In the 21st century, virtual currency is widely used: bank cards and web wallets have taken over the world. But a person still continues to use physical banknotes and coins on a par with it. Why? In this article, we will explain what a banknote is and why such an old method of paying for goods and services will always be relevant.
What is a banknote?
A banknote is a solvent banknote made of paper or its analogues, which allows you to perform exchange transactions.
Since ancient times, mankind has used its labor to obtain benefits, but soon a problem arose - the assessment of that very labor. When a person began to build cities, socialize and do something other than the extraction of primary resources, a huge variety of crafts appeared that led to such an interesting phenomenon in society as barter: you - to me, I - to you. Someone knew how to build, someone was a born farmer, and someone became an excellent diplomat and ambassador. And it soon turned out that there were so many types of activities that it was not possible to fairly evaluate each of them. So the first state banknotes appeared - coins and banknotes.
In fact, a banknote is an analogue of an agreement on the acquisition of something, simply having a certain value set by the state in which it was issued. Its value depends on many factors, such as resource prices, the number of banknotes in circulation and the state of the state economy.
With the advent of banknotes, a huge number of problems were immediately solved - labor became more valued, and goods and services achieved by labor could easily be acquired by other people within the same society and state.
History of banknotes
The first mention of banknotes dates back to the 6th and 7th centuries AD. e. Eastern countries were preparing to introduce some "tablets" that would allow their owners to acquire everything that was previously inaccessible to them. However, the first evidence of the appearance of a paper banknote was noted in the 8th century AD. e. in China. Since this is actually the first state that began to produce and use paper, all the facts indicate that the history of banknotes began from here.
A banknote is a kind of beginning of a new civilization, because earlier the only banknotes were coins made of precious metals. By itself, a coin of gold or silver had an approximate value if sold as a jewel. And a banknote is just a piece of paper that announced its value, but in fact it was not. Imagine how difficult it was to introduce such an unusual type of currency into circulation. Most likely, at first, few people believed in the real value of such banknotes.
Development of banknotes
But already after the emergence of several formed large states and a fairly long-term use of banknotes as banknotes, each empire and country began issuing its own banknotes and bonds. This has led to several kinds of problems.
- Determining the value of one banknote relative to another. This problem is still the most acute, but at the same time it forms the economy of each state separately.
- New banknotes of the state could not immediately enter into circulation until all the old money was withdrawn from it. It was only under the influence of several major monetary reforms that the first documented change of banknotes was achieved.
- Counterfeit money (counterfeiting). This problem has also not been solved to date. Despite the fact that different countries of the world issue new banknotes almost every decade of years, fraudsters still manage to forge even the most secure banknotes.
Life time
Like any other thing, banknotes themselves have a lifespan. For a variety of reasons, the state may reissue or stop the production of banknotes. New banknotes most often become technologically thought out: they are made of more stable material, have several degrees of protection that were not used before. But there are situations when the reissue of banknotes is simply necessary. For example, the service life of banknotes is coming to an end - the material is losing quality, so new banknotes need to be put into circulation. Also, history shows us several cases of sudden re-issuance of banknotes - revolutions and changes in political power can affect this. The new ruler has the right to change the image and content of any banknote.
Let's not forget about the economy, because with a sharp devaluation, the first thing that will be felt by a drop in the standard of living is just the cost of banknotes. It would be more accurate to say that the value of a banknote during devaluation may not coincide with the current state of the economy - in this case, a reissue is also necessary, and the service life of banknotes of previous years immediately ends.
Validation
Due to the constant fraud and provocation, many measures have been taken to date to protect banknotes. If it is easier with coins, then banknotes are really difficult to protect, the constant innovations of different countries confirm this. The authenticity of banknotes cannot be determined "by eye", because today fraudsters use the most sophisticated methods of forgery. Simple watermarks and layered highlights, which were the know-how in the art of printing ten years ago, are now being counterfeited very quickly. Therefore, Russian banknotes, for example, are updated every 5-10 years. You may not notice specific changes, but if you take even 100 rubles from the early 2000s and compare it with the modern one, you will find many differences. There are many ways to check banknotes.
Cost of banknotes
Of course, in the modern world, almost all countries use banknotes, the cost of which is not too high. According to various numismatists, the real value of a Russian banknote ranges from 20 to 100 rubles, depending on the degrees of protection imposed on it. If 50 rubles are protected only by highlights, a transparent image and watermarks, then banknotes of 1000 and 5000 rubles have the maximum number of degrees of protection, which is logical - after all, fraudsters will try to fake them.
Reference currency
The main currency on Earth is considered to be the dollar. Dollar banknotes undergo constant changes in value, the entire world resource market is valued in dollars. This happens because America from the very beginning of its existence has been the center of the world market for sales and consumption. The currency of this particular state is the standard today. Dollar banknotes themselves hardly change in design. Probably, each of you has at least seen a dollar bill, if not in life, then at least in a movie or video game. But a genuine American bill is almost impossible to either fake or devalue - it has a huge number of degrees of protection and is in circulation all over the world, in a bank of any state you can easily exchange local currency for dollars.
It is commonly believed that the euro is also the main world currency, but this is not entirely true. Since we live in countries close to Europe, it seems that the euro is a very important currency, because we see the exchange rates in banks both in dollar terms and in euros. In practice, the latter are mainly used by countries that are members of the European Union, nothing more. In Asian, South American and African countries, the euro currency is not quoted in the same way as the dollar.
Information in conclusion
The influence of banknotes on the formation of the market is colossal, they are used everywhere and everywhere. As long as states take responsibility for protecting the banknote, the banknote itself will be the safest currency - money from an Internet wallet or a bank card is stolen more often, because cybercrime is growing exponentially, and at the same time, the percentage of trust in physical money is increasing. This is the most profitable and safe instrument of relations in any market, the check of banknotes by time proves this.
central banks, backed by goods, and there is no exchange of them for gold. It enters circulation through bank lending to the state, bank lending to the economy through commercial banks, and the exchange of foreign currency for banknotes of a given country. In general, the connection of the banknote with the needs of the production and circulation of goods is gradually weakening and it is turning into ordinary paper money.
Banknotes (bank notes) have become similar to paper money, as they are issued by the central bank with a forced exchange rate set by the state. Their emission and provision are associated with . Therefore, now banknotes, as a rule, are called paper money. There are economists who believe that modern banknotes have retained to a certain extent their credit nature, since they are put into circulation in the order of bank lending to the economy and the state.
The modern banknote has essentially lost both guarantees, not all bills rediscounted by the Central Bank are backed by goods, and there is no exchange of banknotes for gold. Now the banknote enters circulation through bank lending to the state, bank lending to the economy through commercial banks, and the exchange of foreign currency for banknotes of a given country.
MODERN BANKNOTES. After the global economic crisis of 1929-1933. the exchange of banknotes for gold was discontinued. Modern (non-changeable) banknotes, called bronze, are issued for lending to the economy, the state and for the growth of official gold and foreign exchange reserves. Thus, the cash turnover is reduced and replaced by non-cash. In the context of inflation and attempts at state regulation of money circulation, the evolution of the monetary system has now led to a decrease in the differences between banknotes and paper money.
The modern banknote has lost, in essence, both guarantees, not all bills rediscounted by the Central Bank are backed by goods and there is no exchange of banknotes for gold.
The mechanism of free exchange of classical banknotes for gold or silver excluded their excessive amount in circulation and depreciation. Modern banknotes are not exchanged for gold and do not retain their commodity nature. Banknotes are issued through the following channels
Unlike classical banknotes, modern banknotes lack both types of security; the free exchange for gold has ceased; in the sphere of bills of exchange, financial obligations predominate. Currently, the issue of banknotes is under the full control of the state, which takes full responsibility for the operation of the monetary system.
Banknotes are promissory notes issued by banks in exchange for discounted or pledged private commercial bills. The classical banknote had commodity and gold backing. The issue of modern banknotes is carried out through the mechanism of lending to the state against the security of its obligations.
The issue of modern banknotes is almost entirely fiduciary, i. not backed by gold. The official gold content of national monetary units has been cancelled. The modern mechanism for issuing banknotes is based on a) lending to commercial banks b) the purchase of government securities c) direct lending to the government d) the purchase of foreign currency e) the purchase of precious metals.
The value of the original (base) money increases as a result of the functioning of the banking system. The actions of commercial banks do not affect the volume of base money. Base money is created and regulated by the CBR, and only the CBR can destroy it. The degree of development of the banking system, the decisions of commercial banks on lending and the reserve ratio established by the Central Bank of the Russian Federation determine what kind of money supply will be created based on a given amount of money received in the system of commercial banks. At the same time, it must be borne in mind that the modern mechanism for issuing banknotes is based primarily on lending to commercial banks and the state. When lending to banks, the issue of banknotes is secured by bills of exchange and other bank obligations; when lending to the state - state debt obligations, i.e. the passive operation of the Central Bank of the Russian Federation - the issue of banknotes - depends on its active operations of loans to banks and the treasury. The deposit issue of the Central Bank of the Russian Federation means that the loan is credited to the accounts of commercial banks and the Treasury (Ministry of Finance) opened with the Central Bank of the Russian Federation. In this case, the sources of resources of the Central Bank of the Russian Federation are the deposits of commercial banks and their required reserves, as well as the deposits of the treasury (state budget funds).
D. appeared as a result of the development of commodity production and the market, when noble metals - gold and silver - were chosen to be the universal equivalent. However, in the modern world, the functions of diamonds are everywhere performed by paper diamonds, which are inferior substitutes for gold. Paper denominations (banknotes) are signs that replace gold in the process of buying and selling. They are issued by the state and have a forced exchange rate, i.e., the gold content of the paper currency officially established by it. Paper bills function in the form of treasury notes, which were originally issued to finance the needs of the state and were withdrawn through taxes, and banknotes that arose from credit relations and were issued to service the real flow of goods and services. Until the 30s of the XX century. the distinction between treasury notes of the gold reserve was maintained. In the US, until 1971, 25% of banknotes had to be backed by gold. By now, the distinction between treasury notes and banknotes has effectively faded.
It was the monopoly of issuing activity that served as the source from which modern central banks drew their secondary functions and distinctive features. Control over the state of the gold reserves of the banking system, no doubt, must accompany the emission monopoly. Keeping a significant portion of bank cash reserves is also related to this factor, and it is, of course, convenient for banks to keep their unused funds at the central bank. However, they can, with a pure heart, entrust their reserves to a single external institution only when they are fully convinced that this institution will be able to return them under any circumstances, and in a form that will be accepted by the public. This can only be guaranteed by the fact that, if necessary, the banknotes of this institution can be declared official tender. Last but not least, control over the issuance of banknotes gives the central bank power over the overall credit situation as well. All of the above allows us to use the term "centralized banking system" both in the narrow and in the broad sense of this expression.
Banking office equipment includes specialized machines and devices designed to process banknotes, coins, various kinds of plastic credit and other cards. Cash processing technology in a modern bank involves at least four stages of receiving, accounting and processing cash, packing money for long-term storage (recalculation cash desk), exchanging and / or exchanging foreign currencies (exchange office) and, finally, issuing cash to bank customers (checkout desk). The first three steps also require banknote authentication.
If the connection with the needs of circulation is broken, credit money loses its advantages and turns into paper banknotes. This is confirmed by the modern experience of money circulation in Russia, where banknotes are put into circulation (issued).
In the capitalist E. o. countries. banknotes consists of gold reserves, commercial bills, treasury bills and other government securities. Gold reserves as E. o. was of great importance under the gold standard, when in exchange for banknotes, their holders could receive gold. With the collapse of the gold standard and the cessation of the free exchange of banknotes for gold, the gold reserve only formally continues to be included in the E. o. When providing banknotes with commercial bills, the number of banknotes in circulation increases or decreases mainly in accordance with the growth of production and turnover or their reduction. Of a completely different nature is the provision of emission with state securities, which is predominant in the conditions of modern capitalism. The issue of debt obligations of a bourgeois state is not associated with an increase in production and trade, they are issued to cover government spending, Ch. arr. military. Thus, the growth of banknote emission, provided by these obligations, does not reflect the increase in the need for turnover in money and, as a rule, is of an inflationary nature. Displacement from structure E. about. gold and commercial bills and their replacement by state papers, i.e. fictitious collateral, is one of the manifestations of the disorder of the monetary system under the conditions of the general crisis of capitalism.
In the era of imperialism, financial institutions, like the entire credit system, become an instrument of the financial oligarchy. Although directly E. b. are not engaged in lending to enterprises, their activities serve the interests of the monopolistic. bourgeoisie. The issuance of banknotes is largely used to finance the arms race, on which the monopoly makes huge profits through the system of government military orders. In addition, their credit resources E. b. transmit Ch. arr. at the disposal of the most powerful commercial banks, which, in turn, use these resources to lend to the largest monopolized enterprises. In the conditions of state-monopoly. capitalism, the connection between E. b. with the bourgeois state. This finds its expression not only in the fact that the ownership of E.'s capital. and their management is transferred to the state, but also in the fact that E. b. widely finance the state through the purchase of government securities. If during the existence of the gold standard a significant part of the funds of E. b. was placed in gold reserves, which ensured the free exchange of banknotes for gold, then under the conditions of modern capitalism, mainly government securities became the provision of banknote emission.
Being signs of value, K. about. about. in this respect are similar to paper money. But in contrast to paper money, which is usually used for spending and covering budget deficits, cash-flow. about. issued taking into account the needs of circulation in the means of circulation and payment. They are payable in cash upon expiration of their validity (bills and checks) or exchanged for gold at any time upon presentation (banknotes). Since K. o. about. arise on the basis of a loan and must be paid in metal. money, they cannot be in circulation in excess and depreciate. But under the conditions of modern capitalism, when the exchange of cooperative about. stopped for gold, a significant part of them is issued not to meet the needs of circulation in money, but to finance state, primarily military, expenses (for example, the issuance of treasury bills and the issuance of fiat banknotes in the order of accounting for these bills). Such K. about. about. are reborn in paper money and are subject to inflation (see).
Gradually, one product stood out from the whole variety of goods, personifying the wealth of all peoples, fully fulfilling all five monetary functions and the role of a universal equivalent. This commodity was gold. To facilitate commodity-money circulation, gold was represented by paper money, treasury and bank notes. Until the 30s. 20th century the distinction between treasury notes and banknotes was maintained, which consisted in the fact that the latter were backed by gold and other assets of the state, and their issue was limited to the size of its gold reserve. In the US, until 1971, 25% of banknotes had to be backed by gold. With the abolition of the gold standard, the distinction between treasury notes and banknotes blurred. In the modern world, after the final abolition of the gold standard in the early 70s. the functions of money are universally performed by decreed paper money.
Professor L. Khodsky significantly expands the boundaries of financial science, including issues of monetary circulation (more precisely, paper money), believing that paper money is a type of loan operation. the amount of bank notes not actually covered by ringing cash represents the instrument of credit 3. He correctly approached the analysis of paper-money emission. Paper money can be used by the state as active in case of significant budget deficits. This process became commonplace in capitalist states with the outbreak of the First World War. However, the use of money as a revenue source of the budget does not give grounds to consider money as a financial category. Money is an independent economic category, which has a specific social purpose, independent functions, and their quantitative growth as a result of state policy ultimately affects only purchasing power, i.e. leads to their depreciation. The regulator of the amount of money in circulation is, first of all, the presence of masses of commodities. However, in modern conditions, the amount of money in circulation depends on a number of other factors that cause
It has already been noted above that the widespread development of credit led to the emergence of such varieties of paper money as bills and banknotes. In the XX century. checks are getting more and more common. Checks are not, strictly speaking, paper money. Deposits are money, i.e. demand deposits in commercial banks. If, for example, you are the owner of a deposit, then by writing a check, you instruct the bank to transfer money from your contribution (deposit). Therefore, in this case, checkable deposits are money. Checkable deposits save cash in circulation. Modern paper money circulation is almost 90% non-cash circulation.
However, savings in the form of balances in bank accounts in the form of national and foreign banknotes in modern conditions are predominant. It is thanks to them that investments and the development of social production are possible, as a result of which the importance of this function of money is difficult to overestimate. It is important, however, to remember that only the metal form acts as true accumulation, and the credit (bank
Riksbank (Sveriges Riksbank) - the state issuing bank of Sweden, all fixed capital belongs to the state. Is under
Federal Agency for Education
Novosibirsk State University of Economics and Management
Department: Monetary and credit relations
banknote
Student: Prosvetova
Svetlana Gennadievna
Group number: MOP-81
Name of specialty:
Organisation management
Literature
1. Banknote: concept, main features
There are several concepts of the word "banknote". A banknote, as we understand it in everyday life, is cash embodied in paper and paint. If we consider this concept from the side of the world economy, a banknote is a form of credit money, which has a number of differences from paper money. Let's look at each of the definitions.
Banknote - in the broad sense of the word, a banknote made of paper, thick fabric (usually silk), metal or plastic, usually rectangular in shape;
in a narrow one - a bank note of a large denomination (as opposed to a treasury note of a small denomination or a change token that replaces a token coin).
Banknotes were previously issued by both state and private banks and financial companies, currently by the central banks of states and are required to be accepted throughout their territory along with coins.
The most ancient banknotes are Chinese. They began to be produced in the 8th century. In the USSR, starting from 1924 and up to 1992, paper banknotes with a denomination of up to 10 rubles (one chervonets) were issued by the Treasury and were called State Treasury notes, from 10 rubles and above - by the State Bank and were called Tickets of the State Bank of the USSR.
From a scientific point of view, a banknote is a credit money issued by the Central Bank by rediscounting bills and lending to various organizations and the state. Initially, banknotes were issued by commercial banks and represented a bank bill. Their appearance was associated with the need to replace a promissory note in the form of a commercial bill of exchange with a bill issued by a bank that had a higher credibility than its predecessor. Unlike a bill of exchange, a banknote was a kind of cash that could carry out an act of immediate payment, including fractional parts. Over time, the consolidation of the monopoly right to issue banknotes for issuing (banks) gave the banknotes a public state guarantee. At the same time, they turned into perpetual debt obligations with universal negotiability, that is, they turned into mandatory legal tender in the entire territory of a single state.
The first banknotes as a kind of credit money became known from the end of the 17th century. and had double security: gold, since the gold reserve of issuing banks ensured their exchange for gold, and commodity, since their issue was made on the basis of commercial bills. Such banknotes were called classical and had high reliability and stability. In this regard, classical banknotes were able to perform the function of simple storage of value inherent in full-fledged money, through the mechanism of their exchange for precious metal (gold, silver). Under conditions of free exchange of banknotes for gold, the number of change banknotes in circulation must be equal to the amount of gold required for circulation. Moreover, each banknote was a representative of the amount of gold indicated on it.
Unlike classical ones, modern banknotes do not have both types of security: the free exchange for gold has been stopped; in the sphere of circulation of bills, financial obligations predominate. Currently, the issue of banknotes is under the full control of the state, which takes full responsibility for the operation of the monetary system.
2. The difference between a banknote and a bill of exchange and from paper money
When comparing certain concepts, first of all, you should understand what and with what we will compare. In the first section, I gave a definition of the concept of "banknote", now let's consider in more detail: what is a "bill" and "paper money".
A promissory note is a written promissory note of a strictly statutory form, giving its owner (promissory note holder) an indisputable right, upon maturity, to demand from the debtor (promissory note drawer) payment of the specified amount of money. The bill has the following features:
1. Abstractness - an obligation without specifying the reason for its occurrence;
2. Indisputability - there is no possibility to refuse payment under the obligation;
3. Negotiability - the ability to transfer a bill to third parties.
The main differences between a banknote and a bill of exchange are that:
1. For a bill of exchange, the debtor is a firm, a private person, for a banknote - the Central Bank (issuing);
2. Banknotes have a public guarantee in the form of resources stored in the bank, therefore they act as public credit money with a special quality - universal negotiability. The bill of exchange has only a partial guarantee and is not a universal means of payment.
3. A banknote is a perpetual obligation. The circulation of bills of exchange is limited by the term of their payment.
Paper money is banknotes (signs of value) endowed with a forced denomination, usually not exchanged for metal and issued by the state to cover its expenses. The main properties of paper money are:
1. Lack of intrinsic value;
2. The issue of paper money is associated not only with the real needs of circulation, but also with growing unproductive costs.
3. The mechanism of spontaneous regulation of monetary circulation does not work on paper money, since paper money does not perform the function of a treasure.
4. The possibility of depreciation due to violation of the law of monetary circulation.
The main differences between banknotes and paper money are:
1. Subject of issue - banknotes were issued only by a bank, paper money can be issued in addition to the bank by the State Treasury or the Ministry of Finance;
2. Security - paper money is not exchangeable for metal and, as a rule, is not secured. Banknotes at the time of issue are backed by gold or bills of exchange;
3. The difference in the procedure and order of issuance - the classical banknote was issued in the order of crediting the turnover, paper money was issued initially to cover the budget deficit.
The transition of the issue of banknotes under the control of the state gradually blurs the line between banknotes and paper money. Technically, the banknote is executed on paper and in the sphere of circulation replaces metal coins. Therefore, it is perceived as paper money, acting as a substitute for gold. This is also facilitated by the fact that the volume of issue of banknotes is determined not only by the total value of bills of exchange presented for accounting, but also by the value of settlements in that sphere of commodity circulation where bills of exchange are not valid, but cash is used. The sphere of banknote circulation turns out to be the area where the metallic circulation and the circulation of credit money act together, through the same instrument of circulation. Insofar as the banknote replaces the bill, it is credit money, insofar as it simultaneously replaces gold in circulation, it is the representative of metallic money. If the state issues fiat banknotes into circulation, they turn into state paper money. This, among other things, leads to the fact that concepts are mixed, since we are talking about the same form of money, only in relation to different circumstances. When there is a healthy circulation of money, the banknote serves as a form of credit money, designed to perform mainly the function of a medium of exchange. But when the state abuses its right to issue, suspends or stops the exchange of banknotes for gold due to certain circumstances, banknotes degenerate into state paper money that does not have a strong connection with either metallic or credit money.
3. The main directions of issuing modern banknotes
Currently, a modern banknote is issued in three areas: bank lending to the economy, lending to the state, and the growth of official gold and foreign exchange reserves.
The gold coin standard collapsed with the onset of the general crisis of capitalism, when World War I broke out in 1914-1918. It was replaced by paper money circulation. After World War I, in 1924-28, an attempt was made to restore the Gold Standard, but not in its former form, but in the form of a gold bullion and gold trade standard. The circulation of gold coins could not be restored due to the lack of gold reserves and their uneven distribution between countries. Large amounts of banknotes were exchanged for gold bars weighing 12-14 kg (in Great Britain, France) or for foreign currency, which, in turn, was exchanged for gold bars (in Germany, Belgium, etc.). Gold was completely ousted from domestic circulation in all countries except the United States, where it lasted until 1933. The exchange of banknotes for bullion was carried out, as a rule, only if it was necessary to repay the balance of payments deficit by exporting gold. However, these modified forms of the Gold Standard did not last long. Their complete collapse was caused by the world economic crisis of 1929-1933, as a result of which paper money circulation was established in all capitalist countries, including the USA, with its inherent phenomena of inflation, rising commodity prices, sharp fluctuations in exchange rates, etc. In 1931 the Gold Standard was abolished in Great Britain and Japan, in 1933 in the USA, in 1935 in Belgium and Italy, in 1936 in France, Switzerland and the Netherlands.
After the termination of the free exchange of banknotes for gold, it was never resumed.
Literature
1. en.wikipedia.org/
2. Great Soviet Encyclopedia
3. Leontiev V.E., Radkovskaya I.P. Finance, money, credit and banks: Textbook. - St. Petersburg: Knowledge, IVESEP, 2003. -384 p.
4. Shmyreva A. I. Money. Credit. Banks: Educational and methodical complex. - Novosibirsk: NSUEU, 2008. -132p.
Functions of the central bank
Essence and functions of the Central Bank
The Central Bank of the Russian Federation is the main bank of the state, which is endowed with special powers, including the issue of national money and the regulation of commercial banking organizations.
The central bank in any country is a government agency that is endowed with a monopoly on the issue of banknotes. The main functions of the Central Bank is to issue money, the implementation of the national monetary policy. This bank is the banker of the government and the bank of banks.
The main functions are to store the currency and gold reserves of the state. This bank does not work with individuals and enterprises; commercial banks and special credit financial institutions act as a link between it and the economy. The Central Bank manages and controls the entire credit and financial system, setting the required reserve ratios for commercial banks and acting as a creditor of last resort for them.
The function of the Central Bank is the emission center
The central bank is an issuing center, that is, it is engaged in the issuance of money. The Central Bank has the right to issue banknotes. The bank regulates the volume of cash issue, taking into account the total costs of monetary policy.
The implementation of the issue of cash is carried out through the sale of banknotes and coins to commercial banks, exchanging their reserves in the Central Bank. At present, the value of the emission function is slightly reduced, since banknotes have become a small part of the money supply in industrialized countries. At the same time, banknote emission is still used for payments in the retail sector. The higher the share of circulation in the state, the greater the importance of bank emissions.
bank of banks
In the credit sphere, the role of the Central Bank is to function as a “bank of banks”. The main clients of the Central Bank are not commercial and industrial enterprises and citizens, but credit banks, mainly of a commercial nature.
Commercial banks can act as an intermediary between the economy and the Central Bank. Commercial banks are serviced by the Central Bank for passive operations.
The rarest and most expensive Russian banknotes
Banks keep part of their money in the Central Bank as a cash reserve.
Most states impose on commercial banks the obligation to keep a share of their cash reserves in the Central Bank. These reserves are referred to as required bank reserves. The Central Bank can be thought of as a lender of last resort for commercial banks. He conducts lending in the form of rediscounting bills of exchange, securities of commercial banks.
government bank
The Central Bank, regardless of the ownership of the capital, has a close relationship with the state. He acts as the main banker of the state and advisers to the government in the field of financial and monetary problems. The treasury stores free funds precisely on the current accounts of the Central Bank, using them from its expenses.
The Treasury can pay suppliers with checks at the Central Bank. At the same time, the Central Bank uses interest-free and free funds of the Treasury, performing free operations to replenish the budget. On behalf of the Treasury, the Central Bank may accept tax payments to its current account.
When there is a deficit in the state budget, the function of lending to the state and public debt management, which are carried out with the help of the operations of the Central Bank, can increase.
Other functions of the Central Bank
The Bank performs the function of monetary regulation, is the main conductor of monetary regulation of the economy. The main goals of this policy are to achieve stable economic growth, reduce inflation and unemployment, and equalize the balance of payments.
The central bank plays the role of a currency center by regulating the reserves of foreign currency and gold. Traditionally, the Central Bank is the custodian of gold and foreign exchange reserves. The bank also performs the function of issuing government securities. Operations with state securities make it possible to provide market financing of the budget deficit, forming the foundation for the development of elements of the capital market, contributing to the implementation of an effective monetary policy.
Examples of problem solving
Paper money(paper money) - signs of value that replace full-fledged money in circulation. Paper money is not backed by precious metals and is not convertible into them; it is endowed with a forced exchange rate and is issued by the state for use in cash circulation and to cover its expenses.
Paper money has several meanings:
- legal tender - banknotes (credit money) put into circulation for lending to the economy, the state and against the growth of state gold and foreign exchange reserves;
- a means to cover the expenses of the state, mainly the budget deficit, - treasury notes, issued, as a rule, by the treasury;
- banknotes and any securities that can be used as money, such as checks, bills of exchange (even if they are not legal tender).
Paper money performs the functions of means: measures of value; appeals; payment; accumulation and savings during periods of their relative stability.
Paper money has no value of its own; it acquires a representative value in the process of circulation. The state, by setting a compulsory exchange rate for paper money, gives them social significance.
The real value of paper money is determined by the law of value and the laws of money circulation, and not by the forced exchange rate and the mass of issued paper money. The gold content of the monetary unit fixed by the state during the period of the gold standard (until 1978) could not correspond to its actual content.
When paper money circulates, they depreciate, which is expressed in a decrease in the purchasing power of money in relation to goods, services, gold and foreign currency.
Paper money arose in the process of circulation of real money (gold and silver coins) as the denomination indicated on the coins was separated from the real weight of the metal contained in them.
In fact, the state can put into circulation an unlimited amount of paper money in any denominations. However, the issue of paper money is subject to objective economic laws. According to the law of money circulation, the amount of money in circulation is directly proportional to the sum of commodity prices and inversely proportional to the velocity of money circulation. Its violation causes each banknote to "shrink" and represent a smaller amount of value.
Paper money first appeared in China around the 7th century. Initially, they were a handwritten document confirming the deposit of heavy (iron or bronze) coins to the merchant. Often, on this receipt document, they drew the number of “coins” that the receipt replaced (one receipt of the 14th century represented 1000 bronze coins with a total weight of 3.5 kg).
In the XVII-XIX centuries. paper money was issued in France, Great Britain, Sweden, Russia, and the USA. In France, in 1776, the Bank of Commercial Accounting was established, which was entrusted with the issuance of banknotes intended to cover government expenses. Although these banknotes were called banknotes, they were essentially paper money. The issue of paper money was widely used in France during the French Revolution of 1789-1794: in 1789-1790. Assignats (French assignat) were issued, initially for 2.4 billion livres, by 1795 their amount was 40 billion livres. In February 1797, the assignats were annulled, and France returned to metallic money circulation.
In the 19th century France returned to the paper-money system twice: in connection with the February Revolution of 1848 and the Franco-Prussian War of 1870–1871. During the Franco-Prussian War, the French government expanded the issuance of banknotes to finance the war, declared banknotes to be unchangeable and gave them a forced exchange rate. Banknotes have become paper money. This process later became typical for many states.
In England, a paper-money system existed from 1797 to 1820. In 1797, the "Restriction Act" was issued, according to which the Bank of England was exempted from the exchange of banknotes for gold, a compulsory rate of banknotes was established, and the latter essentially turned into paper money.
Question 15 Banknote as a type of credit money. Classic and modern banknote
In 1820, the exchange of banknotes for gold was restored, banknotes again turned into credit money.
In North America, paper money was issued earlier than in European countries, even during the existence of the North American colonies of England (Pennsylvania, South and North Carolina, etc.). During the struggle of the English colonies in America for independence, the Congress of States in 1775 adopted a decree on the issue of "continental money" for 3 million dollars. By 1779, their amount exceeded 240 million dollars. The rate of depreciation of "continental money" outpaced their release. The rate of paper money fell rapidly, 1 silver dollar in 1780 was equal to 50–60 paper dollars. “Continental money” was liquidated on March 18, 1780 by devaluation (1 dollar in metal was exchanged for 40 paper dollars) with a delay in exchange for 6 years and using 5% bonds.
The US government re-issued paper money during the Civil War of 1861-1865 with greenbacks. In total, paper money was issued in the amount of 450 million dollars, they depreciated 2.5 times (for 100 gold dollars they gave 262 dollars in greenbacks). With the end of the war, the excess amount of money was withdrawn from circulation and the stability of the dollar was restored through revaluation (revaluation).
In Russia, paper money was first issued in 1769 under Empress Catherine II in the form of banknotes, which were accepted as payments along with copper and silver coins. Initially, banknotes were issued in the amount of 1 million rubles. Catherine II intended to limit the issue of banknotes to the amount of 100 million rubles. However, by 1796 banknotes were issued for more than 150 million rubles. Banknotes in Russia were in circulation until the monetary reform was carried out by the Minister of Finance, Count E.F. Kankrin 1839–1843
In Soviet Russia, paper money existed in the form of the so-called "kerenki", issued by the Provisional Government in August 1917 in denominations of 20 and 40 rubles; in 1919 the Government of the RSFSR issued calculation marks, later they were called "sovznaki". "Sovznaki" were twice denominated: in October 1921, 1 rub. banknotes of the sample of 1922 was equated to 10,000 rubles. all previously issued banknotes; in November 1922 1 rub. sample 1923 was equated to 100 rubles. sample 1922 or to 1 million rubles. all previously issued banknotes. With these denominations, the exchange of banknotes was not carried out, both newly issued banknotes and banknotes subject to denomination were in circulation, for which a certain period of circulation was established (up to 6 months after the announcement of the denomination).
During the period of the monetary reform of 1922-1924. The Soviet government in March 1924 issued treasury notes in denominations of 1, 3, 5 rubles. Parity was established between chervonets and treasury bills (1:10). Thus, the gold content of the ruble was determined as 1/10 of the gold content of the chervonets, i.e. 0.774234 g of pure gold. Treasury notes were provided with all the property of the state, i.e. did not have specific support. The issuer of treasury notes was the People's Commissariat for Finance of the USSR.
In 1925, the issue of treasury notes was transferred to the State Bank of the USSR. Formally, treasury notes in the USSR were issued and were in circulation until 1991. In 1991, banknotes in denominations of 1, 3, 5 rubles. became known as "Tickets of the State Bank of the USSR". In 1993, these banknotes were withdrawn from circulation. Regardless of their name, they remained paper money because they had no intrinsic value and no commodity and gold backing.
Banknotes(from the English banknote - bank notes) - credit notes of money issued by issuing banks and replacing metal money as a means of circulation and payment. Initially, it is a security that certifies the order of the issuing bank to itself to pay its bearer immediately upon presentation of the amount of money in circulation. Currently - a substitute for paper banknotes, issued by the central bank of issue.
The mention of the first Banknotes refers to Ancient Babylon. The largest banking houses of Babylon issued documents certifying the fact that the issuer had accepted a certain amount of money for storage and the obligation of the custodian to return it at the request of the bearer of the document.
Bank notes, the issue of which is regulated by the state, were first issued with the establishment of the Bank of England (1694).
The most expensive banknotes of modern Russia
They acquired the force of legal tender (turned into national money) in 1833. In France, banknotes became a type of national currency in 1800-1803, in Germany (Prussia) - in 1846, in Holland - in 1814-1830 gg. Until the second half of the nineteenth century. banknote circulation was poorly developed and served mainly settlements between capitalists.
From the second half of the XIX century. a system for regulating the issuance of bank notes is being formed that meets the requirements of capitalist production. Bank notes began to be used not only in the sphere of wholesale turnover, but also as a means of payment for the payment of wages and as a means of circulation in retail trade.
The transformation of banknotes into legal tender allowed the state, if necessary, to use the issue of banknotes to cover its expenses. Issuing banks were allowed to issue banknotes secured not by gold and bills of exchange, but by government bonds and were released from the obligation to exchange banknotes for gold. Thus, in fact, Bank notes turned into state paper money with a forced exchange rate.
The issue of banknotes in Russia was first organized by the Moscow and St. Petersburg banknotes in 1769. These banknotes were called banknotes. Subsequently, Russian banknotes were also called state credit notes, and later - bank notes or notes of the State Bank. The last name was preserved for Banknotes and in the USSR. Banknotes were partly backed by gold, precious metals and other assets, but their main backing was commodity masses.
Banknotes are banknotes, currently one of the main types of paper money. As a rule, they are issued by central banks. In Russia, they are produced by order of the Central Bank of the Russian Federation and are made at Goznak Federal State Unitary Enterprise from high-quality cotton paper. Violet, red and light green fibers are embedded in the paper, as well as a security thread located vertically and visible through the light. The paper has local watermarks placed on the left and right on the coupon margins of the banknote.
The following types of banknotes are currently in circulation in Russia:
1. Banknote of the Bank of Russia denomination
10 rubles;
2. Banknote of the Bank of Russia denomination 50 rubles;
3. Banknote of the Bank of Russia denomination 100 rubles;
4. Banknote of the Bank of Russia denomination 500 rubles;
5. Banknote of the Bank of Russia denomination 1000 rubles;
6. Banknote of the Bank of Russia denomination 5000 rubles.
Sources used
1. Great Soviet Encyclopedia - M .: Soviet Encyclopedia, 1969,
2. Dictionaries.yandex.ru,
4. Vedomosti.ru/qlossary
Lyubivaya I.V.
BANKNOTE (bank, or bank, ticket)
1) initially - a security, certifying the order of the issuing bank to itself to pay its bearer immediately upon presentation of the amount of money in circulation; 2) currently - a substitute for paper banknotes, issued by the central issuing bank.
The mention of the first B. refers to Ancient Babylon. The largest banking houses of Babylon issued documents certifying the fact that the issuer had accepted a certain amount of money for storage and the obligation of the custodian to return it at the request of the bearer of the document. Usually their bearer was the one who deposited the money, although there were no obstacles to the transfer of the corresponding rights.
In Europe, the first banknotes were issued in 1694 with the establishment of the Bank of England. With the adoption of R. Peel's Banking Act in 1844, the right to issue banknotes became monopoly and was granted only to the Bank of England. This act also provided for a special system of security for banknotes, which later received the name English: all emissions, with the exception of a fixed amount, were to be backed by the metal reserves of the issuing bank, mainly gold. This was the first system of partial provision of B., which replaced the system of full provision.
The issue of banknotes in Russia was first organized by the Moscow and St. Petersburg banknotes in 1769. These banknotes were called banknotes. Subsequently, Russian banknotes were also called state credit notes, and later bank notes or tickets of the State Bank. The last name was preserved for B. and in the USSR. At present, Russian banknotes are called banknotes of the Bank of Russia.
In France, the issuance of banknotes began in 1800–1803; in Germany, Prussia, in 1846. monopoly on the production of B. These countries provided a new system for supplying B., which received the name German. In contrast to the English system with its fiduciary issue limit (bank issue not backed by the stock of precious metals of the issuing bank), the German system provided for a minimum share of security for B. At the end of the 19th and beginning of the 20th centuries. in various countries, this share ranged from 50 to 30% of the total volume of B issuance. Later, another collateral system was formed, called the American one, the essence of which consisted in a kind of “doubling” of partial collateral: 15% of the volume of B issuance.
backed by gold and, moreover, 90% by government securities. A special kind of prescription existed in France, where the legislator simply determined the maximum amount of banknotes that could be in circulation, without specifying what and how much it was secured, although, of course, it also proceeded from certain minimum standards of security.
Thus, the volume of issuance of gold was tied to the size of the gold reserves of issuing banks, which created, firstly, the possibility of exchanging gold for gold, which at that time played the role of a money metal, but, secondly, during periods of outflow of gold reserves, it led to financial crises. During the First World War, the exchange of gold for gold was actually stopped, although this circumstance received legal consolidation much later. Banknotes first became substitutes for actual money in circulation, and then for paper money.
Due to the loss of the link between gold and gold backing, it can be concluded that at present they should be issued either for the growth of national wealth, or in the form of crediting for production, foreign and domestic trade. Consequently, bills turn into obligations of the state as a whole, since it gives them a coercive course, i.e. is obliged to guarantee that each holder of B., regardless of their amount, will be able to exchange them for real goods, works, services - elements of the asset of the national economy.
Thus, today's entry about the "secure" of tickets of the Bank of Russia is tantamount to the assumption by the state, represented by the Central Bank, of the obligation to ensure a stable and sustainable purchasing power of the monetary unit. Moreover, the obligation of the state to ensure the purchasing power of banknotes (B.
and coins) makes sense only under the condition of a reservation on the scale of prices beyond which the state has no right to go.
A banknote and a coin of the Bank of Russia cannot be declared invalid (invalid as a legal tender) unless a sufficiently long period of their exchange for a banknote and a coin of a new design is established. Sufficiently long means a period of at least one year. No restrictions on amounts or subjects of exchange are allowed. Decisions on the issuance of new banknotes and coins and on the withdrawal of old ones, as well as the denominations and samples of new banknotes, are made by the Board of Directors of the Bank of Russia.
Modern money: stages of success
Descriptions of new banknotes, including banknotes, must be published in the media. Dilapidated and damaged banknotes are exchanged by the Bank of Russia without restrictions. At present, banknotes are circulating in Russia in denominations of 5,10,50, 100, and 500 rubles.
Wikimedia Foundation. 2010 .
See what "Banknote" is in other dictionaries:
BANKNOTE
BANKNOTE- BANKNOTE, banknote, male, and BANKNOTE, banknotes, female. (English bank note) (fin.). An interest-free credit note issued in round amounts issued by an issuing bank, the same as a bank note. Exchange of banknotes (or banknotes) for gold. ... ... Explanatory Dictionary of Ushakov
banknotes- banknote, m., and BANKNOTE, banknotes, f. [English] bank note] (fin.). An interest-free credit note issued in round amounts issued by an issuing bank, the same as a bank note. Exchange of banknotes (or banknotes) for gold. Big dictionary ... ... Dictionary of foreign words of the Russian language
banknotes- banknotes, m. and banknote, f., pl. banknotes, kind banknotes and banknotes ... Dictionary of pronunciation and stress difficulties in modern Russian
banknotes- noun, number of synonyms: 5 banknote (3) money (3) banknote (3) ... Synonym dictionary
banknotes- a, genus. pl. ov, m. The main type of paper money, a credit mark issued by the issuing bank and replacing metal money as a means of circulation and payment. New banknote. Synonyms: de / gentle sign Related words: bank / tny ... ... Popular Russian Dictionary
banknotes- note, part Ol. Banknotes, paper pennies, bank notes ... Dictionary of the Lemkiv speaking
Banknote- see banknotes Explanatory Dictionary of Efremova. T. F. Efremova. 2000 ... Modern explanatory dictionary of the Russian language Efremova
banknotes- banknotes, banknotes, banknotes, banknotes, banknotes, banknotes, banknotes, banknotes, banknotes, banknotes, banknotes, banknotes (
- (bank, credit) ticket, bill, paper money; banknotes, notes, banknotes Dictionary of Russian synonyms. banknote n., number of synonyms: 3 banknotes (2) ... Synonym dictionary
BANKNOTE- (banknote) A paper money note issued by a central bank. Banknotes originated from receipts for safekeeping of gold issued by London goldsmiths in the 17th century. These receipts began to be used as money, and their ... ... Glossary of business terms
BANKNOTE- (banknote) A paper money note issued by a central bank. Banknotes in England originated from receipts for the safe custody of gold issued by London goldsmiths in the 17th century. These receipts began to be used as money ... Financial vocabulary
banknote- A banknote of paper money issued by a central bank. Banknotes in England originated from receipts for the safe custody of gold issued by London goldsmiths in the 17th century. These receipts began to be used as money, and their ... ... Technical Translator's Handbook
BANKNOTE- (bank note) banknotes put into circulation and guaranteed by central (issuing) banks. Currently, they are the only legal tender in the territory of the Russian Federation. Their forgery and illegal manufacture ... ... Law Dictionary
BANKNOTE- (bank note) Paper money issued by a bank. In most countries, the issuance of banknotes is allowed only to the central bank (central bank) or is under its strict control. Initially, banknotes were an obligation on demand to pay ... Economic dictionary
banknote- (Banknote) Definition of a banknote, the appearance of banknotes Information about the definition of a banknote, the appearance of banknotes, facts about banknotes Contents Contents 1. First 2. Banknotes of the USSR 3. Facts about banknotes Encyclopedia of the investor
BANKNOTE- (bank, or bank, ticket) 1) originally a security, certifying the order of the issuing bank to itself to pay its bearer immediately upon presentation of the amount of money in circulation; 2) currently a substitute... Law Encyclopedia
banknote- banknotes, m. and banknote, f.; pl. banknotes, kind banknotes and banknotes ... Dictionary of pronunciation and stress difficulties in modern Russian
banknote- OK. see banknotes Efremova's Explanatory Dictionary. T. F. Efremova. 2000... Modern explanatory dictionary of the Russian language Efremova
Books
- The Million Pound Note and Other Stories The f 1,000,000 banknote and Other Stories Commented Reading Method, M. Twain. This book contains the best stories of a brilliant humorist. Seventeen stories written in the magnificent language of a classic of American literature will help improve not only English, but also ... Buy for 320 rubles
- Banknote of the Bank of Russia in 200 rubles sample 2017 Signs of authenticity, Klysh M., Shansky V. (eds.). Your attention is invited to the publication "Banknote of the Bank of Russia in 200 rubles sample of 2017. Signs of authenticity" ...
