Without cash flow, a normal course of life is impossible. There was money at all times. Cash is put into circulation when commercial institutions issue funds to their customers from special operating cash desks. So what is emission? This is the process of putting money into circulation, as a result of which the money supply grows significantly . Emissions are made in order to satisfy the additional needs of market entities in the means for carrying out circulating operations.
Is emissions a market regulator ?
There are various forms of issuing money. Lending is one of them. Banks are entitled to issue loans only within the framework of available funds and resources, which are represented by a combination of own, borrowed, and also raised funds. With price increases, there is an additional need for money. And here there is a need for emissions. What is emissions in a team economy? This is a release into circulation of funds (according to credit plans). An increase in the money shaft is possible only if it fills the real sectors of the economy. If we take Russia, then the main reason for the significant increase in the volume of money supply over the past few years is the acute deficit of the state budget .
In 1992-1994, it was repaid due to the release of money with a parallel reduction in trade due to a drop in production rates. Since we are talking about emissions, it is worth mentioning the term, which is often found in the framework of this topic. We have in mind the prospectus for the issue of shares. This document discloses information to investors regarding the proposed issue of securities. In the prospectus, as a rule, there is information about the current issue. It contains information about each tranche, the principles of calculating interest payments, credit rating and other useful information.
Types of Issue
There are two types of issue: cash and non-cash money. Consider what is cash emission? First of all, it must be said that it is carried out by the Central Bank. The emission mechanism, in fact, is based on the operations of this financial institution with other commercial financial institutions. In addition to lending, other actions of the Central Bank play a significant role in issuing funds. In countries with advanced market economies (USA, UK, Germany), such operations include the acquisition of government securities, promissory notes of leading companies. For the Russian Federation and other countries with an economy under development, the purchase of freely convertible currencies from exporting organizations and financial commercial structures plays an important role.
It is necessary to separate the concepts of “cash issue” and “issue”. In the case of an issue, it is not always possible to observe an increase in the money supply in the total turnover, since there are reverse processes (that is, withdrawal of funds: repayment of loans, depositing funds into deposit accounts, liquidation of dilapidated banknotes)). In this case, only a change in the structure of the total money supply is carried out. And in the case of the implementation of the second concept, the opposite is observed. After all, in fact, what is emission? This is a direct increase in the money shaft.