Financial relations /3.Economic Sciences

Rochvak O.A.

Donetsk National University of Economics and Trade named after Mykhailo Tugan-Baranovsky,Ukraine

Financial mechanism

To implement the financial policies of its successful implement used financing mechanism. It is a collection of ways to organize a financial relationship used by society in order to ensure favorable conditions for economic and social development. Financial mechanism includes types, forms and methods of financial relations, ways of quantification.

 The structure of the financial mechanism is rather complex. It includes various elements of the corresponding variety of financial relations. The state represented by its executive and legislative bodies on the basis of a careful study of the economic laws, the laws of development finance, problems of economic and financial policy establishes methods for the distribution of social product, national income, the form of cash savings, provides methods of payment determines the principles and directions for use of public financial resources, etc. For efficient use of finances is very important implementation planning and forecasting, normative design of organizations used methods of financial relations (taxes, spending, etc.), monitoring the correct application of different types, forms and methods of financial relations.

Thus, the main links (elements) of the financial mechanism are:

- Financial planning and forecasting;

- Financial performance, standards and limits;

- Financial management;

- Financial instruments and incentives;

- Financial control.

Depending on the characteristics of individual units of the social economy and based on the extraction areas and parts of the financial mechanism of financial relations is divided into the financial mechanism of enterprises and economic organizations, the insurance mechanism and the mechanism of functioning of public finances. In turn, each of these areas includes the individual structural units. For example, the mechanism of public finance is divided into the mechanics of the budget and extrabudgetary funds. In accordance with the territorial division can be identified financial mechanism of the state and local governments.

When considering the financial mechanism in terms of its impact on social reproduction are allocated to functional units: the mobilization of resources, funding, incentives, etc.

Each sphere and a separate section of the financial mechanism are part of a whole.They are interrelated and interdependent. However, the scope and units operate relatively independently, which necessitates constant matching components of the financial mechanism. Internal coherence of composite (structural and functional) elements of the financial mechanism is essential to its effectiveness.
Combining elements of the financial mechanism - the shapes, forms, methods of organization of financial relations constitutes a "financial mechanism design," which is set in motion by establishing quantitative parameters of each of its elements, iedetermination of rates and rules of withdrawal, the amount of funds, expenditure, etc.

The impact of the financial mechanism and its individual elements on the state economy, social sphere can be both quantitative and qualitative. The quantitative impact is reflected in what level of financial resources mobilized by the state and at the level of individual territories, industries, business entities, and what proportion shall be established in the allocation of financial resources between the spheres and the functioning of the financial system.

By varying the volume of financial resources mobilized at the macro level, changes in the magnitude of tax revenue at different levels of growth funding for priority industries governed by economic development and activity of individual subjects.The qualitative effects are associated with the use of such elements of the financial mechanism, which are challenging the sanctions or nature. For example, tax rates, through manipulation of which shall promote the development of certain industries, sectors of the economy (by increasing and decreasing) the establishment of tax incentives.

Poor state law hinders economic initiative, inhibits social development. The differences in the legal regulation costs turn in the economy, the negative social and moral consequences. Shaping the financial mechanism, the state seek to ensure its full compliance with the most financial policies of a given period that completeness is the key to realizing its goals and objectives. This maintains a constant striving for the most complete alignment of the financial mechanism and its individual elements of personal and collective interests, which is the key to the effectiveness of the financial mechanism.

From the above it can be concluded that the financial mechanism - a set of forms and methods, tools and instruments of formation and use of funds of financial resources to ensure the diverse needs of the state, businesses and residents.
The financial mechanism is of particular importance in the implementation of financial policies of the state. Modern financial mechanism would not only create a real financial base to ensure the economic independence of the state, but also to provide economic regulation in the functioning of the market and mixed economy.Development of new forms of financial relations entails more complex financial mechanism.