Green finance and other financial innovations. Financial innovation

Distinctive feature development of modern international finance is the global nature of the interaction, which is ensured through the introduction of financial innovations. Under financial innovation refers to the emergence of new financial products, technologies or organizational forms business, allowing to reduce the costs and (or) risks of economic agents. Globalization of financial market products means the convergence of price and quality of the same financial product. Thanks to the standardization and flexibility of capital flows, there have been profound changes in financial world. New financial technologies are emerging and taking the form of global financial strategies corporations, global electronic financial networks, global information support system, etc.

A prerequisite for the emergence of modern financial products are modern Information Technology. Innovations on monetary and financial markets accompanied by advances in computer technology. Modern financial systems cannot be imagined without a computer. With its help, trade is carried out, efficient accounting is maintained, settlements are made in a timely manner and transactions are regulated, data is collected in real time, large-scale processing is carried out, and decisions are made taking into account market conditions and market situation management. Computers are used to model the behavior of financial securities and major market indices, evaluate the value of financial instruments and find combinations of these instruments that can provide a return corresponding to the chosen level of risk.

ubiquitous means of communication between foreign banks and exchanges is telex computerized communication. Now the SWIFT computer system is widely known and popular - this is the abbreviation of a Swiss company, which stands for "Society for World in the Intcrbank Financial Telecommunications".

Another important innovation in the organization of international settlements is payment system CLS (Continuous linked settlement), which is international system conversion foreign exchange transactions. This payment system was created by leading dealers foreign exchange market(the so-called "Big Twenty") in 1997 and represents one settlement bank - CLS Bank. Since November 2002, 67 major financial institutions from 17 countries of the world. Initially, the bank serviced settlements in seven leading currencies: US dollar, euro, Japanese yen, British pound sterling, Swiss franc, Canadian and Australian dollars. Later they were joined by the Swedish, Norwegian and Danish krone, Hong Kong, New Zealand and Singapore dollars, as well as the Israeli shekel, South African rand, South Korean won, Mexican peso. According to the Bank for International Settlements, CLS accounts for more than 55% of all international foreign exchange transactions. On average, CLS settles 579,000 FX transactions daily, totaling $3.3 trillion. In 2008, CLS completed over 142 million conversion transactions for the first time in its history, totaling $1 quadrillion.

The classification of some particularly important financial innovations is given in Table. 11.3.

Table 11.3

Classification of financial innovations (but K. Perez)

Venture funding - is a variety money capital, which arose under the influence of the system of subsidizing research work on individual projects and programs. In fact, venture financing can be characterized as a source of long term investment, usually provided for 5–7 years to enterprises in the early stages of their formation, as well as to existing enterprises for their expansion and modernization.

Venture financing has a number of features:

• 1) it is impossible without the principle of "approved risk". This means that the investors of capital agree in advance to the possibility of losing money if the funded enterprise fails in exchange for a high rate of return if it succeeds;
• 2) this type of financing involves long term investment capital, in which the investor has to wait an average of 3 to 5 years to make sure that the project is promising, and from 5 to 10 years to get a return on invested capital;
• 3) risk financing is placed not as a loan, but in the form of a share contribution to the authorized capital of the venture capital. Newly founded enterprises, as a rule, enjoy the legal status of partnerships, and capital investors become partners in them with liability limited by the size of the contribution. Depending on the share of participation, which is negotiated when providing money, risky investors are entitled to appropriate future profits from the funded enterprise;
• 4) a venture entrepreneur, unlike a strategic partner, rarely seeks to seize a controlling stake in the company. Usually this is a block of shares of about 25-40%;
• 5) a high degree of personal interest of investors in the success of the new enterprise. This follows both from the high riskiness of the project and from the status of the co-owner of the venture being established. Therefore, risky investors are often not limited to providing funds, but provide various consulting, management and other services to established ventures.

Corporate bonds are among the financial instruments that ensure the expansion of the use of technological innovations. Corporate bond - This is a security that certifies the loan relationship between its owner (creditor) and the person who issued it (borrower). The latter are joint-stock companies, enterprises and organizations of other organizational and legal forms of ownership. Corporate bonds predominate in the structure of sources of financing for the economy, accounting for more than 70% of all funds raised through the securities market. Their priority is due to the long-term and constancy of property relations. On the market initial placement corporate bonds can be generally divided into three groups of participants: the issuer, the underwriter and the investor.

Issuer is an entity that issues a bonded loan. The purpose of the issue is to attract borrowed funds to replenish working capital(short-term loans) or finance a long-term project such as a plant modernization program (long-term loans). The issuer is interested in raising funds at the lowest interest rate on long term. What is the attractiveness of issuing corporate bonds for the issuer? Unlike the issue of shares, loans by issuing bonds have undeniable advantages. For example, corporate bonds allow, without changing or redistributing property, to provide enterprises with access to the capital market. The cost of placing bonded loans depends on two components: credit history issuer (development of the stock market of securities) and its creditworthiness (stability financial position). The reduction in the cost of borrowing is also the result of the development secondary market bonds and increase investor confidence in the issuer.

Underwriters - this is financial structures providing placement of the issuer's bonds. Underwriting functions are performed by investment companies and banks. Several underwriters forming a consortium may participate in the process of placement of securities. Such a bond loan is called a syndicated loan. The purpose of creating the consortium is to diversify the risks of underwriters in the placement of a bonded loan (the number of potential investors increases due to the involvement of several underwriters with their own client bases in the placement process). Among the group of underwriters, the issuer selects a general manager who coordinates the placement of the issue and with whom the issuer sets the parameters of the upcoming issue (bond type, maturity, interest rate, etc.). The general underwriter usually takes over the functions financial advisor issuer for this issue. Investors end up buying bonds. Corporate bonds are of interest to institutional investors who accumulate funds for a long time. The main volume of investments in corporate bonds today is carried out banking structures, which account for 90-95% of the market. Corporate bonds are purchased by organizations for diversification investment portfolio and as a tool that allows you to get a yield higher than on government securities. For active stock market players ( investment companies) corporate bonds are of little interest due to the low liquidity of the secondary market. The next feature of this type of bond is that the company can create a "redemption fund" that will be used in the redemption process. This means that every year the company postpones a certain amount cash it uses to buy back some of the bonds on open market. One consequence of using this approach (in accordance with the law of supply and demand) is that the lender will be willing to receive a lower interest rate.

At present, the modernization of financial technologies (Internet banking, ATMs) is widespread. Internet banking - the general name of technologies for remote banking service, in which access to accounts and operations on them is provided at any time and from any computer with Internet access. As a rule, Internet banking services include: account statements, provision of information on banking products (deposits, loans, etc.), applications for opening deposits, obtaining loans, bank cards, internal transfers to bank accounts, transfers to accounts in other banks, conversion of funds, payment for services.

Financial instruments for attracting mass investors (ΙΡΟ, mutual funds), financial instruments for refinancing and raising assets (swap, issuing bonds to buy back shares) will be described in more detail in Chapter 12.

Offshore activity is a specific international financial sphere. Yes, in last years one third to one half of the world cash flows passed through offshore centers; they served up to 50% of the world capital movement. According to the US FBI, about $5 trillion is concentrated in the accounts of banks and investment companies registered in 42 offshore centers around the world.

The first offshore companies appeared in the 1960s, when the former colonial states, having gained independence, began to provide tax incentives non-resident companies in order to attract capital. Initially, offshore business was the prerogative of banking, but as international financial relations developed, other offshore structures began to appear - insurance, investment, etc. As a result, in the 1990s. a real boom in offshore business began. Offshore zone (offshore area) - the territory on which the most favored nation monetary and financial regime is established (preferential taxation, free export of profits, soft currency regulations, customs benefits for foreign investors). Plays a significant role for potential client offshore and low threshold authorized capital. It is often only declared, but not actually paid. Offshore income tax is less than 5% or is replaced by a small (up to $ 1,000) contribution that does not depend on the amount of income.

Offshore is also attractive due to its stability. As a rule, in such financial enclaves, the cycle of stability is extended for 10–25 years; the owner of the company can be sure that during this period there will be no unforeseen adverse changes in the political system, legislation and macroeconomic trends in the offshore he has chosen. At the same time, the identities of the company owners are not disclosed, and the registration procedure is simplified as much as possible. True, according to the law, it is possible to disclose the anonymity of investments in the event of criminal prosecution. this person. The fact of ownership is hidden using the services of either nominee directors or shareholders on a trust basis. Companies are often not required to report on accounts, tax returns, external audit. Company accounts can only be verified by the decision of the owners. The only practiced form of reporting for many companies is the annual balance sheet.

Reference. The total number of offshore zones in the world is determined rather conditionally. The process of their emergence and disappearance is relatively dynamic. Today, experts name about 100 stable complex offshore centers where offshore companies traditionally operate. Of the European centers, the most famous are Gibraltar, Liechtenstein, Andorra, Monaco, Cyprus, Malta, and others; in Central America - Panama, Costa Rica, Bermuda, the Virgin Islands, the Cayman Islands, the Bahamas, Barbados, Antigua and Barabuda, as well as the Turke and Cayoks Islands, Aruba, Curacao; on the African continent, the largest offshore zones are Liberia and Mauritius; in the Pacific region - Nauru, Fiji, Western Samoa; in Southeast Asia - Hong Kong (until recently) and the Malaysian island of Labuan; in the Persian Gulf - the Sultanate of Bahrain.

Most active Russian participants For foreign trade activities, such offshore centers as the Isle of Man, Jersey, Guernsey, the Virgin (British) Islands, Delaware (USA), Liechtenstein, Malta, Cyprus, Singapore, and Ireland are used.

At present, the following legal forms offshore activity (jurisdiction): tax havens; countries with a preferential taxation regime; offshore territories.

States that waive or set a fixed fee for company registration (usually no more than $1,000 per year) are called tax havens. They provide offshore status, i.e. certain tax incentives to make the most of the combination of opportunities: geographic location, intellectual capital, etc. With absence natural resources and conditions for the development of industry the most effective way to revitalize business activity and attract foreign capital is the practice of tax incentives. As a rule, these are island states: in Europe - the Isle of Man, Gibraltar (22 thousand companies), the islands of Guernsey, Jersey (Great Britain), Malta, etc.; in Africa - Liberia, Mauritius; in the Pacific basin - Western Samoa, the island of Fiji; in Central America and the Caribbean - Panama (120,000 companies), Costa Rica, the Virgin (British) Islands (20,000 companies), Bermuda, Turke and Cayoks Islands.

In countries with preferential tax treatment (they are also called centers of offshore companies) is also absent currency control, but customs and tax restrictions. It is in these countries that a significant increase in the number of offshore companies has recently been observed. They usually keep a high tax rate for their own companies, which cannot avoid them, and a preferential tax rate for foreign investors to attract them. These countries combine low taxes with a network of exclusion treaties double taxation. For the most part, this group includes the states of continental Europe - the canton of Geneva (Switzerland), Luxembourg, the Netherlands, etc. Very often, benefits are provided to companies with a certain type of activity. For example, in Luxembourg it is beneficial to set up a non-resident holding company. Switzerland seems to be an interesting state in terms of taxation, which is considered a country with high level taxation. However, due to the fact that the cantonal tax rate for some companies is reduced in the canton of Geneva, it is beneficial to establish financial profile companies there. If all over the world financial business is strictly licensed, in Geneva this type of activity does not require special procedures from the founders. Companies established in countries with preferential taxation, are more prestigious and creditworthy than firms in tax havens with a flat tax, but they are also more difficult to manage.

The third group includes administrative-territorial entities in which an offshore regime operates, although they themselves are part of the state, so they can be called offshore territories. Basically, such formations are typical for countries with a federal structure. Offshore territories include the states of Delaware, Wyoming, Nevada in the USA; Kalmykia, the ecological and economic region "Altai" in Russia, etc. Such an offshore jurisdiction is characterized by the fact that it can serve as a tax haven in the case of international business and at the same time allows you to carry out offshore financial and economic operations without going beyond national borders of one country. Indeed, federations are characterized by three levels of taxation: federal, regional and local. As a rule, tax incentives are granted to enterprises that are registered in an offshore territory, but operate and receive income outside of it.

Offshore companies are characterized by the following main features: their owners are foreign legal or individuals(non-residents in relation to the legislation of the country of registration); they do not have the right to carry out industrial and commercial activities in the country of registration. Such companies have tax benefits when conducting foreign exchange, credit and financial activities. Offshore companies are registered in one country, and the subject of their activity is located in other countries. At the same time, all international financial transactions pass through offshore territory.

Any offshore company, regardless of the place of registration, has a strictly defined legal structure. From a legal point of view, offshore companies are most often closed joint-stock companies. The authorized capital varies from $2,000 to $50,000. There is no need for full payment of capital; there is a concept of "partially paid-in capital". In practice, this means that by purchasing two or three dollar shares, such an "owner" can control an offshore company. Each offshore company must have a secretary, which is a specialized secretarial company. Local authorities require that an offshore company have a secretary from local citizens or legal entities who really monitors the current activities of the company. The duties of the secretary include preparing documentation (except for accounting) for local authorities, fulfilling all the conditions of the law to ensure the life of an offshore company, and monitoring the timely payment of annual fees. According to Oftshore Express magazine, there are now almost 3 million offshore companies in the world.

Offshore activity is one of the most controversial forms of international financial relations of private companies. Using the tax minimization mechanism, it essentially balances between legal tax planning tools and criminal evasion of mandatory budget revenues. Today, offshore business has become, unfortunately, a natural practice of keeping taxable profits abroad, laundering illegally earned money. States, trying to protect their interests, establish various restrictions on offshore business. developed countries created tax barriers to export income to tax havens. Such countries are reluctant to sign tax agreements with states that provide income tax incentives. As a result, when announcing the transfer of income to the tax haven, income is taxed in full. A particularly negative attitude towards offshore activities emerged after the September 11, 2001 terrorist attack in the United States. Offshore companies and banks began to be considered by the world community as possible channels for financing terrorist organizations. Therefore, proposals have appeared, if not for the complete liquidation of offshore business, then at least for increasing the transparency (transparency) of offshore companies. Thus, in connection with the opposition of many states, in general, there is a reduction in the scope of offshore activities.

A serious blow to the popularity of offshore business in the world was dealt by debt, financial, budgetary and economic crisis in the Republic of Cyprus, which in March 2013 led to paralysis banking system country and plunged its economy into a pre-default state.

Reference. Cyprus joined the Eurozone on January 1, 2008. Due to the deterioration macro economic indicators In the world, a gradual deterioration in the performance of the economy of the Greek part of the island began, which coincided with the deterioration of economic performance in other countries of the periphery of the euro area. Wherein bank interest on deposits in Cyprus (+4.45%) are several times higher than interest rates in the same currency in Germany (+1.5%); about 55% of deposits in the system contain an amount exceeding 100,000 euros, about a third of all foreign deposits- Russian. These high interest were paid for the most part at the expense of new investors, i.e. took place financial pyramid. These and other problems brought the republic's economy closer to collapse, and the country faced the need to receive financial assistance from international lenders.

At the next meeting of the Eurogroup, it was decided to introduce a one-time tax on all bank deposits in the country as mandatory condition for help. By this time, the share of capital contained in the banking sector of the Republic of Cyprus had reached 835% of the Cypriot GDP. Almost a third of all deposits in Cypriot banks belonged to foreigners. The final anti-crisis plan, after negotiations with the leading EU countries, includes an unprecedented measure when deposits in excess of 100,000 euros will be taxed. At the same time, the losses of large depositors will differ depending on the bank in which their deposits were placed. Besides, largest bank country - Bank of Cyprus (Bank of Cyprus) will be restructured, and the second largest bank in the country - Cyprus Popular Bank (Cyprus National Bank operating under the brand name Laiki Bank) has been liquidated. The losses of its depositors, as well as the size of layoffs, have not yet been determined. Although the initial total national anti-crisis plan was 5.8 billion euros, it is expected that, taking into account the proceeds from the increase in corporate income tax from 10 to 12.5%, as well as from the introduction of a tax on income from interest on bank deposits, he will be able to achieve the required value of 7 billion euros as a result. Experts consider restrictions on capital movements as a de facto exit from the eurozone, and bank holidays and the impossibility of withdrawing deposits as a de facto default.

Source . URL: ni.wikipedia.org/wiki.

As well as in the definition of the concept of "financial innovation" there is no consensus on their classification. On the this moment there are more than thirty classifications of financial innovations.

It is believed that the most complete classification of banking innovations is presented by AI Prigogine. Therefore, on its basis, with the help of summarizing the research of other specialists in this field, we will try to systematize the entire range of banking innovations.

First of all, banking innovations can be classified according to the reasons for their inception. In this case, financial innovations are divided into reactive and strategic ones.

Reactive innovations are associated with the bank's defensive strategy, which is aimed at the survival of banking organizations.

Strategic innovations serve to gain competitive advantage in the long term. The disadvantage of this type of innovation is the need for a larger amount of investment, so they are available only to large banks.

Depending on the place in the bank's activity, product innovations are distinguished, or they are also called basic innovations and providing innovations. Product innovations are related to the range of banking products and services provided. In turn, product innovations are divided into actual product innovations and market innovations.

Actually product innovations are directly related to the creation of new banking products and services and their promotion to the market. Market innovations imply the presence of a set of measures that allow the implementation of already created products in new markets.

Supporting innovations are associated with the transformation of the bank's management structure, changes in the process of providing services and selling banking products, that is, they play a secondary role in the bank's activities.

Based on the depth of the changes introduced, that is, according to the innovative potential, financial innovations are distinguished by the following types:

• - radical innovations, which are also called basic. They are associated with the use of completely new types of banking products and services;
• - combinatorial innovations are based on a combination of various existing elements, which are then presented on the market as a single product;
• - modification innovations are aimed at partial improvement of already used banking products and services to extend their life cycle.

In terms of impact, innovations are divided into point and system ones. Point innovations are associated with improvement in any particular area of ​​​​work and, as a rule, do not require large expenditures, and also do not have a strong impact on manufacturing process generally. Systemic innovations, as opposed to point innovations, are designed to change the entire structure of industrial relations.

Another classification feature of banking innovations is the degree of novelty, according to which they distinguish:

• - newly created innovations or they are also called innovations built on new discoveries. These innovations are quite capital intensive and are associated with dramatic changes;
• - innovations built on already created products are the most widespread compared to newly created innovations due to the relatively low cost of development and ease of implementation. They are used to improve the quality and efficiency of existing products and services.

According to the nature of the needs satisfied, there are:

• - innovations related to the satisfaction of existing needs, which make up the bulk of the innovations used by banks;
• - innovations aimed at creating new needs are developed and implemented by banks relatively rarely, which is due to the need for the organization to have a certain creative and investment potential, which should be supported by the results of detailed marketing and sociological research.

According to the time of appearance, banking innovations are divided into:

• - innovation-leaders, which are understood as innovations implemented by banks independently. These innovations are characterized by absolute novelty, which, if successfully implemented, will allow the bank to gain competitive advantages over other banks;
• - successor innovations, that is, innovations that are carried out by banks with a certain time lag after the introduction of the previous group of innovations in order to maintain existing competitive advantages.

Thus, the classification of banking innovations described above is not complete enough, but it allows us to identify some patterns in the development of innovative activities of banking organizations. Since the predominance of any type of innovation in the activities of the bank determines the type of innovative strategy of the organization. And the classification of financial innovations makes it possible to determine economic and managerial mechanisms.

FINANCIAL INNOVATION

Introduction………………………………………………………………………3

Financial innovations: essence and preconditions………………....5

1. Prerequisites for the emergence of financial innovations……….5

   The concept of financial innovation………………………………8

   Financial innovations as a market commodity………………. fourteen

The impact of financial innovations on the country's economy………….. 18

1. Economic analysis of financial innovations…………… 18

2.2. The impact of financial innovations on the country's economy ...... 20

Conclusion……………………………………………………………… 21

References……………………………………………………… 23

Application……………………………………………………………… 24

Introduction

Financial innovations – new financial products, technologies and institutions – have had an increasing impact on economic activity around the world in recent years.

In recent years, Russia has seen a sharp increase in attention to everything related to finance in the broad sense of the term: the financial activities of enterprises and joint-stock companies, securities, functioning of banks, stock exchanges, insurance companies, pension funds, etc. There is a growing interest in obtaining economic and, especially, financial and banking education. The work of translating and publishing foreign financial literature in Russian has intensified sharply. There are also works of domestic authors in the area under consideration.

Despite the significantly increased flow of financial information (in print and electronic form) for the Russian user, it is much less than the “ocean” of world economic information that is available to specialists, teachers and students in foreign countries. But one important area is completely underrepresented. This area is financial innovation.

Therefore, financial innovations are a hot topic today, which requires detailed study, development, analysis and further application in practice in order to improve the financial sector of the economy.

The objective of the abstract is to consider financial innovations as an independent economic category, acting on financial market with all its features.

Objectives of the work: firstly, to reveal the concept of financial innovations, their essence and prerequisites, and secondly, to provide an economic analysis of financial innovations, to identify the impact of the phenomenon under consideration on the country's economy.

The object of research in the work are financial innovations. The subject of the research is the market of financial innovations as an independent sector of the general financial market.

The abstract contains two chapters: financial innovations: the essence and prerequisites and the impact of financial innovations on the country's economy. The first chapter presents the main points and concepts that characterize this phenomenon. The second chapter reveals the consequences of innovation, provides an economic analysis of innovation.

The content of this work is both theoretical and practical. Examples serve as a practical basis, which allow you to more clearly understand the phenomenon under consideration. The theoretical basis is represented by educational and periodical literature, as well as information from the Internet. The appendix includes tables and diagrams that allow you to clearly trace the essence and importance of financial innovation.

Financial innovations: essence and background

Prerequisites for the emergence of financial innovations

Financial innovation is called new financial instruments (new methods of working in the financial market).

25 years ago a large number of the financial instruments now taken for granted simply did not exist. For example, current accounts (such as NOW=negotiable order of withdrawal, interest-bearing current account, and bank transfer) were not available until 1972. Today, the number of financial instruments available to people with various amounts to invest has increased dramatically. The number of new financial institutions has also increased.

An example is the situation that developed during the 1979 crisis in the United States; which was largely due to the advent of innovation. It was offered by mutual funds, which themselves were a relatively new financial institution. They equated the share to one dollar, thereby allowing to invest in any amount (other securities could only be invested in multiples of the face value). Mutual funds also offered to issue credit cards. Of course, all this was extremely tempting, and could not but cause a large influx of customers. As a result - the rapid development of mutual funds. This led to a distortion of the financial market (nobody made deposits in Sberbank) and a terrible financial crisis (savings and loan associations), which lasted 4 years. To eliminate it, a special association was created and even the segmentation of the banking sector was canceled. One of the curative measures was also the creation of NOW.

On the current account, the interest was equal to zero, but it was possible to issue a plastic card. In parallel and interconnected with it, a r / s NOW was started for a certain amount. Thus, when opening an account, the client received a card with the ability to pay for it; at the same time forming a negative balance on the current account. Instantly, the required amount was transferred from NOW and restored the zero balance. This is how the banks got their customers back, actually offering the same services as mutual funds. Eventually segmentation was reintroduced in 1986.

What explains these revolutionary changes in the financial system and the spread of new financial products that have become available to consumers?

As in other sectors of the economy, the main goal of the financial industry is to make a profit by selling its products. If, for example, a soap company sees a market need for laundry detergent; then it will develop this product to meet that need. Also, financial institutions are developing new products, both for their own purposes and for their clients. Innovation in this sector of the economy is mainly driven by the same factors as in other industries.

But we must not forget another important reason for the emergence of new financial instruments: the desire to avoid stricter restrictions than those faced by firms from other sectors of the economy.

For example credit cards Let's consider the main factors influencing the development of financial innovations.

Technology is the most important factor. The use of credit cards became possible only as a result of the creation of telephone and computer networks, as well as other, more complex telecommunications systems, technical equipment and software for information processing. However, for credit cards to become an important part of modern financial system Financial services firms constantly on the lookout for new profit opportunities had to be prepared to take advantage of this advanced technology. Households and firms had to be ready to purchase these cards.

Quite often in the history of innovation, the firm that pioneers the development of some potentially cost-effective idea does not benefit the most from it. This is also true for credit cards. The first company to offer the use of credit cards for international travel was Diners Club, founded just after the end of World War II. The firm's success prompted two other companies, American Express and Carte Blanche, to offer similar credit card programs.

Companies offering services for the use of credit cards (usually a certain percentage of the purchase price), as well as in the form of interest that is paid for the use of credit by the owners of these cards (according to the balance on the account). The largest expenses of such firms are transaction costs, losses due to the theft of cards and the inability of their owners to repay their obligations.

When in the 50s commercial banks first tried credit cards, they found that due to their too high operating costs, they could not compete with firms providing such services. However, in the late 60s, these costs were significantly reduced due to the development of computer technology, and banks could already seriously compete with such firms. Today, the leaders in the market for services using credit cards are two large banking systems: Visa and Master Card, while the share of Diners Club and Carte Blanche has significantly decreased.

The current need for innovation is caused by the presence of a crisis in an economic or other process and the need to immediately eliminate this crisis through innovation.

Such an innovation is crisis innovation. The main feature that determines crisis innovation is the solution to the problem of selling a product (work, service) due to a drop in demand for this product and a decrease in the volume of its sale, as well as the solution of a more complex problem - the problem of the survival of an economic entity in the market in conditions of fierce competition. Crisis innovation is aimed at eliminating the organizational, production, economic or financial crisis of a given economic entity.

A strategic need is a need for innovation for the future. It is caused by long-term forecasts of economic activity, for example, forecasts of losses in the competitiveness of goods, a decline in the image of an economic entity, its possible bankruptcy, etc. The goal of innovation here is to increase the competitiveness of the product and the entire economic entity in the future. Such innovation is development innovation.

The classification of innovations is shown in fig. 1. (see appendix). The classification scheme of innovations includes the type and form of innovation.

The type of innovation is a set of individual innovations, brought together into a single group according to certain signs (signs), which make it possible to distinguish this group of innovations from other groups. For example, in innovations identified by target, the types of innovations are crisis innovation and development innovation; in innovations highlighted by outward sign, the types of innovation are product and operation, etc.

The type of innovation includes different forms of innovation. The form of innovation is a group of innovations united by a single way of existence or a single essence of any innovation. This is a new technique, a new product, a new insurance product, a new tourist product (tour, cruise, tourist route, etc.), a new production technology, etc.

For example, in 1997, Petrovsky Bank (St. Petersburg), together with the St. Petersburg branch of the Pension Fund, the City Center for the Appointment and Payment of Pensions and Benefits, and the Federal Postal Service Administration, introduced the new kind credit, the so-called microcredit. This microcredit is issued to a pensioner for a period until the next accrual of a pension or allowance at a fairly low interest rate.

What is the essence of financial innovation?

1.2. The concept of financial innovation

In the general system of innovations, one can single out financial innovation, i.e. innovation that operates in the financial sector. Financial innovation, like any other innovation, is divided into crisis innovation and development innovation; for a new financial product and a new financial transaction (see the innovation classification scheme shown in Fig. 1 in the appendix).

1. Mandatory sale of a new financial product in the market of financial innovations.

2. Compulsory implementation of a financial transaction on the market or within an economic entity.

3. Functional dependence of financial innovation on time.

Innovative activity in the Russian financial market has a huge untapped potential. What is a daily practice in the West, in Russia has yet to be introduced and developed. At the same time, Russia does not need to invent and create new innovative financial instruments, since international practice is rich in such developments that have been developed and improved over the years and have proven their effectiveness. In other words, Russian business entities have a set of tools and the ability to choose development paths, the adaptation of which to Russian conditions can bring undoubted benefits to the domestic economy.

Financial innovation - the end result of innovative activity in the financial sector, implemented in the form of a new financial product or operation, providing a more efficient reallocation of financial resources, profitability, risks, liquidity and information in order to extract additional profit from such reallocation, while not yet widely used in a particular market.

• obligatory sale of a new financial product in the market of financial innovations;
• mandatory implementation financial transaction in the market or within an economic entity;
• functional dependence of financial innovation on time;
• features of the financial product itself, which are expressed in the presence of a single and mass demand, in the functioning of a limited and unlimited product, in the existence of a product in the form of property and in the form of property rights.

New financial products there are:

• mass - products without a pronounced individuality, without special characteristic features, differing only in the types of products or financial assets and issued for investors and ordinary citizens;
• single - individual products that have characteristic, unique features that distinguish them from other products. They have a clearly defined circle of their customers, therefore they are produced based on specific consumers (investors);
• limited - shares, bonds, types of credit agreements, real estate, etc. - products, the volume (quantity) of the issue of which is strictly quota and is established when the product is released under the influence of many factors: the amount of the authorized capital of an economic entity, customer demand, the availability of a unit of the product itself ( real estate objects);
• unlimited - coins from precious metals, plastic cards, bank accounts, insurance certificates, pension policies - products, the volume (quantity) of the issue of which is not limited by quotas. These products are produced with a possible potential buyer in mind. The number of buyers has not been determined. Therefore, the volume of release of unlimited financial products is not limited by the rules and conditions, except for the factor of consumer demand.

New financial products may exist in the form of:

• property is a thing material object property rights, such as money, measured gold bars, coins, precious stones, securities, land;
• property rights - the right to own, dispose of and use certain property. A financial product in the form of property rights includes documents - an agreement bank account, loan agreement, pension policy, etc.

financial transaction(from Latin operatio - action) - a procedure of actions aimed at solving a specific problem of financial management. Financial transactions, as actions, are intangible and cannot be touched like a thing, and therefore cannot be sold at a fixed price.

To sell a financial transaction, it must be materialized in the form of a thing. The form of materialization of a financial transaction are instructions, rules, guidelines, formulas, graphs, i.e. some specific document, which is a financial product, and therefore an object of sale and purchase in the financial market.

The emergence of financial innovation does not occur by itself, but due to many reasons:

• 1) inconstancy interest rates and inflation rates, which have fluctuated significantly over recent decades, both nominal and real. To reduce the risks associated with these fluctuations, new financial products are being created;
• 2) regulatory changes. Since the early 1970s rapidly deregulating the market financial services. Limits that previously limited the actions of various financial institutions, canceled, and the competition arena has changed dramatically;
• 3) changes in the field of taxation. If earlier such changes occurred infrequently, now changes in tax legislation happen almost every year. Because they affect financial performance, new financial decisions and actions are required in response to changes in tax laws;
• 4) rapid development of information and computer technologies. Active informatization and computerization financial sphere entailed a continuous expansion of the scope of financial services and a decrease in the cost of transaction costs;
• 5) changes in the business cycle. During times of prosperity, there are more reasons to introduce new financial products and processes than during times of recession.

Financial products of an innovative nature are classified according to a number of criteria.

Depending on the underlying asset new financial products are divided into currency, index, stock and interest.

Depending on the transaction mechanism financial instruments are classified into exchange-traded, which are strictly standardized and subject to strict exchange rules, and over-the-counter, in which contract positions are not standardized and market operators can change them as flexibly as possible, taking into account the objectives of a particular transaction.

By structural criterion distinguish between simple and complex financial products. Simple financial products include instruments such as options, futures, swaps, securities on securitized assets and depositary receipts. Complex financial products include all possible combinations of several derivatives, instruments that combine one or more derivatives with financial assets, as well as derivatives, the underlying asset of which is another derivative. Such products are often the result of financial engineering, which can be described as the process of creating financial contracts with non-standard cash flows to solve specific FM problems.

The majority of financial innovations belong to the group of derivative financial instruments and are initially distributed in international markets, only later moving to national ones. The emergence and spread of financial innovations in national markets hinder the restrictions and regulation of the work of market participants, put forward by government regulators. International markets, free from such regulation, become "incubators" of financial innovations, which, after the formation of the relevant markets, the development of working practices on them and the emergence of contract standards, can be transferred to national markets.

FINANCIAL INNOVATION

FINANCIAL INNOVATION

methods used by firms to enter into transactions with new types of financial assets or in the form of new transactions with existing assets, allowing more efficient use of financial resources companies.

Raizberg B.A., Lozovsky L.Sh., Starodubtseva E.B.. Modern economic dictionary. - 2nd ed., corrected. Moscow: INFRA-M. 479 p.. 1999 .

Economic dictionary. 2000 .

See what "FINANCIAL INNOVATIONS" is in other dictionaries:

Financial innovation- FINANCIAL INNOVATION Development of new financial products and services by financial institutions, such as electronic system payments, direct debit, credit card settlements, etc. Financial innovation complements traditional methods payment... ... Dictionary-reference book on economics

Techniques applied to make transactions with new types of financial assets or in the form of new transactions with existing assets, which allows for more efficient use of financial resources of companies ...

financial innovation- the methods used by firms to conduct transactions with new types of financial assets or in the form of new transactions with existing assets, which makes it possible to use the financial resources of companies more efficiently ... Dictionary of economic terms

- (see FINANCIAL INNOVATION) ... Encyclopedic Dictionary of Economics and Law

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- (financial innovation) Changes taking place in financial institutions, financial instruments or business practices in the financial services industry. All business practices now commonplace, including the use of checks, cash and credit ... ... Economic dictionary

FINANCE- (finances) the totality of all funds, the system economic relations arising in the process of creation and use of centralized and decentralized funds of public funds. Scope of use F .. their ... ... Power. Politics. public service. Dictionary

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Books

• Innovations in Russia. System-Institutional Analysis, S. I. Agabekov, D. I. Kokurin, K. N. Nazin. For modern Russia the issue of increasing innovation activity is a question of the country's place on the world stage in the next 20-25 years. Moreover, it is no less acute than 10-15 years ago, ...
• Problem innovation. Human risks. Economic, social and ethical aspects, A. E. Varshavsky. The monograph, based on an interdisciplinary approach, considers innovations created in the context of the complication of new knowledge in order to make changes in human life and society.…