JEL classification: E42; E44; E51
Introduction. The formation of money supply is influenced by the policy of “cheap money” and the emission of the significant amount of money in the modern world economy. Modification of the money supply mechanism is accompanied by an unprecedented increase of the transactions with derivative financial instruments, accelerated growth of debt in global scale. This modification leads to the global imbalances, including the gap between the financial and the real spheres, increasing risks as to national economies as to world economy.
The purpose of the article is to determine the peculiarities of modern modification of the mechanism of money supply in the world economy and the risks, that this modification causes.
The study used such methods as analysis, synthesis, scientific abstraction, induction to identify the main characteristics of modern modification of money supply; comparison; generalization to make conclusions relating to the evaluation of modern tendencies and the essence of the process of money supply modification.
Results. The concept of “global liquidity” and its modern structure have been specified. The global liquidity has been considered as the total amount of means of payment in world currencies, as well as financial instruments that can be exchanged for these means of payment in the shortest time and with minimal costs. The changes of structure and volume of global liquidity influence on the modification of money supply, imbalances between real and financial sectors of global economy. The peculiarities of the mechanism of modification of the money supply in the world economy are revealed, among these peculiarities are following: growth of possibilities of money multiplication in the system of credit institutions; increasing trade by structured financial products and thus masking the growth of debts; the geographical, quantitative and qualitative imbalances in the supply and demand of global liquidity; increase of Basel standards role in regulating the multiplication of money in the network of commercial banks, and changing the tools of the state monetary policy. Such modification is accompanied by a singular increase of debt in a global scale, possibilities of transformation of private financial institutions debt into public debt, unpredictable fluctuations in cryptocurrencies market, increasing the value of global liquidity through cryptocurrencies, instability of the global financial system, growth of risks of global financial crises.
Conclusions. Further studies of the modification of the money supply mechanism in the world economy should take into account changes in the composition of reserve currencies due to the growth and strengthening of individual economies, the impact on the volume and structure of global liquidity according to Basel III standards, their effectiveness in reducing risks of global financial instability.
Keywords: money, money supply, bank, loan, debt, global liquidity.
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The article was received 05.07.2020