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Lecture notes, cheat sheets
Money. Credit. Banks. Banking and monetary systems of the USA, England, Germany, Japan, France, Italy and Canada (lecture notes)
Directory / Lecture notes, cheat sheets Table of contents (expand) Banking and monetary systems of the USA, England, Germany, Japan, France, Italy and Canada monetary system the system of circulation of money in the country, which has developed historically and is enshrined in law, is called. An integral and relatively independent part of the country's monetary system is its monetary system. currency name the money involved in international settlements. The monetary system includes the following main elements: a monetary unit (account unit) used to measure the prices of goods; official price scale; types of banknotes; emission system; the exchange rate of the national currency and the procedure for its exchange for a foreign one. Monetary unit - a banknote established by law, which serves to measure and express the prices of all goods and services. The monetary unit is divided, as a rule, into small multiple parts. Most countries have a decimal division system. Price Scale - the amount of gold fixed in monetary unit. With the cessation of the exchange of credit money for gold, the official price scale lost its economic meaning. Types of banknotes, which are legal tender, are credit and paper money. Credit and paper money differ in issuer and purpose. Emission system - legally established procedure for issuing banknotes. The components are: 1) emission center; 2) emission legislation. The exchange rate of the national currency and the procedure for its exchange for a foreign one. The exchange rate is understood as the price of one currency, expressed in units of another currency. Setting foreign exchange rates is called quotation. Direct quote means that one unit of foreign currency is equal to a certain number of units of the national currency. Indirect quotation means that one unit of the national currency is equal to a certain number of foreign currency units. The interaction of the elements of the monetary system is carried out Central bankwhich for these purposes carries out the following Features: 1) in cooperation with the Government develops and implements a unified state monetary policy aimed at protecting and ensuring the stability of the ruble; 2) monopoly issues cash and organizes its circulation; 3) is a lender of last resort for credit institutions, organizes a refinancing system; 4) establishes the rules for making settlements; 5) establishes the rules for conducting banking operations, accounting and reporting for the banking system; 6) carry out state registration of credit institutions; issues and revokes licenses of credit organizations and organizations involved in their audit; 7) exercise supervision over the activities of credit institutions; 8) register the issue of securities by credit institutions in accordance with federal laws; 9) carries out independently or on behalf of the Government all types of banking operations; 10) carry out currency regulation, including operations for the purchase and sale of foreign currency; determines the procedure for making settlements with foreign states; 11) organize and carry out currency control both directly and through authorized banks in accordance with the law; 12) takes part in the development of the balance of payments forecast and organizes the compilation of the balance of payments; 13) in order to carry out these functions, analyzes and forecasts the state of the economy as a whole and by region, relations; publishes relevant materials and statistical data; 14) in relation to cash circulation - carries out forecasting and organization of production, transportation and storage of banknotes and paper money, creation of their reserve funds; establishes the rules for the storage, transportation and collection of cash for credit institutions, the signs of the solvency of banknotes and the procedure for replacing damaged banknotes and paper money, as well as their destruction; determines the procedure for conducting cash transactions for credit institutions. Types of monetary systems There are systems of circulation of metallic and non-metallic money. In the first case, metal money performs all the functions of money, and credit money (banknotes) is exchanged for gold. In the second case, non-metallic money that cannot be exchanged for gold circulates. Bimetallism is understood as a monetary system in which the role of the universal equivalent is legally assigned to two metals, usually silver and gold. Free minting of coins from these metals is provided, as well as their circulation on an equal footing. Types of bimetallic systems: a system of parallel currencies - the ratio between silver and gold coins was set spontaneously in accordance with the market price of the metal; dual currency system - the ratio between silver and gold coins is set by the state; lame currency system - gold and silver coins are legal tender, but not on an equal footing. Free coinage of gold coins and closed coinage of silver were envisaged. Silver coins acted as signs of gold. Monometallism - a monetary system in which the role of the universal equivalent is legally assigned to one metal (copper, silver, gold). US MONETARY SYSTEM One of the features of the US monetary system is the long existence of bimetallism, which was supported not only by the owners of silver mines, influential in the US, but also by a wide range of borrowers - small and medium-sized industrialists and farmers interested in raising commodity prices in order to reduce the real size of their debt. In 1900, an act on the gold standard was issued, which approved the gold dollar with a pure gold content of 1,50463 g as the country's monetary unit. However, silver dollars were not withdrawn from circulation. A characteristic feature of the US monetary system was the long existence of a decentralized system of banknote issuance. Until the 60s. 1863th century the right to issue banknotes was used by numerous banks of individual states. Another peculiar feature of the system of banknote emission, which existed in the USA from 1914 to XNUMX, is the obligatory backing of issued banknotes with government bonds. In December 1913, a law was passed that created a new system for issuing banks - the Federal Reserve System (FRS). The entire territory of the United States was divided into 12 districts, in each of which a federal reserve bank was established with a capital of at least $4 billion. Federal Reserve Notes were redeemable for gold coins and had to be backed by at least 40% gold and 60% bills for up to three months. The Federal Reserve Act made the following changes to the country's monetary system: he centralized the issue of banknotes; significantly changed the system of backing banknotes, making their commercial bills instead of government securities the main security. During the world economic crisis of 1929-1933. a feature of the US monetary system was the long-term preservation of the gold standard. This is primarily due to the fact that the United States entered the First World War only shortly before its end, and therefore they did not have to bear large military expenses and resort to inflationary issuance of paper money to cover them. In addition, after the war, the country's gold reserves increased significantly, which contributed to the preservation of the former system of free exchange of banknotes for gold coins. However, in the US, the gold standard collapsed under the blows of the crisis of 1929-1933. The elimination of the gold standard was accompanied by a 41% devaluation of the dollar in accordance with the gold reserve act of January 31, 1934. According to the same "gold reserve act", centralized gold reserves were nationalized: the entire gold reserve of the federal reserve banks was transferred to the treasury in exchange for its gold certificates. The Silver Act of 1934 required the Treasury to purchase silver and issue silver certificates in return, which became one of the constituent elements of the money supply. After the Second World War, the industrial consumption of silver increased and its role in money circulation significantly decreased. For 1955-1972 the amount of silver dollars decreased from 2,4 billion to 0,7 billion dollars. The peculiarity of military inflation in the United States was that it took place in conditions of a noticeable increase in industrial production, which, to a certain extent, restrained inflation. However, the growth of the money supply significantly exceeded the growth of production. So for 1940-1945. the amount of cash in circulation increased 3,7 times, while GNP increased only 1,5 times. A feature of post-war inflation in the United States compared to a number of other capitalist countries was that the depreciation of the dollar in relation to goods for a long time was not accompanied by a decrease in its official gold content, which until the end of 1971. remained at the level established in 1934. However, the development of the currency crisis increasingly undermined the dollar. The highest rate of inflation in the United States was observed in the period from the late 60s to the end of the 80s. until the beginning of the 1973s. This was due to a number of economic and military-political reasons. These, first of all, include the aggravation of the global monetary and financial crisis, the desire to get rid of the dollar, a large balance of payments liability, huge military spending associated with both the Vietnam War and the new program of military modernization, and the energy and raw materials crisis of 1975- 80, as well as price increases by a number of corporations. By the beginning of the XNUMXs. inflation has become a major economic problem. The active anti-inflationary measures taken by the Reagan administration in 1981 helped reduce its level. They were based on the monetarist concept of economic regulation. Currently, the United States has a structure of money circulation, which is determined by the three main issuers of money. These are the Ministry of Finance (Treasury), the Central Bank (FRS), commercial banks. The US Department of the Treasury issues small denomination (treasury money) tickets from 1 to 10 dollars, silver coins and change, the so-called defective coins made of ordinary metals (nickel, copper). Until recently, the issue of treasury money was 11% of the cash supply. Most of it is in coins. The Federal Reserve System, represented by the Federal Reserve Banks, issues banknotes, which are the main means of cash circulation in the country. Commercial banks issue mainly bills, checks, credit cards, electronic money, which together form the so-called non-cash money. They accounted for 1980% of the money supply in 70 and are represented by current accounts and various deposits. At the same time, 90% of all US payments are made by non-cash payments. At the same time, it should be noted that the higher the level of non-cash payments and the share of non-cash money in the money supply, the lower the likelihood of inflationary outbreaks. An important basis for non-cash payments in the United States are demand deposits as a secondary element of the money supply. The funds that are concentrated in these accounts belong mainly to large corporations and wealthy segments of the population. The main instrument of non-cash circulation of money is a check. Other forms of non-cash payments are automated payment methods and the use of computers through credit cards, as well as a system of pre-notified payments (the bank automatically credits the client’s current account or, conversely, debits from his account amounts under a pre-concluded agreement, without requiring client approval in each specific case ). Such write-offs are made for utility costs, rent, insurance premiums, and mortgage payments. Income includes wages, pensions, and rent payments. The main function of regulating the monetary system is performed by the US Central Bank together with the Treasury Department. Since the end of the 70s. The main concern of the Federal Reserve System was to maintain low inflation, stability of money circulation in the country, strengthening the position of the dollar as a reserve currency. Since 1972, the central bank has determined, almost monthly, the allowable limits for changes in the value of the money supply and bank reserves. Since 1975, the Fed, at the request of the US Congress, has been obliged to determine annually the permissible limits for the growth of monetary aggregates and a number of interest rates. Since 1981, more stringent regulation of money circulation has been carried out by limiting the money supply and increasing interest rates. Subsequently, this helped to reduce inflation and strengthen the prestige of the dollar by increasing its exchange rate against the currencies of other Western countries. All these US measures caused some financial and economic damage to the countries of Western Europe and Japan due to the flight of hot money from there and the fall in their exchange rates. MONETARY SYSTEM OF FRANCE in France for much of the XNUMXth century. there was bimetallism. In 1865, France led the Latin Monetary Union, and in 1873 abolished the free coinage of silver, keeping it only for gold. This meant a transition to gold monometallism. However, the previously minted five-franc silver coins retained the unlimited power of legal tender. Therefore, the French monetary system was a "limping type" of gold monometallism. On August 5, 1914, a law was passed that abolished the exchange of banknotes of the Bank of France for gold and gave it the right to issue banknotes with a forced exchange rate. During the war, gold coins went out of circulation, and the latter was filled with fiat banknotes, degenerated into paper money. The issue of these banknotes was used to finance the military spending of the state. Inflation, which began during the First World War, continued in France longer than in other capitalist countries, until 1926. This is due to the fact that France had a large budget deficit due to large expenditures on the restoration of areas destroyed during the war years, which it largely covered by the inflationary issue of paper money. The turn from inflation to stabilization of the franc did not begin until 1926. The state budget was balanced with additional taxes. In 1928, a monetary reform was carried out. The result of the reform was the introduction of a gold bullion standard, and the convertibility of banknotes into gold was curtailed: banknotes were subject to exchange for gold bullion only if they were presented for exchange in the amount of at least 215 thousand francs, which was equal to 12,5 kg of gold. Unlike other Western countries, France during the crisis of 1929-1933. retained the gold bullion standard. This was due to the fact that the crisis gripped it later than other countries. In the mid 30s. France's economic and financial situation worsened. In October 1936, the government devalued the franc, reducing its gold content by more than 25%. At the same time, the exchange of banknotes for gold was stopped. In 1937 and 1938 two more devaluations of the franc were carried out, which meant the collapse of the gold bullion standard and the progressive depreciation of the franc. A feature of military inflation in France, compared with the United States and England, is that it was aggravated by the robbery of France by Nazi Germany. The latter levied a huge occupation tribute from France, which was the main reason for the huge budget deficits, which were covered by the inflationary issuance of paper money. Inflation in France during the Second World War was aggravated by a sharp decline in production and trade as a result of the economic devastation caused by the fascist occupation. Post-war inflation in France is closely linked to a chronic budget deficit, which is caused by large military spending, as well as spending related to government regulation of the economy and the implementation of "growth policies." After World War II, the franc was repeatedly devalued; the last two devaluations took place in December 1958 and August 1969. Frank became so "weightless" that the government saw fit to "weight" him with a denomination. The denomination was carried out at the beginning of 1960 and resulted in the enlargement of the franc by a hundred times. A new franc was equal to a hundred old. The devaluation of 1958 played a certain role in strengthening the export of French goods to the world market. However, the internal process of inflation continued, which found expression in a systematic increase in commodity prices. For a long time, France was at the head of the franc zone. This currency group was formed even before the French colonies gained independence. Within the franc zone, the French franc played the role of the hegemonic currency, and all other countries had to keep their reserves in French francs and store them in Paris, and their exchange rates against the French were fixed at a certain level, which could not be changed without French consent. France benefited enormously from the franc zone. She disposed of the foreign exchange reserves of the countries of the zone, which were withdrawn from there and placed in France. In the post-war period, the former colonies of France, having achieved state independence, began to create their own issuing banks and their own monetary systems. After the war, centrifugal tendencies develop within the franc zone, weakening France's monetary hegemony. When the French franc was devalued in December 1958, Morocco and Tunisia refused to devalue their currencies. In 1959, these states introduced currency control over operations with the franc zone and, although they continued to keep their foreign exchange reserves in France, they began to make transactions with foreign currency already through their own issuing banks, bypassing the Parisian foreign exchange market. However, other members of the franc area have devalued their currencies to the same extent as France. The latter still continues to use the franc zone to its advantage. France's monetary hegemony within this zone continues for a number of developing countries, although the franc zone lost its significance in the early 70s. The structure of monetary circulation in France is divided into two main concepts: money supply and liquidity in the economy. The money supply - aggregate M1 - includes cash, i.e. banknotes and small change, and money written into accounts, which are issued on the basis of demand deposits in banks, postal money transfer agencies, and the treasury. Aggregate M2 consists of aggregate M1 and money created by banks and other financial institutions on the basis of term deposits and special accounts. All this is called the likeness of money or quasi-money. In turn, aggregate M3 includes aggregate M2 and deposits in savings banks, treasury bills, which, as a rule, are placed among the population. Since the 60s. there is a tendency to increase non-cash turnover. The main types of cash circulation are banknotes and change coins (minted from nickel, silver and aluminum; they are the object of private hoarding), while non-cash circulation is represented by checks, accounts for various types of deposits and credit cards. There are four sources of money issuance in France: first, the central bank (Bank of France); secondly, banks and some financial institutions that create quasi-money; thirdly, the Ministry of Finance, which, by lending to farms, issues money; fourthly, the Deposit and safe cash desk, carrying out indirect emission of money. Features of the monetary circulation of France as a member of the European Union. As a member of the European Union, France for a long time had to take care of the hardness of its currency - the franc. France experienced the greatest difficulties with its currency in the late 60s and early 70s, when the world monetary and financial crisis worsened. For France, this was reflected in a slowdown in growth, a deficit in the balance of payments, a flight of short-term capital, a reduction in gold and foreign exchange reserves, and a depreciation of the franc. In August 1969, France was forced to devalue the franc. From August 1971 to January 1974, a dual currency market was created. In 1973-1975. France was forced to actively use foreign exchange reserves to maintain a fixed exchange rate for the currencies of Germany, Belgium, Holland and Denmark. Losses in foreign exchange reserves amounted to several billion dollars. The adoption of new economic programs in the late 70s. ("Barr's plans") to stabilize the economy and the monetary and financial situation of France, the weakening of the currency crisis through the adoption of the Jamaican agreement has strengthened the position of the franc against the dollar and other currencies. UK MONETARY SYSTEM The monetary unit of Great Britain is the pound sterling. It was used long before the emergence of a centralized state as early as the 240th-20th centuries. The name "pound sterling" reflected its original weight content: 12 pence was minted from one pound of silver, which also had a second name - "sterling". XNUMX pence was a shilling, one pound was XNUMX shillings. In the XIV century. in England, gold pounds sterling appear in circulation until the end of the XNUMXth century. operates a bimetallic monetary system. At the end of the 1798th - beginning of the 1821th century. England becomes the first country of gold monometallism. Under the law of XNUMX, the minting of silver was prohibited. However, since during this period England was at war with France, the exchange of banknotes for gold (characteristic of gold monometallism) was discontinued, and until XNUMX banknotes that were not exchangeable for gold were in circulation. From 1821 to 1914 England had a gold standard system. Since 1914, banknotes were no longer exchanged for gold, and gold coins were withdrawn from circulation. To cover military spending, the government began to issue treasury notes. In 1925, the exchange of banknotes for gold was restored, but in a truncated form: for bullion, not gold coins. Despite a significant decrease in the purchasing power of the pound sterling, England did not go for its devaluation and carried out the restoration of the currency, restoring the pre-war gold content of the monetary unit. The gold bullion standard did not last long. Already in 1931, during the world economic crisis, England was forced to abandon the exchange of banknotes for gold. Since that time, a system of fiat credit money has been operating in England. After the crisis of 1929-1931. there is a weakening of the position of Great Britain in foreign markets, the gradual loss of the leading positions by the British currency and its transformation into a secondary reserve currency. Its share in the world's official foreign exchange reserves has declined from 20 to 7% over the past 3 years. The post-World War II period in the UK tends to be characterized by higher rates of inflation than other industrialized countries (with the exception of Italy). In 1951-1960. retail prices grew by an average of 4% per year, in 1-1961. - by 1970%, 4-1971 - by 1980%, 13,3-1981 - by 1986%. The purchasing power of the pound sterling in 1986 decreased by 1938 times compared with pre-war 16 and by 1950 times compared with 12. The causes of inflation in Great Britain, as in other countries, are rooted in the sphere of production and in the sphere of circulation. One of the main ones was the budget deficit, which was accompanied by an increase in public debt. To combat inflation, the Bank of England used a variety of tools. Three methods of monetary policy were used: interest rate maneuvering by the Bank of England; change in the norms of "special deposits", i.e. deposition by commercial banks of a share of funds attracted on deposits on a special account with the Bank of England; the use of direct selective methods of control over bank loans issued to the private sector. Since 1976, there has been an increase in the influence of neoclassical and especially monetarist concepts on monetary policy. It manifested itself, firstly, in the abandonment of the short-term "stop-forward" policy (which provides for a change in the direction of economic policy depending on fluctuations in the market situation) and the transition to the implementation of a medium-term strategy aimed at ensuring a steady reduction in the growth rate of the money supply and the ratio of government loans to GDP. Secondly, the Bank of England abandoned direct methods of controlling bank loans and changes in its interest rate and began to more actively use the market method - the purchase and sale of securities. The relatively high rate of inflation in the UK in the post-war period led to the depreciation of the pound sterling against the US dollar and the German mark. The main type of money in the UK, as in other countries, is money in a non-cash form, i.e. funds in bank accounts - deposit money. Cash - banknotes and small change - make up about 32% of the total money supply in circulation. The predominant development of non-cash payments and the strengthening of the relationship between money circulation and the movement of loan capital have led in all countries to a significant expansion of the boundaries of the money supply due to new types of credit obligations. In the post-war period, in the payment turnover of Great Britain, cash balances are used not only on demand accounts, but also on urgent and savings accounts. This is due, in part, to the fact that funds from term accounts can be obtained almost as easily as from demand accounts without prior notice. In addition to the Treasury, which issues coins, the issuers of money in the UK are the Bank of England and commercial banks. The Bank of England monopoly issues banknotes in an amount determined by the Treasury and approved by Parliament. Since 1844, the Bank of England has been divided into two departments: the Issuing Department, which deals only with the issuance of banknotes, and the Banking Department, which carries out all other operations. At the present stage, the entire issue of banknotes is fiduciary. As security for the issuance of banknotes, the Issuing Department purchases government bonds and treasury bills, and also purchases bills and other obligations from banks. At this stage, the issued banknotes are held by the Bank of England as a reserve of its Banking Department. The government then uses the funds from its account at the Bank of England. Thus, the balances on the accounts of banks in the Bank of England and the deposits of the clients of these banks are increasing. The number of banknotes in circulation does not change yet: the issued banknotes remain in the Bank of England. But the money supply in circulation still increases as a result of the growth of deposits in commercial banks. Obligations of foreign central banks can also serve as security for the issue of banknotes. those. foreign currency. In this case, the foreign currency purchased by the Banking Department is transferred to the Issuing Department in exchange for the corresponding number of banknotes issued by the latter. Non-cash payments in the UK account for only 8% of the total number of payment transactions, reaching 90% of their value. The largest share of the cost of all non-cash payments - 51,4% - falls on credit and debit transfer payments, and mostly automated. Checks rank second in value - 47,8% and first in quantity. In recent years, the UK has seen: 1) reducing the share of checks both in quantity and value; 2) increasing the share of payments by automated transfer, cards and electronic payments; 3) an increase in the average check amount, the use of checks mainly for payment of large amounts. MONETARY SYSTEM OF GERMANY Until the 70s. 20th century Germany did not have a unified monetary system; more than XNUMX states and principalities had different types of monetary systems. They were based primarily on silver monometallism, only in Bremen there was a gold thaler. The remaining monetary units (friedrichsdores, louis, pistoles and ducats) were based on the parallel and double systems of bimetallism, i.e. gold and silver coins were in circulation, and the price between gold and silver was set by the market or the state. In addition, banknotes and paper money were also in circulation. Political unification of the German lands and education in 1871-1873. The German Empire led to the creation of a unified monetary system based on gold monometallism: a new monetary unit was introduced - the Reichsmark. With the outbreak of World War I, the gold standard was abolished and the exchange of Reichsbank banknotes for gold was discontinued. In 1924, a gold exchange standard was introduced, which meant the establishment of Germany's currency dependence on the victorious countries: the new Reichsmark was backed by 405 gold and foreign currency. During the world monetary crisis of 1929-1933. the gold exchange standard in Germany was abolished and a system of fiat money was established. After the Second World War, chaos reigned in the German economy, the territory, like Berlin, was divided into four occupation zones. On June 21, 1948, the Western occupation authorities carried out a separate monetary reform, which divided Germany economically into two parts. In accordance with the reform, a new monetary unit was introduced - the German mark. In May 1949, after the adoption of the Constitution of the Federal Republic of Germany, in accordance with the requirements of the Breton Woods system, the gold-dollar standard was established in the country, the exchange rate of the German mark against the dollar was 3,33 marks per US dollar. In 1976, a system of credit money not exchanged for gold was established in the country. The current currency in Germany is the Deutsche Mark, which is subdivided into 100 pfennigs. MONETARY SYSTEM OF JAPAN The Emission Institute - the Bank of Japan was established in 1882. Under the law of 1889, he received the right to issue fiduciary banknotes. The gold standard in Japan was introduced in 1897. The gold content was set at 0g of pure gold. During the First World War, the exchange of banknotes for gold was discontinued. The gold standard was officially abolished at the end of 75. The monetary unit of Japan - the yen contains 100 sen, and one sen contains ten rin. However, due to inflation, money in denominations of less than one yen was abolished in 1953 - hay and rin were withdrawn from circulation. The Bank of Japan issues a large number of commemorative coins made of copper-nickel alloys, as well as precious metals. In circulation are coins made of copper-nickel alloys in denominations of 100, 50, 10, 5 and 1 yen. After the Second World War, there were changes in the monetary system and the structure of monetary circulation in Japan. The adopted emission legislation provided for formal restrictions on the issue of banknotes. However, if budget funding was needed, the government could revise emission limits. In addition, there were practically no limits on the issue of banknotes secured by commercial bills or securities, as well as when buying foreign currency. The structure of money circulation in the post-war period has changed markedly. During the Second World War, when the problem of inflation was acute, the share of cash in the structure of money circulation increased from 30 to 56%, while deposits decreased accordingly. In the process of economic recovery in the 50-60s. the share of deposit money exceeded the pre-war figures. The high share of deposit money is associated with the structure of domestic trade: by the beginning of the 90s. wholesale trade, which is overwhelmingly served by non-cash payments, accounted for 81%, and retail - 19% of the trade turnover. Although deposit money dominates in the structure of monetary circulation, the Bank of Japan has a certain impact on the dynamics of monetary circulation through the issue of cash. Various measures of credit regulation are used for the same purposes. In the first post-war years, inflation in Japan assumed enormous proportions: the amount of money in circulation increased 15 times, and wholesale prices - 343 times. The purchasing power of the yen has fallen by 99%. Since the 50s, when the economic recovery was completed, inflation has slowed down. Overcoming the expansion of inflationary processes in the conditions of the country's high fuel and energy dependence on external sources was facilitated by a decrease in prices for oil and basic types of raw materials in the 80s. The financial and administrative reform was also of significant importance, accompanied by a decrease in the issuance of state loans as a means of budget financing. At the same time, retail and consumer prices increased, primarily due to higher prices for food and various services, as well as an increase in indirect taxes. The inflationary depreciation of the yen in the post-war period was one of the main factors in the fall of its exchange rate. The exchange rate of the yen was periodically reviewed and brought into relative conformity with its real parity. At the same time, Japan practiced a plurality of exchange rates (differentiated exchange rates of currencies for various types of transactions, commodity groups and regions). In April 1949, a single exchange rate was established: 360 yen = 1 US dollar. It survived until 1971. In connection with the dollar crisis, the Japanese government introduced in August 1971 a "floating" yen exchange rate. At the end of 1971, the yen was revalued for the first time in the post-war period, and in February 1973 a second revaluation was carried out. The appreciation of the yen was facilitated by: ▪ Continued structural restructuring of the Japanese economy on a modern technological basis; ▪ Increased competitiveness of Japanese export goods; ▪ A noticeable increase in the purchasing power of the yen in conditions of relative stabilization of money circulation and prices. In addition, the growth of the yen was associated with the US policy aimed at maintaining an artificially low dollar exchange rate, since the US administration thus sought to expand American exports, hinder Japanese imports and, on this basis, try to reduce the deficit in foreign trade with Japan and in general in US balance of payments. As Japan became the second largest economy in the world after the United States, the yen became one of the reserve currencies. Currently, it is used as an international reserve and means of payment mainly in the Asian region. Japan is strenuously boosting its foreign economic expansion. In this regard, protectionist barriers were introduced in the United States in relation to a number of Japanese exports, primarily cars. The decline in the Japanese economy at the beginning of 1997 and the impact of the crisis in Asia on the situation in Japan caused a fall in the yen/dollar ratio (in mid-1998 - 138,78 yen per 1 US dollar). Another external factor that plays against the Japanese yen is the attractive state of the US market in terms of relatively quick income generation against the backdrop of the stagnant Japanese economy. The result is the flight of Japanese capital to the United States. Further depreciation of the yen threatens to increase the US trade deficit with Japan. This development of events also worries the Asian states, whose economy is closely connected with the Japanese, namely: Thailand, the Republic of Korea, Hong Kong, since the nat. the currencies of these countries risk coming under increasing pressure as the yen depreciates. MONETARY SYSTEM OF CANADA The monetary system of Canada was formed in a historically short period of time. It was formed in 1867. Before the formation of Canada as a state, there was a colonial type of money circulation on its territory. In circulation, French, Spanish, Portuguese silver coins were used as money, among which there were quite a few defective banknotes. In addition, paper surrogates were also in circulation. Coins came from the metropolitan countries to pay salaries to the military and the local colonial administration in limited quantities. In France, since 1670, a silver coin - salt - was minted especially for Canada, but its share in domestic circulation was small, part of the trade operations were carried out through direct barter. The exchange of goods in the domestic market existed for several reasons, including the underdevelopment of roads, the narrowness and isolation of local markets, etc. The Indians of Canada used special belts made of shells - "wampums" as money. Some trading firms used their own monetary surrogates "bons" as money in order to sell goods to the Indians only in their shops. Paper money surrogates existed in Canada until the end of the colonial rule of France, their complete depreciation occurred at the end of the XNUMXth century. In 1825, after the transition of Great Britain to gold monometallism, the pound sterling became the official currency in Canada. The Money Circulation Act of 1841 recognized American gold and silver dollars and French silver coins as legal means of payment along with British pounds sterling. Since 1870, the Canadian dollar has become the national currency in Canada. The first silver dollars minted in Great Britain appeared in Canada in 1858. Since 1908, coins began to be minted in Canada, mainly from silver, gold coins were minted from 1908 to 1919. Before the Second World War, the banknotes of commercial banks were in the national currency, and the share of federal government banknotes was small. The centralization of the issue of banknotes was facilitated by the creation of the Bank of Canada in 1935 and its nationalization in 1938. According to the law, within 10 years, commercial banks had to reduce the issue of banknotes by four times. Since that time, banknote emission has become a privilege of the Bank of Canada. The issue of gold and silver dollars was practiced exclusively for tourists, and since 1968 the state began to replace silver coins with nickel ones. Within the country between firms and organizations, the non-cash form of payment prevails, the main instrument of which is a check. Checks serve up to 90% of cash settlements. Cash is gradually being squeezed out of the sphere of retail circulation and credit cards. But when making small transactions, cash is convenient and preferable. Settlements by checks developed at a faster pace than the mass of cash in circulation increased. The mobility of checks is very high, each check is involved in 14 settlement transactions, which leads to an increase in the costs associated with its maintenance. Commercial banks, introducing new forms of payment, are trying to reduce the costs of check circulation. Credit cards are considered a promising direction for the development of non-cash payments. The pre-notified payment system is gaining popularity in Canada. One of the main causes of inflation in Canada between the two world wars was the uneven change in the prices of goods. In the post-war period, Canada experienced two outbreaks of inflation, the causes of which were: the war in Korea; commodity and "investment" booms, accompanied by an influx of American capital and its placement in the country's extractive industries; increase in exports to the United States of raw materials and semi-finished products. The rise in prices was sharply affected by military spending. Inflationary processes were also influenced by the increase in production costs and the slow growth of labor productivity in agriculture and in the extractive industries. Government of Canada between 1969 and 1975 tried to impose restrictions on the growth of prices and wages. But these measures turned out to be ineffective, since the government could not stop the monopolies, which, under various pretexts, increased prices and tightly controlled wages. In 1994-1996 inflation in Canada has dropped to extremely low levels. A large underutilization of production capacities and high unemployment made it possible to reduce the cost of credit without the risk of accelerating inflation. For most of 1994, however, the Bank of Canada raised interest rates. The periodic increase in interest rates was due to the need to strengthen the position of the national currency, weakened by large deficits at the federal level and in the largest provinces, as well as the threat of Quebec separatism. In 1995, Canada's economy was teetering on the brink of a recession, which would have been inevitable in the event of a significant drop in external (mainly from the United States) demand for Canadian goods. Under these conditions, the Bank of Canada began to implement a series of successive cuts in interest rates. Inflation in Canada fell from 5,2% in 1990 to 1,8% in 1993 and to 0,2% in 1994, the lowest level in the entire post-war period. Since 1991, prices in Canada have risen noticeably more slowly than in the US, and their growth has lagged behind the average for the group of "seven countries". This is one of the most important domestic conditions for the continuation of loose monetary policy. Despite the fact that the Canadian dollar is used mainly in domestic settlements, "pegging" to reserve currencies has made it one of the vulnerable links in the global monetary system, since as the pound sterling weakened and the US and Canadian economies intertwined, the Canadian dollar began to focus on the US dollar . Until 1970, the Canadian dollar was heavily pegged to the US dollar. In May 1970, the Government of Canada announced that the Bank of Canada would no longer intervene in the foreign exchange market to maintain a fixed parity between the Canadian dollar and the US dollar, or any other pre-announced exchange rate. Since then, the Canadian dollar has had a "floating" exchange rate. The task of the Bank of Canada in the monetary sphere is to conduct operations to smooth out excessively sharp fluctuations in the exchange rate of the Canadian dollar and neutralize unreasonable pressure on it. In the early 70s. there was a weakening of the positions of the US dollar, which led to a temporary strengthening of the Canadian dollar. The exchange of duties in mutual trade (agreement of January 10, 1965) in vehicles and spare parts changed the structure of Canadian exports and imports. Improved trade and balance of payments. World economic crisis 1974-1975 caused a currency crisis in Canada. There have been significant changes in the import of foreign long-term capital. On the one hand, there was an outflow of foreign direct investment, and on the other hand, large Canadian companies began to invest heavily abroad. The scope of the Canadian dollar has expanded. In general, the Canadian dollar, as the currency of international payments, is used to a limited extent. This is due to the specifics of foreign economic relations between Canada and the United States. About 2/3 of foreign trade turnover falls on the United States, and the US dollar is used in calculations. Pound sterling is used for settlements under long-term contracts with Western European countries and Japan. The high degree of openness of the Canadian economy and its strong ties with the US economy make the Canadian government closely monitor developments in global currency markets. Since the 80s. The most important goal of Canada's monetary policy was to stabilize the exchange rate of the Canadian dollar against the US dollar. MONETARY SYSTEM OF ITALY The monetary system of Italy has undergone many changes over its centuries-old existence. It was characterized by both periods of monometallism and a period of bimetallism. In 1895, the gold coin standard was introduced. During the First World War and until 1923, Italy abandoned the free exchange of banknotes for gold. The gold standard was restored in the form of a gold bullion standard only in 1928. After the Second World War, Italy stopped fixing the gold content of the lira in the IMF, as high inflation required a depreciation of its exchange rate against the dollar (625 lira per one US dollar). Currently 1628 lire per dollar. The monetary unit of Italy is the lira, which is subdivided into 100 centesimos. In reality, due to the high depreciation of the lira, such an exchange does not take place. Italy is characterized by banknotes (credit money), but also paper money issued by the Treasury. These include small money (less than 1000 lire in denomination). The issuing center is the Bank of Italy, which was granted such a right only in 1926. Prior to that, there were five issuing institutions. Since 1893 there have been three of them - the Bank of Italy in Rome, the Bank of Naples, the Bank of Sicily. The issue of money is carried out under the supervision of the Treasury. As security for a new issue, either foreign currency, or treasury bills and long-term government obligations of new issues, or commercial bills and government securities held in commercial banks can act. The decision to issue paper (treasury) money is made by the General Department of the Treasury. Coins are made at the mint. Treasury notes are printed by the State Polygraphic Institute. Payments in Italy are made in cash and non-cash forms. As non-cash payments, giro settlements are widespread - the transfer of funds using special giro orders. In general, cash circulation is widespread in Italy. The majority of purchases are made in cash. Italy has always been an active participant in the global foreign exchange market. In the conditions of the modern monetary system, Italy adheres to the regime of independent free "floating" of the currency in relation to other currencies. Despite this, in Italy since 1961 there have been restrictions on the import and export of the national currency. Currency control is carried out by the Italian Bureau of Foreign Exchange. The integration processes taking place in Europe have also affected Italy. March 13, 1979 Italy entered the single monetary system. The lira exchange rate was set at 1148,15 lire per ECU. In the future, the lira began to fluctuate. The crisis of the early 90s. for Italy was a difficult test. At the end of 1992, Italy had to withdraw from the EMU. On November 29, 1996, Italy rejoined the EMU in the ERM-1 mechanism. On January 1, 1999, a new single currency, the euro, was introduced, initially in non-cash form, since 2002 in cash. To introduce the "euro" into circulation, a country must meet certain criteria. In 1996, Italy met only one of the five criteria. Italy adheres to the concept of approximate fulfillment of requirements. An emergency budget was formed for 1997, oriented towards the criteria for joining the euro. For the correctness of non-cash payments in the "euro", Italy, along with other countries, creates a single system of settlements TARGET using a special connection. To introduce cash payments in the "euro" in Italy, information campaigns were carried out to familiarize citizens with the new monetary unit, and information was exchanged between the countries. In general, despite neither the enormous costs associated with the introduction of a new currency, nor deviations from the necessary criteria, Italy introduces the "euro" from January 1, 1999, among the first 15 countries. Author: Shevchuk D.A. << Back: Credit and financial institutions of the country >> Forward: Legislation regulating banking activities
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