Finance includes social relations with the distributional nature of social wealth in the form of monetary value expressed through the process of creating, managing, and using certain monetary funds. Although these social relations have the same nature, they can be formed in different orders and scopes, associated with the formation and use of monetary funds for different purposes.
Therefore, finance will include different groups of Vietnam Economy System or financial relationships. Each of these groups of financial relationships is characterized by common characteristics. These groups of relationships are both separate and interrelated depending on the way of creation, distribution, and the purpose of consuming or accumulating monetary funds formed from groups of social relations.
These groups of financial relationships are considered as each financial stage. The collection of all financial stages forms the financial system. Thus, the financial system is a collection of groups of different financial relationships (financial stages) formed in the process of creating, managing, and using certain funds and monetary sources.
What about Vietnam's Economy System specifically? Let’s take a look at our article Vietnam Economy System: Type And Source.
The financial system can be understood as a unified system including many stages. Each stage is a group of financial relations with the same characteristics, economic nature, and content. It has a unique formation mechanism and uses to distinguish it from other stages and stages in the financial system that is related to each other. closely together.
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Each stage in the financial system has its own way and method to form and use monetary capital. At the same time, in each different stage of the economy, the financial stages and the financial system also have certain development steps and changes. In the current conditions, Vietnam's economy system includes the following stages: state budget, credit, insurance, corporate finance, household finance, and social organizations.
This is the central stage of the financial system. Finance-budget relations are associated with the formation and use of state budget funds. This is the largest centralized monetary fund of the state, providing financial means for the performance of state functions and tasks.
The state budget fund is formed from financial sources of other financial stages in the financial system, in which mainly payments of mandatory legal nature such as taxes, fees, and charges. In addition, the state budget fund is also formed from other sources such as loans from the population, loans, aid...
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In the conditions of a commodity-monetary economy, the phenomenon of temporary idleness of monetary capital inevitably arises. These capital sources are concentrated in different forms to form credit funds to provide and satisfy the monetary needs of subjects in society.
Insurance relationships form in the process of financial redistribution, associated with the creation and use of insurance funds. The purpose of insurance activities is to compensate for damage and pay insurance to the subjects participating in the insurance relationship. An insurance fund is formed from an insurance relationship that will form a financial source to participate in the financial market. Insurance became a part of the financial system from the creation of an insurance fund and the redistribution of this monetary fund.
For residential finance, there are two types of financial activities. Firstly, individual production and business activities in the fields of industry, services, and agriculture all require investment capital. This capital is formed from their accumulated income or from various sources in the financial markets.
Another type of financial relationship is associated with the formation and use of a monetary fund to satisfy the population's consumption. This fund is formed from the regular or irregular income of the individual. People use this fund to consume, pay taxes to the state, and the excess or idle they put into the financial market in the form of investment such as capital contribution, savings...
This financial stage also includes the finance of social organizations and non-governmental organizations. These organizations form their own monetary fund to serve consumption, survival, and development activities. This fund is formed from the contributions of members or from the contribution of the population, support from the state... At certain times when not yet used, that financial source can also participate in the financial market.
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Corporate finance is the basic stage of the financial system, including financial relations associated with the production and business activities of enterprises such as relationships in the formation and establishment of business capital, income distribution, accumulation within enterprises, and in relation to the state budget. This is the basic financial stage associated with the production and business activities of enterprises.
The main activity of enterprises is to create social products and national income. On that basis, through the distribution relations in the form of value, monetary funds have been formed with different uses such as compensation, consumption, or accumulation to meet the needs of reproduction, residential consumption, or government spending. In the current market economy conditions, the stages in the financial system can establish a direct relationship with each other or can also be contacted through the financial market.
A financial market is an aggregated concept, where "buying and selling" activities in the financial sector take place, including the actors involved in the activities and the place where those activities take place. The object of "buying and selling" in the financial market is the right to use short-term or long-term financial sources (T-bills, stocks, bonds, investment fund certificates, etc.) on the financial market and sellers can be all actors representing each stage of the financial system.
Vietnam Economy System: Type And Source article has helped you to identify the stages of Vietnam Economy System. If you have any questions, let us know in the comment section and we can give you the best answer. You can fill in the form and write a question, We can response that question ASAP. Hope you have a good time with EFEX.