Money and credit - Ivanov V.М.

20.3. Objects and subjects of international credit

The subjects of credit relations are states, banks, international monetary and credit organizations and individual legal entities. International credit is provided at the expense of the state, firms, enterprises, collective loan funds accumulated in international banks and foreign exchange organizations.

The object of international credit is lending capital in monetary and commodity forms.

20.4. Forms and types of international credit

International credit can be interstate on a bilateral and multilateral basis, banking and commercial. For interstate credit is characteristic that the subjects of credit relations are individual states, and the object of redistribution is their national income. Interstate credit can be used to balance payments between different countries, expand commodity turnover, and so on.

International credit is provided in monetary and commodity forms. When granting loans in cash, the object of the loan is international purchasing and payment means. Interstate credit in convertible currency is currently issued and used mainly in non-cash form.

Interstate loans are in the form of an investment loan used to finance capital investments. Due to them, cars, equipment, labor of specialists connected with the construction of the enterprise are paid for, in the products of which the subjects of the credit transaction are interested.

International bank credit develops with the expansion of economic ties between different states. It is characterized by the fact that one of the subjects of credit relations is the bank. Commercial loans mean a deferred payment for the goods sold. They are provided by enterprises, firms when selling export goods on credit. The development of such forms of credit cooperation, such as leasing, compensation deals, also develops. Cooperation on a compensatory basis allows the construction of facilities in the territory of the borrowing country using foreign loans that are repaid at the expense of the export of a part of the output produced at newly established or other enterprises. Credit relations on a compensation basis contribute to the development of long-term foreign economic cooperation and create additional sources of foreign exchange earnings.

There are such types of loan:

• draft (bill of exchange);

deposit certificate - a written certificate of the bank on the deposit of funds, which confirms the right of the depositor to receive a deposit;

bond loans - a method of mobilizing financial resources by issuing bonds in the form of bonds;

Consortium loans - issued by groups of banks that are organized by the largest bank for general credit and other transactions.