Civilizational evolution of financial system progressive development mechanisms

Abstract

The research objective is the study of the existing mechanisms of the contemporary financial system and its markets. The general scientific research, the comparative, technical and economic analysis and the expert assessments methods were applied to solve the research tasks. The research reveals the most topical policy priorities of the financial system and its markets development. The article defined the consolidating functions of state regulation aimed at balance correction including the function of demand and supply adapting. It is the financial system where the financial resources are formed at the micro level and the centralized state funds are formed at the macro level. Thus, the state distributes monetary funds through financial instruments, forming budgets of all levels and extra-budgetary funds. Highlighting the priority of any given macroeconomic and institutional theories, the contemporary financial system is studied as a complex and dynamic mechanism that ensures different interests and determines approaches for tasks solving at each specific historical level. The article generalized the information that determines the classification of the financial system and the progressive development of modern financial markets, identifying their organizational and regulatory principles for the financial system modernization. A multiple excess of the financial market over the scale of the economy real sector was investigated and determined. The reasons for the rapid development of financial circulation have not been completely explored yet: financial markets arise at a certain stage of the market relations development, when the state has the opportunity to play a crucial role in market processes and in the financial system. The development of the financial system and financial markets, their functioning as an independent system on the basis of their own principles is enormously influenced by the state policy. The paper discloses the functions of the financial system in the circulation of monetary resources, which must be sufficientmore than necessary for servicing the needs of commodity production and trade. The article analyzes and reveals the beginning of the financial operations rapid development and the transition to financial-unsecured money that occur not by an accidental circumstance but connected with time and these actionswith cause-and-effect relations as well. Only a sufficient amount of money in circulation can ensure the amount of free money supply that can circulate in financial transactions that are not related directly to the purchase and sale of goods and services. Evolutionary processes provide an opportunity to assert that the financial system and financial markets did not simply originate in the process of market mechanisms evolution but arose solely due to the issuing activity of the state, which in turn finds support in the nature of contemporary money.