Home  Journals  Digest Finance  4(232) - 2014 October-December

A new understanding of the functioning of the credit channel and its impact on economic growth

Available online: 28 November 2014

Subject Heading: ISSUES ON ECONOMICS

JEL Classification: 

Pages: 24-31

The article points out that the extension of the crediting channel in the modern conditions makes actual the issue of the control of fluctuations of economic conditions in the country. The study of cyclic economy development in terms of increasing the pace of the consumer crediting forms allows expanding the understanding of the mechanisms that influence the economic development of the country. The aim of the research was the formation of the theoretical understanding of the impact of the credit channel on economic growth in the country. The authors considered the following subjects: determination of the nature of the impact of consumer loan products on the welfare of economic entities of the country; disclosure of the nature and composition of the risk arising in the economic system as an extension of the credit processes; identification of the role of financial intermediation in the aspect of conflict of interests between the various stakeholders and the regulator in the capacity of an agency of the State economic policy. The paper carries out a theoretical analysis of the lending process and its impact on the economic development of economic entities. The authors put forward a hypothesis of the possibility of the negative impact of the consumer loan products on the country's economic growth and discuss the formation of a new view on the understanding of the economic mechanism of the credit channel and its role in discovering the nature of the relationship between the behavior of borrowers of credit resources and cyclical fluctuations of economic entities. The authors justify the existence of a deterrent and pro-cyclical nature of the lending property in anticipation of future consumption, which creates the destabilizing effect on the development of the national economy. The article considers that the enhancing of the role of consumer credit, along with the economic slowdown at certain moment, pose some risks in promoting the economic growth and management of the system of financial intermediation in the country. The authors infer that in the environment of the current imbalance of the national economy, the financial market, on the basis of the accumulated and redistributed interests of the subjects of the credit process, is able to become the economic policy conductor of the State, which is aimed at the long-term and sustainable development.

Keywords: anticipation, future, consumption, economic growth, credit granting, financial intermediation, financial market

References:

1. Lavrushin O.I. Vzaimodeistvie denezhno-kreditnoi i finansovoi politiki [Interaction of monetary and financial policies]. Finansy i kredit – Finance and credit, 2006, no. 1.
2. Rodin D.Ya. Denezhno-kreditnaya politika: teoriya i praktika. Razvitie denezhno-kreditnykh otnoshenii v usloviyakh transformatsii bankovskoi sistemy [Monetary policy: theory and practice. The development of monetary and credit relations under the conditions of transformation of the banking system]. Saarbrücken, Germany, LAP LAMBERT Academic Publishing, 2014, 133 p.
3. Rodin D.Ya., Samoilenko M.P. Sovremennye problemy realizatsii denezhno-kreditnoi politiki v usloviyakh finansovoi globalizatsii [Modern problems of the monetary policy implementation under financial globalization]. Finansovaya analitika: problemy i resheniya – Financial analytics: science and experience, 2014, no. 8, pp. 2–10.
4. Soros G. Alkhimiya finansov [The Alchemy of Finance]. Moscow, Dialektika Publ., 2010, 352 p.

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ISSN 2311-9438 (Online)
ISSN 2073-8005 (Print)

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