured financial instruments.

Business entities tend to take into account in their activities only those risks that they have encountered previously. Therefore, they do not behave rationally in relation to new risks. Thus, the risk of a systemic crisis as a result of the widespread use of hedging instruments was not correctly assessed. In this case, the risk is not destroyed, but moves between market participants along the trajectory of a boomerang. Overcoming the global financial crisis requires monetary authorities to implement new methodological approaches to monetary policy and improve its tools, methods and mechanisms. Moreover, it is important to draw clear conclusions from the theoretical and practical mistakes made in the pre-crisis period. We must not allow excessive intertwining of the banking sector and the stock market, widespread use of financial instruments as bank collateral, and also reduce the ability of central banks to control the formation of liquidity.

Taking effective measures to prevent future global financial crises will require active international cooperation on the same scale as the Bretton Woods and Jamaica international conferences. This will allow us to solve a number of problems that until recently have not received due attention. For example, control over the formation of international liquidity as a result of the multiplication of reserve currencies should be ensured. This will most likely necessitate the elimination of offshore banking zones (a number of developed countries, in particular Germany and France, have already made such proposals). Their activities not only weaken control over international liquidity, but are, in fact, unfair competition in the field of taxation. It is also necessary to unify the requirements for the quality of bank collateral and prevent the use of securities issued during the securitization of issued loans to secure new loan obligations.

*The work was carried out with the financial support of the Russian Humanitarian Fund, project N 08-02-91205a/U.

3 www.bis.org/publ/qtrpdf/r_qa0809.pdf.

4 Bernanke V., Gertler M. Should Central Banks Respond to Movements in Asset Prices? // www.princeton.edu/~bernanke/currentpapers.htm.

5 Buiter W. Central Banks and Financial Crises // www.federalreserve.com.

6 Roubini N. Why Central Banks Should Burst Bubbles // www.rgemonitor.com.

7 Biggs B. A hedger came out of the fog... / Transl. from English M. - St. Petersburg, 2007.

8 Goodhart Ch. What Weight Should Be Given to Asset Prices in the Measurement of Inflation // Economic Journal. 2001. Vol. III, June. P. 335.

10 See, in particular: Rozinsky I. International financial centers: global experience and opportunities for Russia // Questions of Economics. 2008. N 9.