Financial Journal № 2(4) April 2010
Innovations-Based Development as a High Way Out of the Crisis
The article author examines the technological innovations and considers them to be a source of growth for the productive forces. The author maintains that the crisis within the infrastructure emerges when the old infrastructure as a whole is in conflict with the demands and requirements associated with the new technology use. He presents a list of measures the government should take in order to create an environment that would be favorable for the mass introduction of the innovations into the economy. The author notes that one of the particular features of the Russian transition to the innovations-based economy is the fact that the country has to deal with the issues that arise from the necessity to introduce changes into the fields that are underdeveloped while taking efforts not to lag behind the developed countries or even surpass the competitors in other fields.
Keywords: innovations, economic growth, crisis, scientific and technological progress, modernization
N. Malis, I. Gorsky
The Russian Tax Policy: the State Budget Revenue Growth Prospects
The article describes the issues that relate to the current Russian tax policy formation process. To form a tax policy is one of the main problems the Russian government has to solve. The article authors examine what changes have been observed in the collection of budget revenue, first of all, in the tax collection schemes administered by the Federal Tax Service. The authors make suggestions that relate to the changes to be made in the profit tax collection system, individual income tax collection system, and other tax type calculation schemes in order to improve the budget revenue figures. The authors describe which steps should be taken in order to improve the tax collection supervision system. The authors note that the balanced tax policy should be constructed in such a way that the interests of the businesses and the wide public are taken into account and the economic efficiency of the tax collection system’ operation is maintained.
Keywords: budget revenue, tax policy, profit tax, VAT, extraction tax
Hanno Beck, Dirk Wentzel
The European Union Insolvency Recognition Procedure
The international financial crisis seems to be over, but the next and probably more severe crisis is building up fast: The possible bankruptcy of member states of the European Union. Since many states in the EU have serious difficulties to finance their budget deficits and pay for their external debt, Greece is only the most prominent example of a long list of countries with similar problems. It is a surprising observation that there is no legal provision for such a case, neither in the European Treaties nor in international law, even though historically the list of state bankruptcies is quite long. And also in modern economics, there are almost no articles dealing with this issue. Therefore the intention of this paper is to discuss criteria if and when a state becomes insolvent, who has to pay for the financial damage, how support by international institutions and organizations could be organized, what kind of reforms have to be implemented in these states in order to prevent and avoid similar difficulties in the future, and, finally and most important, which institutional regulations have to be included into a credible and sustainable European Insolvency Code (EIC). In addition to these issues, this paper discusses the specific problem of state bankruptcy within a currency union.
Keywords: financial crisis, public debt, bankruptcy of states, Euro, European Insolvency Code (EIC)
P. Zhukov, O. Isaakyan
The Interdependency of the Russian Security Market and the Macroeconomic Indicators and International Market Indexes
The article authors present the findings of the multi-factor analysis made of the Russian securities market. The aim of the analysis performed is to determine whether the changes in the RTS index, the changes in the main indicators of the Russian social and economic development and the changes in the world financial system indicators are interdependent. The findings of the correlative analysis made of the data that was collected within the period of 2005-2009 demonstrated that there was a persistent interdependency between the state of the Russian stock market and the Russian macroeconomic development indicators and between the indicators found on the financial markets of various countries. The article authors determine what the time lags are where the indicators’ maximal value is observed.
Keywords: stock market, financial market volatility, financial market efficiency, international stock indexes, Russian macroeconomic indicators, measures taken to cope with the crisis
Formation of a Table of Charges based on Forecast Made of the Housing and Utilities Sector Organizations’ Financing Requirements
The author of the article examines the situation in the housing and utilities sector from the technical and financial point of view and describes the changes made to the system of financing within the sector. She examines the methods to be used in order to make forecasts of the sector organizations’ financing requirements and proves that the uncertainty factor should be taken into account when making the forecasts. Due to the shortage of the financial resources available to the organizations within the sector, it is suggested that such a modern financial management instrument as budgeting should be used.
Keywords: housing and utilities sector, forecasts, financing requirements, budgeting
State Financial Control: the Approaches towards the Efficiency Level Assessment
The role the state financial control system plays in the economy becomes more significant during the global economic crisis. The state enforcement measures are seen as a method to be used in order to efficiently manage the public finance sector. The article author examines the approaches that are used in order to assess the state control system operational efficiency level by the Western economists and the methods suggested by the Russian researchers V. Zhukov, S. Openyshev, M. Melnik and Yu. Voronin. The criteria and indicators used as well as the methodology and the theory behind the approaches are analyzed.
Keywords: state financial control, efficiency of the budget funds’ use, efficiency of the state financial supervision system
On Security as an Economic Category
The accident rate growth in the industrial infrastructure facilities is a conspicuous negative trend observed throughout the last decade. The article author examines the key reasons why this happens. According to the author, the main reason for this is the fact that the security regulations have not become an integral part of the profit optimization schemes found on the market. The author states that it is extremely difficult to form the safety criteria and make the market players observe the safety rules at all times. It is unlikely that more strict sanctions would help us resolve the issue as the market players seeking more profit form the safety criteria on their own. If we do not cope with the problem, it would mean that we would not prevent the designers from constructing the accident-prone facilities.
Keywords: accident rate, technical facilities, security and safety, safety criteria, compensation, risks, the value of life
Goodwill and Business Connections as a Contribution into the Operations of a Joint Adventure
The article author dwells on the methods used in accounting when the transactions are made by a joint adventure. The goodwill and the business connections form the contribution into its operations. No provision of the Civil Code prohibits the physical entities from making such contributions. However, no researcher to date has made proper analysis of the issue. It is noteworthy that the partition scheme where the goodwill is taken into account can help overcome the provision where it is stated that it is prohibited for a business organization to issue a deed of gift to another business organization and the taxation terms are quite attractive in this case. Nevertheless, such transactions are deemed to be risky.
Keywords: joint adventure, goodwill, business connections, contribution into the operations of a joint adventure, prohibition to issue a deed of gift
Managerial Accounting Audit as a Tool Used to Improve the Business Operational Practices
The article author dwells on broadening the scope of the financial services rendered by the audit firms to the business entities by adding the managerial accounting-related services to the services list. The author describes the reasons why the managerial accounting is rarely done by the Russian businesses. She gives recommendations as to how one should use the audit methodology when dealing with the factual information analysis. The article author suggests that the probability-based approach be used in order to construct an objectives tree and a decision tree based on the information gathered in written form while performing the audit. The author includes into the article the templates of the forms used to check the managerial accounting procedure correctness and to make plans when going on through the procedure.
Keywords: audit, management, efficiency, managerial accounting, managerial decision
V. Oseledets, I. Oseledets, D. Pospelov
Predictions Made for Two or More Financial Series via the Diagonal Correlations Made to Their Common Past History
The article authors offer an approach to be used when predictions are made of the future stock price provided that there is some data on the stock market price history. Estimates are made of the probability figures in the forecasts made of the dynamics of the stock price formation, and the criterion of quality of the method is the extent to which the estimates are correct. The authors show that if the diagonal (or cross)-correlation-based method is used in order to make the predictions for the two shares’ price formation dynamics in the period of high volatility (that is, in the period of a crisis), the direction in which the change curve goes are correct in the 75% of the total number of cases. However, the limitations of the method are also identified. The forecasts are correct in not more than 50% of all cases in the calm market periods. The method can be easily adjusted to be used to make forecasts for a larger number of shares.
Keywords: financial series, stock price forecast, diagonal correlation
A. Buravlev, N. Serdyukova, V. Serdyukov
Financial Regulation Planning for the Russian High-Technology Sector and its efficiency
The article authors examine the impact the 1998-2000 Russian financial crisis and the 2009 global financial crisis have made upon the Russian economy’s knowledge-based sectors. It is suggested that in order to become competitive, the Russian high-technology sector should use an inter-sectoral adjustment mechanism when building the financing schemes. The work is based upon the analysis performed in the Long-Term Forecast for the Scientific and Technological Development of the Russian Federation, the IMF Annual Report 2009, and the research findings presented by the Institute for the Stock Market Development.
Keywords: knowledge-based sectors of the economy, financial crisis, inter-sectoral adjustment mechanism, financing
E. Ternovskaya, M. Novoseltseva
Commercial Banks’ Loan Policy Formation
The article authors examine the issues related to the formation of an efficient loan policy in the commercial banks. They make their assessment of the Russian banking sector’s loan business-related activities during the financial crisis and note that foreign banks are becoming increasingly proactive in the loan market, and this constitutes a trend. The article authors examine the specifics of the foreign banks’ loan policy formation process. They suggest the measures to be taken to improve the loan process, to make the Russian banks’ loan business efficiency level higher and contribute to the sustainable development of the economy.
Keywords: loan policy, commercial banks, loan portfolio, credit exposure
The Investment Banking Conceptual Framework Interpretation
The article author dwells on the theory of investment and, in particular, on the investment banking — a field that has not been fully examined yet. He suggests his own definition to the term investment banking, gives his own classification of the types of such activities and uses the ―capital circulation mediator‖ criteria when building the classification. His work is based upon the analysis of the Russian and foreign best practices gained in the field of law, the analysis of the research work and of the usual business practices. He also makes suggestions on how the relevant legal base can be improved.
Keywords: investment banking, investment bank, underwriting, investment consulting, M&A consulting
Development of the Stavropol Region Budget Process
The article author examines the results of the budgetary reforms conducted in the Stavropol Region. The budget expenditure management was replaced by the relevant result-oriented management in the course of the Russian budgetary reforms. This is a major achievement made by the Russian regulatory bodies in the period of recession when the amount of collected taxes becomes smaller and the expenditure in the social sphere rises. A new budget system is operational in the regions today. Its efficiency level is higher when it comes to the budget funds use scheme formation and it offers better services.
Keywords: budget, budget reforms, finance, regional policy, Stavropol Region, social and community sector, policies implemented to cope with the crisis
A Role Libraries Play in the Teaching and Learning Process Organized in Postsecondary Schools
The article is meant to mark the 80th anniversary of the Fadeev Yakutsk Economist Training Postsecondary School which is a branch of the Budget and Treasury Academy of the Ministry of Finance of the Russian Federation. The author dwells on the role a library plays in the teaching and learning process designed by a modern postsecondary school. She also gives a brief account of the Yakutsk School library history.
Keywords: education institution library, teaching and learning process, quality of provision, bibliographic resources and tools
The Russian Financial System: the Historic Independence and Unity of the Monetary and the Exchange Systems
The main theme of the article is the history of the Russian financial system. The article author examines several hypotheses of the Russian Ruble origin and proves that the first currency system in the world was based on the use of the silver, and not gold, standard. The researcher dwells on the Russian gold mining history, makes a comparative analysis and suggests a definition for the modern monetary system. It is defined as an absolute unity of relationships that exist in the banking, monetary and financial systems.
Keywords: monetary system, currency system, Hryvna, half a Byzantine litra (pound), thaler, Ruble origin, silver standard, gold standard