The aim of this paper is to analyze the structure of the current financial system,including money circulation in it, and defi ne its infl uence on business cycles. The paperexamines causes of disturbances in money circulation which lead to shallow or even deepeconomic crises. The role of central banks is marginal. The author concludes that properfunctioning of the current financial system is subject to constant credit growth. If creditgrowth is insufficient, the system collapses due to money

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... rding and other disorders inmoney circulation. It causes inability to repay the debts, which results in uncertainty andreduces aggregate demand. The entire study is based on US data.