Development of Sub-Federal Bonds Market in the Far Eastern Federal District

Abstract

He development of the far Eastern Federal district, strengthening its economic and innovative potential, and improving the quality of people’s lives remains an important state priority. The measures taken by the Government have brought certain results: the number of territories of advanced development is increasing, jobs are created at the expense of attracted funds of investors and budget investments. At the same time, the regions of the Far East continue to experience difficulties in the financial provision of expenditure obligations, there are risks in the stability of the budgets of the subjects associated with a significant amount of debt obligations, with a simultaneous increase in infrastructure spending due to the need to achieve national goals and objectives. The total amount of public debt has almost doubled since 2014. All regions of the far Eastern Federal district have debts, except for the Sakhalin region. The example of the far Eastern regions shows that the replacement of commercial lending budget only allowed to change the structure of public debt and reduce the cost of its service, but did not affect the reduction of its total volume. The article considers the mechanism of sub-Federal bonds as a source of covering the budget deficit of the regions of the Far East, which are currently practically not represented in the bond market. At the same time, the current policy of the Central Bank and the Ministry of Finance of Russia allows to create favorable conditions for placement of long-term bond loans. The decline by the Bank of Russia key rate and the subsequent lowering of rates of return, increase investors ‘ demand for government securities and bonds, allowing the regions to decide issues of financing infrastructure development along with the improvement of the debt structure.