Government borrowings appear at a certain stage of development the economic system. Governments used loans many centuries ago because there are often occurred situations when borrowings were the only way to attract additional financial resources. The preconditions for government loans from the position of creditors are also important. These, in particular, include: the availability of subjects that have the temporarily available funds; investor confidence in the state, that stimulating their interest in buying government debt securities; state’s ability to repay its obligations and so on. Thus, the article deals with the basic prerequisites of the government securities market and its function at different stages of develop-ment of economic relations. So, it was found, that the main functions of local borrowing in XIV-XX centuries include the following: fiscal, public debt management, improved economic situation in some areas and repayment of previously issued loans. In modern conditions the functions of government securities have expanded and include: regulation of the money market and stock market, smoothing unevenness of funds flow to the budget, funding various pro-grams, support the liquidity of financial institutions. The author also highlights that objective necessity of using government borrowing associated with the presence of contradictions between the existing needs of society and the state’s capacity to satisfy them within existing financial re-sources. And in such situations government securities are a means of mobilizing additional financial resources to the state budget.
Keywords: public credit, government securities, the budget deficit, open market operations, mobilization of financial resources.

DOI: http://dx.doi.org/10.17721/1728-2667.2015/171-6/10

References

1. V.D.Bazilevich, V.M. Shelud’ko, N.V. Kovtun (2011), Tsіnnі paperi: pіdruchnik [Securities: tutorial], Znannya, Kyiv, Ukraine.

2. Fedosov V. M., Jurіj S. І. (2010), Teorіja fіnansіv: Pіdruchnik [Theory of Finance: Handbook], Centr uchbovoї lіteraturi, Kyiv, Ukraine.

3. Ljutij І.O., Grishhenko T.V., Ljubkіna O.V., Moshens’kij S.Z. (2008), Rinok borgovih cіnnih paperіv v Ukraїnі: superechnostі ta tendencії rozvitku: Monografі ja [Debt securities market in Ukraine: contradictions and trends: Monograph], Centr uchbovoї lі teraturi, Kyiv, Ukraine.
4. Kudrjashov V. P. (2008), Kurs fіnansіv: Navch. posіb. [The course of Finance: Tutorial], Znannja, Kyiv, Ukraine.

5. Vakhnenko T. (2000), Derzhavnyi borh Ukrainy ta yoho ekonomichni naslidky [The national debt of Ukraine and its economic consequences], NAN Ukrainy. In-t ekon. prohnozuvannia, Kyiv, Ukraine.

6. Oparіn V. M. (2007), Fіnansi (Zagal’na teorіya): Navch. Pos іbnik [Finance (General Theory): Teach. guide],KNEU, Kyiv, Ukraine.
7. Pruts’ka O.O., Siomchenkov O.A., Garbar Zh.V., Gubanova L.І., Rudenko V.V. (2010), Upravlіnnya derzhavnim bor-gom: Navch. posіb. [Public Debt Management: Training. guidances], Centr uchbovoї lіteraturi, Kyiv, Ukraine.

8. Lysiak, L. V. (2011), “Household incomes of Ukraine as a potential source of local borrowing” [Dokhody domashnikh hospodarstv Ukrainy iak potentsijne dzherelo vnutrishnikh derzhavnykh zapozychen ], Naukovi pratsi Poltavs’koi derzhavnoi ahrarnoi akademii. Seriia: Ekonomichni nauky , Vol. 2, Tom 3, pp. 11-17.
9. Marsilio C. (2013), “Genoese Finance, 1348–1700”. In: Gerard Caprio (ed.) Handbook of Key Global Financial Mar-kets, Institutions, and Infrastructure, Vol. 1, pp. 123-132. Oxford: Elsevier Inc.

10. Krinichanskij K. V. (2003), Genezis jekonomicheskih institutov: korporacii, professional’nye uchastniki finansovogo rynka: Srednevekovaja Evropa – sovremennaja Rossija [The genesis of economic institutions: corporations, professional participants of the financial market: Medieval Europe – contemporary Russia.], Cheljab. gos. un-t, Cheljabinsk, Russia.
11. Pezzolo L. (2013), “Venetian Finance, 1400–1797”. In: Gerard Caprio (ed.) Handbook of Key Global Financial Mar-kets, Institutions, and Infrastructure, Vol. 1, pp. 301-310. Oxford: Elsevier Inc.
12. Zombart V. (2008), Sobranie sochinenij v 3 tomah. Tom 3. Issledovanija po istorii razvitija sovremennogo kapitalizma

[Works in 3 volumes. Volume 3. Research on the history of modern capitalism], Vladimir Dal’, Saint Petersburg, Russia.

13. Kameron R. (2001), Kratkaja ekonomicheskaja istorija mira. Ot paleolita do nashih dnej [Brief Economic History of the World. From the Paleolithic to the present day], Rosspjen, Moscow, Russia.
14. Baash Je. (1949), Istorija jekonomicheskogo razvitija Gollandii v XVI – XVIII vekah: per. s nem [The history of economic development in the Netherlands in XVI – XVIII centuries: trans. from German], Izd-vo inostrannoj literatury, Moscow, Russia.
15. Nersesov N. O. (2000), Izbrannye trudy po predstavitel’stvu i cennym bumagam v grazhdanskom prave [Selected Works on representation and securities in civil law], Statut, Moscow, Russia.

16. Krinichanskij K.V. (2008), “Genesis and evolution of institutions of public and private bonds” [Genezis i jevoljucija in-stitutov gosudarstvennyh i chastnyh obligacionnyh zajmov], Zhurnal jekonomicheskoj teorii, Vol. 2, pp. 67–83.
17. Strahov V. V. (2008), “Domestic government borrowing in the USSR the late 1920s – 1930s” [Vnutrennie gosu-darstvennye zajmy v SSSR konca 1920-h – 1930-e gody], Vestnik Rjazanskogo gosudarstvennogo universiteta imeni S.A. Esenina. Vol. 2, pp. 59-79.
18. Borrowings of the state. Great Soviet Encyclopedia (1969-1978), available at: http://dic.academic.ru/dic.nsf/bse/ 87779/Zajmy#sel=
19. Bazilevich V.D. (2005), Makroekonomіka: Pіdruchnik [Macroeconomics: Textbook], 2nd ed., Znannja, Kyiv, Ukraine.

20. The official website of the Ministry of Finance of Ukraine (2015), available at: http://www.minfin.gov.ua/control/ uk/publish/archive/main?cat_id=400356
21. Kyrychenko O., Belousova I., Kudryts’kyj V. “Government securities in context of development of debt market” [Derzhavni tsinni papery u konteksti rozvytku rynku borhovykh zobov’iazan’], Ukraina finansova. Informatsijno-analitychnyj portal Ukrains’koho ahentstva finansovoho rozvytku, available at: http://ufin.com.ua/analit_mat/rzp/148.htm
22. Financial Sector Development Project FINREP (2012), “The importance of the government securities market in Ukraine” available at: http://finrep.kiev.ua/download/journalist_infofair_1mar2012_govsecurities_ua.pdf/
23. Chechel’ O. (2010), “Government borrowing as an important mechanism of formation of economic policy” [Derzhavni zapozychennia iak vazhlyvyj mekhanizm formuvannia ekonomichnoi polityky derzhavy], Efektyvnist’ derzhavnoho upravlin-nia, Vol. 23, pp. 459-467, available at: http://archive.nbuv.gov.ua/portal/soc_gum/Edu/2010_23/ fail/Chechel.pdf
24. The Verkhovna Rada of Ukraine (2010), “Budget Code of Ukraine”, available at: http://zakon1.rada.gov.ua/laws/ show/2456-17/page2