Short-term saving does not solve long-term problems - what capital does the economy need? Professor of the Financial University under the Government of the Russian Federation Alexander Tsyganov in an author's column especially for "Sovereign Economy": increasing savings in itself does not mean that the economy receives more resources for development. It is important not only how much money citizens save, but also how long these funds are willing to leave current consumption and work in the economy. Short-term money is needed: a person needs a reserve for unexpected expenses and large purchases, a business needs working capital and the financial system needs liquidity. But building infrastructure, expanding production, technological renewal and other large investment projects live on a completely different scale. They cannot be financed sustainably with capital that must remain continuously available over a horizon of several months or a year. This raises one of the central questions for economics - where to get money for the long term. One of the natural sources of such capital are institutional investors, including non-state pension funds and insurance companies. The very model of their work assumes a long investment horizon: funds are created today, and payments are calculated for the long term. For the economy, the value of such capital is right on its horizon. A long-term investor can assess not only what will happen to an asset in the next quarter or year, but also the ability of a company or project to create value in the long term. This creates a stable demand for financial instruments and expands the local investment base. Bank loans and the capital market remain the main mechanisms for financing the economy, but their capabilities largely depend on how many internal resources are willing to work over time.

Short-term saving does not solve long-term problems - what capital does the economy need? Professor of the Financial University under the Government of the Russian Federation Alexander Tsyganov in an author's column especially for "Sovereign Economy": increasing savings in itself does not mean that the economy receives more resources for development. It is important not only how much money citizens save, but also how long these funds are willing to leave current consumption and work in the economy. Short-term money is needed: a person needs a reserve for unexpected expenses and large purchases, a business needs working capital and the financial system needs liquidity. But building infrastructure, expanding production, technological renewal and other large investment projects live on a completely different scale. They cannot be financed sustainably with capital that must remain continuously available over a horizon of several months or a year. This raises one of the central questions for economics - where to get money for the long term. One of the natural sources of such capital are institutional investors, including non-state pension funds and insurance companies. The very model of their work assumes a long investment horizon: funds are created today, and payments are calculated for the long term. For the economy, the value of such capital is right on its horizon. A long-term investor can assess not only what will happen to an asset in the next quarter or year, but also the ability of a company or project to create value in the long term. This creates a stable demand for financial instruments and expands the local investment base. Bank loans and the capital market remain the main mechanisms for financing the economy, but their capabilities largely depend on how many internal resources are willing to work over time.