Banking. Theories of credit (lecture notes)

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Banking. Theories of credit (lecture notes)

Lecture notes, cheat sheets

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Theories of credit

A loan is a bank operation to provide a borrower with funds on a loan on terms of urgency, repayment and payment of interest.

There are two theories of credit: naturalistic and capital-creating.

naturalistic theory of credit. Representatives of the naturalistic school gave a distorted interpretation of the essence of credit and its role in the capitalist economy. The fallacy of their views lay in the fact that they did not understand the circulation of industrial capital in monetary form, and consequently the independent role of loan capital and its specifics. As a result, they interpreted credit as a way of redistributing material values in kind, while in reality credit is a movement of loan capital. Identifying loan and real capital, naturalists did not understand not only the role of credit and its creator - banks, but also its dual nature, by virtue of which credit can contribute both to the expansion of capitalist reproduction and to the aggravation of its contradiction. Positive aspects - naturalists correctly believed that credit does not create real capital, which is formed in the production process. They showed the dependence of credit on production, without exaggerating its role, emphasizing the dependence of interest on fluctuations and profit dynamics.

Capital-creative theory of credit. The main postulate is that credit occupies a position independent of the reproduction process, and it plays a decisive role in the development of the economy. The theory was constantly improved, new concepts were introduced into it. Keynes played an active role in the development of the theory, who substantiated the principles of credit regulation of the economy, according to which credit determines economic development. Theoretical concepts of Keynes, adopted by the ruling circles as methods of regulation, contributed to the withdrawal of the capital economy. countries from the crisis in 29-33 years. and eased the depth of recessions in the post-war years. In the postwar years, the theory was developed as followers by two groups of economists - the Neokensian school of monetary regulation and the group of R. Goldsmith, p. Kuznets, H.Dugel, D.Krimer. Each of these groups contributed to the development of the theory... For example, the second group, studying the loan capital market, traced a certain dependence of the development of the economy on the accumulation of money capital, the dynamics of the capital market and credit. They show that corporations, the state, and the population cannot develop on the basis of their own financial resources and require constant injections of funds from the capital market. The merit of these scientists lies in the fact that they created a clear structure and parameters for the functioning of the capital market and the credit system. The capital-creating theory is further developed in the theory of monetarism, the essence of which lies in the fact that the implementation of the containment of the money supply and the increase in interest rates. This theory was also called "anti-inflationary" because its recommendations were used in the economic policy of the US and Western ruling circles. Europe from the 80s to our time. Although these measures helped to reduce the rise in prices in the 80-90s, they did not eliminate inflation and its root causes in Western countries.

Author: Shevchuk D.A.

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