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The informal economy as a destructor of the national financial security

Vol. 15, Iss. 8, AUGUST 2019

Received: 15 May 2019

Received in revised form: 4 June 2019

Accepted: 22 June 2019

Available online: 15 August 2019


JEL Classification: Е52, Е61, Е62, G23, H30

Pages: 1574–1588

Ermakova E.R. National Research Ogarev Mordovia State University (MRSU), Saransk, Republic of Mordovia, Russian Federation

Subject The article discusses the informal economy as a threat to the national financial security.
Objectives The research determines how the informal economy influences the financial security of the State.
Methods The research involves the analysis, synthesis, induction, deduction, methods of grouping, analogies, comparison and expert assessment, comprehensive and systems approaches.
Results I scrutinized proceedings of the Russian and foreign scholars specializing in the impact of informal economic processes on certain aspects of financial security. The informal economy is a destabilizing market factor of the national financial security. I show the impact of the informal economy on some aspects of financial security, such as banking loans, monetary, fiscal and stocks. The article approaches key processes in the modern financial system of Russia in terms of an informal segment and financial security. I determine the role of the banking, para-banking and State-financed sectors serving informal economic processes. Corruption is viewed in terms of managerial decisions of the State that impede the stability of the financial system.
Conclusions and Relevance Informal economy is a phenomenon of the Russian economy that permeates all aspects of life and triggers additional risks for economic agents. Thus, the national financial security and higher competitiveness of the financial system require to beat not only the existing threats, but also make a conscious effort to extirpate illegitimate customs, schemes and practices of business.

Keywords: informal economy, corruption, financial security, financial system, competitiveness


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