ECONOMIC ESSENCE (NATURE) OF THE REGION’S FINANCIAL POTENTIAL

Abstract

The functioning and development of any economic system is possible only if the system in some capacity - economic, social, financial, requiring research, analysis, evaluation, development of measures to further its use and so on. However, today in the economic literature we can find a common approach to the definition and interpretation of the category «financial capacity». In some publications devoted to direct research and evaluation of financial resources, the concept of "financial capacity" is used synonymously with the available financial resources, in others it is identified with a potential budget or with other types of building.                  

The analysis of relevant scientific literature enables us to reasonably conclude that there are at least two approaches to determining the financial capacity. The first – it is a resource that varies in the works of different authors from a narrow, monetary, to more advanced financial and resource, and second, more wide - finance and economic. According to the resource potential financial approach as a set of all available cash or financial resources, and in accordance with the financial and economic - in its composition also involved potential sources of further preparation and accumulation of resources.

In addition, research also allows us to identify two approaches - the budget under which the financial capacity is considered as a budget, or tax and trust, or investment, the followers of which are focused not only on the sources of the formation of financial capacity, but aimed at the formation of financial capacity, mostly - the socio-economic development. Consequently, these approaches are in fact, reflect the place, role and importance of the financial potential of the region for its further development.

Consequently, the financial potential of the region - is the ability to accumulate financial resources through the use of available revenue sources through the use of appropriate financial instruments to ensure financial stability and further socio-economic development of the territory.