Before you understand the financial system of any country and its structure, you need to understand exactly what this term is. The word "economy" may have several not quite similar meanings.
First, the economy is considered the form of monetary relations, which are associated with all subjects of reproduction. Secondly, the term can refer to the totality of all laws, norms, and rules that streamline financial relations in a country and financial activity in general.
Thirdly, this is the internal structure of finance, the unity of their components (links). Moreover, all links in the financial system have their own specifics.
By the nature of the monetary funds that are formed in any financial system, centralized and decentralized finances can be distinguished.
The former are a package uniting all the links of the financial system, forming the correct distribution of funds (budget and extra-budgetary), funds belonging to municipalities. In other words, the links that make up centralized finance include state credit, municipal credit, and the budget system.
Decentralized finance is the sum of the components that take part in the formation and use of funds of individuals and entities that conduct separate business operations. These are the finances of enterprises, corporations, etc. self-financing organizations, the finances of individual entrepreneurs, non-profit structures, and households.
Let us try to briefly characterize all the links in the financial system and consider their features.
The budget system of the Russian Federation is a means that includes the budgets of the Federation, entities, state extra-budgetary funds and local budgets. Its purpose is to solve the main issues of the state as a whole. It is the budget system with its taxes, excise taxes, etc., that is designed to provide cultural, economic, political and social tasks, redistributing GDP accordingly. This redistribution is controlled by special bodies, including the Accounts Chamber, the Tax Service, etc.
Other links in the financial system (in this case we are talking about state and municipal credit) express those relations between the state, its authorities and economic entities that allow the Russian Federation to act as a guarantor, lender or borrower. At the same time, the main tasks of the state loan are financing the budget deficit, supporting priority sectors, and resolving credit policy issues (regional and international).
Today, such links of the financial system of the Russian Federation as incomes of self-financing production and non-production structures are becoming increasingly important. These include:
• Corporations, i.e. non-membership organizations designed to solve specific social or managerial tasks.
• Unitary enterprises that are divided into two categories in the Russian Federation. The former are based on the right of management, the latter on operational management.
Business finance is very important for creating GDP. They are:
• the main component of the funds from which centralized funds are formed;
• a source of financial resources for households;
• a leading factor in consumption and distribution of GDP;
• a base to meet the needs of society.
Finances of non-commercial origin are needed to structure financial resources that are used to implement state tasks: educational, social, etc., not related to making a profit.
Home finance is almost not regulated by the state, and IP finance is the middle link between commercial and home finance.
The financial system and its links are built on the principles of functionality, transparency, plannedness, unity and democratic centralism.