FINANCIAL SYSTEM AS INFRASTRUCTURE OF MONETARY FLOWS: A MODEL BASED ON THE FLOW-CENTRIC APPROACH

Abstract

In the context of deep economic transformation and rising systemic instability, a new methodological foundation is required for structuring the financial system. Traditional approaches –subject-based, institutional, and functional – fail to adequately reflect the internal logic of monetary flows or identify real channels of financial shock transmission. This article substantiates the flow-centric approach as an alternative paradigm in which the nature of the monetary flow itself serves as the system-forming criterion. Building on the systems approach and drawing on the ideas of A.A. Bogdanov and L. von Bertalanffy, an original structure of the financial system is proposed, comprising three subsystems: the fiscal system (budget system, extrabudgetary funds, debt system), the monetary and credit system (emission and credit subsystems), and the financial market system, uniquely divided for the first time into the basic financial market (commodity-money exchanges) and the pure financial market (homogeneous monetary exchanges). A table with a concise description of the essence of each element is provided. It is argued that this novel division of the financial market enables the identification of imbalances between the real and financial sectors and enhances the model’s predictive value. The findings open avenues for developing holistic indicators of financial stability and designing regulatory measures focused on the monetary circuit as a whole.