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Theoretical fundamentals of the credit system of Ukraine

Author

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  • Volodymyr Zakharchenko

Abstract

The article shows that in order to create a fundamentally new in structure and content of the credit system of Ukraine it is necessary to use practically oriented provisions of the basic theories of credit - naturalistic and capital-creating. Accordingly, the purpose of the article is to highlight those provisions of credit theories that in the current conditions can form a theoretical basis for the successful implementation of credit reform in Ukraine. It is noted that within the framework of naturalistic theory the following provisions are of practical importance: classical political economy - loan interest in the context of its impact on investment dynamics and inflation; banking school - the feasibility of "throwing" into the stagnant economy of additional investment money; neoclassics - the danger of separation of the financial sector of the economy from the real and the importance of strengthening the deposit base of banks. The provisions of the Marxist theory of credit, which occupies an intermediate position between naturalistic and capitalist theories, are important in the context of creating a full-fledged securities market in Ukraine and the formation of financial-industrial groups. It is emphasized that within the framework of capital-creating theory the following provisions are constructive: "Lo system" - control by the central bank of the issue of credit money; G. McLeod's theory of bank credit - the role of banks in the national economy; Manchester School of Political Economy - the transfer of capital from less profitable industries to more profitable; J. Schumpeter's theories of economic development - the role of credit in financing innovation; M. Tugan-Baranovsky's theories of market conditions - accumulation of financial capital at different stages of the economic cycle; L. Ghana's theory of conjuncture - its maintenance on the basis of credit expansion; A. Pigou's theory of industrial cycles - the distribution of capital between industries on the basis of investment risks; Keynesian theory - credit expansion of the state in times of crisis and the fight against speculation in the financial market; theories of portfolio infestations - their diversification and investment guarantee. The article concludes that although scientists differently determine the degree of influence of the financial market on economic development in Ukraine, it should be transformed in such a way as to subordinate the tasks of development of the real sector of the economy, including neo-industrialization

Suggested Citation

  • Volodymyr Zakharchenko, 2021. "Theoretical fundamentals of the credit system of Ukraine," E-Forum Working Papers, Economic Forum, vol. 11(1), pages 166-175, January.
    • Handle: RePEc:cuc:eforum:v:11:y:2021:i:1:p:166-175
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    1. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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