The article is dedicated to determination of the essence of one of the most important institutes of financial law, state credit. Providing carrying out the purpose of public financial activity (recovery by the state all financial costs) also maintains due to using this legal institution of financial law. Different approaches to the determination of the essence of the state credit, that means the ability of the state to provide extra-earnings to the budget, to cover its deficit, are analyzed. Relationships, concerning state credit, are characterized by inequality of sides, where one side is the state as the borrower and the other side is the population and business entities as creditors. They have a number of peculiar features, which give the opportunity to talk about the state credit as financial and legal institute.

The state credit is a complex of special economical relationships, in which the state acts as a debtor and the population and business entities act as creditors. State credit institute is a form of physical and juridical persons’ participation in forming of state’s money national fund. The money, got from the state credit, doesn’t give new incomes, but it acts as temporary state’s resource, that must be returned.

Wider concept of the state credit can be determined as an institute of financial law, which unites and regulates a homogeneous group of financial legal relations about mobilization of temporary free money of enterprises, banks, population’s savings for national needs and is one of the forms of physical and juridical persons’ participation in forming of state fund.

The main purposes of state credit are:

• solving of the problems of budget deficit;
• realization of regional financial and credit policy, that is directed towards equalization of population’s social and economical life conditions and functioning of regional economy;
• support of local municipality while solving urgent social and economic tasks;
• support of priority for the economy sectors and kinds of activity.

Legal relations that develop in the area of the state credit are very different. Huge amount of subjects, which have specific authorities, takes place in them. The peculiarity of legal relations in the area of the state credit is the fact, that they have state power character and the state, in spite of its debtor’s position, sets the rules of subjects’ behavior by itself.

Key words: state finance, public finance activity, credit, the state credit, cost funds.

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