ROLE OF FINANCIAL AND CREDIT INSTITUTIONS IN THE REGIONAL ECONOMIC DEVELOPMENT

The issue of the role of the financial and credit services occupies one of the central positions in economic studies. The need to achieve the present-day goals of socioeconomic development of the regions in the context of the increasing financial restraints determine the need to form a financial structure with the purpose of creating the necessary background for stable economic dynamics. This paper analyzes the main provisions that concern the interrelation of financial indicators and economic growth, and summarizes the results of the empirical studies of the role of financial and credit institutions in regional economies through the example of the subjects of the Volga Federal District. The effect of the activity of financial and credit institutions on the economic growth of regions was analyzed using a group of indicators. The studies revealed a significant positive connection between the functioning of the financial institutions and the regions' economic development through the distribution of resources and the implementation of the function of financial intermediation. However, the phenomenon of inhomogeneity of the regions' financial development limits the access of financial subjects to free liquid capital and leads to the state of "financial repression", suppression, and retardation of the economic growth. Altogether, the mechanism of generating changes and transferring the impulses to the economy, ensured by the financial service sector, and the nature of the factors that determine the development of the financial sector itself, continue to be highly topical for research. (C) 2019 Published by Future Academy www.FutureAcademy.org.UK