Finance and Credit
 

Financial risks and financial activities of public legal entities

Vol. 24, Iss. 3, MARCH 2018

Received: 15 January 2018

Received in revised form: 30 January 2018

Accepted: 13 February 2018

Available online: 29 March 2018

Subject Heading: THEORY OF FINANCE

JEL Classification: H8, H19, H39

Pages: 565—578

https://doi.org/10.24891/fc.24.3.565

Sabitova N.M. Institute of Management, Economics and Finance of Kazan (Volga Region) Federal University, Kazan, Republic of Tatarstan, Russian Federation
sabitovanm@mail.ru

https://orcid.org/0000-0002-2866-1703

Importance The article investigates financial risks associated with financial policy of public legal entities being subjects of financial activity.
Objectives The aims are to investigate the theory of financial risks inherent in public legal entities based on specifics of their financial activities, consider salient features of financial risks of public legal entities and factors affecting the financial risks of the Russian Federation, the subjects of the Russian Federation, and municipalities, and provide recommendations on financial risk monitoring.
Methods The study employs methods of logical and statistical analysis.
Results I offer my own approach to defining the financial risk and its elements. The paper proves that financial policy and specifics of financial activities of public legal entities determine the composition of elements of their financial risk, and addresses problems related to financial risk transfer for public legal entities.
Conclusions and Relevance Financial policy of public legal entities should consider principles of risk-oriented approach. Financial risk monitoring should cover the activities of all public legal entities and its results should be reflected in financial management quality evaluation of both the subjects of the Russian Federation and municipalities.

Keywords: public legal entity, financial risk, diversification, financial activity, risk management

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