VIRTUAL CASH-POOLING AS A MODEL OF TREASURY BUDGET ACCOUNT MANAGEMENT

Abstract

In recent years, innovations have been introduced into the activities of the Federal Treasury with the purpose to improve the quality of the Treasury accounts and cash balance management including, in particular, the practice of carrying out various liquidity support operations with free balances on the STA (Single Treasure Account). However, these actions concern only the federal budget funds physically concentrated on account 40105. Transferring the experience of the federal budget liquidity management to the regional level would make a significant step towards the development of treasury services for the state financial system. Such a transformation has certain difficulties, one of which being the choice of a model for managing free flows of differentiated budgets of 85 entities. The paper suggests the development of a program model for managing the cash balances of the budgets of the Russian federal subjects. The study used a comparative analysis of various types of cash flow management systems. Based on the selected type - virtual pooling - the system is simulated by the STA example for a single virtual account of the subjects. The powers of the participants of the system are determined, mathematical calculations of key indices for accounts and financial instruments are performed. Apart from its direct impact on the budget liquidity settlement for federal subjects, the capabilities of this model are represented by indirect positive influence on the current federal STA system, financial tools used in it and the internal debt policy of the country.

Keywords

• budget payment system
• cash pooling
• liquidity management, treasury accounts of federal subjects
• single treasury account