Vocabulary

by definition	по определению
loan	ссуда
advance	аванс, ссуда
clearing bank	клиринговый банк
intermediary	посредник
deposit account	депозитный счет, срочный счет
current account	текущий счет
to pool risks	объединять риски
acquire	приобретать
expertise	профессиональный опыт
assess	оценивать
inherent	присущий, свойственный
ultimate borrower	конечный, основной заемщик
margin	(зд.) разница, маржа
borrowing interest rate	процентная ставка на заемный капитал
lending interest rate	ставка ссудного процента
to collect cheques	инкассировать чеки
bill	вексель
dividends	дивиденды
overdraft facility	услуги по овердрафту
discount	учитывать (векселя)
letter of credit	аккредитив
traveller's check	дорожный чек
strong-room facilities	сейфовые помещения, хранилища
valuables	ценности
safe custody (of securities)	хранение (ценных бумаг) в сейфе
redeem	выкупать, погашать, возвращать
retail banking	операции банков с широкой клиентурой
wholesale banking	операции крупных банков между собой
merging	слияние, объединение
investment banking	инвестиционная деятельность банков
intermediation	посредничество
underwriting	андеррайтинг, поручительство
offshore banking	офшорная банковская деятельность
denominated	деноминированный
transact	заключать (сделки), вести (дела)
withdrawal	(зд.) снятие со счета
at short notice	с кратковременным уведомлением
percentage	процент; доля, выраженная в процентах
cash ratio	норма кассовых резервов (отношение кассовых активов банка к де­позитам)
guard	охранять, сохранять
credit policy	кредитная политика
cautious	осторожный
liquidity ratio	коэффициент ликвидности (отношение ликвидных средств к сумме активов)
"near money"	«почти деньги», квазиденьги (активы, легко обра­щающиеся в наличность)
money at call	деньги до востребования
Treasury bill	казначейский вексель

a. Central Banking. Complete these sentences about Central Banks using the words in the box:

Central Banks, such as the Bank of England, the Federal Reserve Board in the US, and the Bundesbank in Germany:

Act, control, fix, function, implement, influence, issue, supervise

1............ as banks for the government and for other banks.

2............ monetary policy - either the government's, as in Britain, or their own, if they are independent, as in Germany and the USA.

3............ the money supply, measured by different aggregates such as МО, Ml, M2, M3, etc.

4............ the minimum interest rate.

5............ as lender of last resort to commercial banks with liquidity problems.

6............ coins and bank notes.

7............ (floating) exchange rates by intervening in foreign exchange markets.

8............ the banking system.

b. Complete this paragraph using these words:

Assets, cash, interest, liquid, maturity, reserve

Because a commercial bank can lend most of the money deposited with it to other borrowers, who in turn may lend it to another borrower, each sum of money deposited in a bank is multiplied several times. To ensure the safety of the banking system, central banks impose (1).......... requirements, obliging commercial banks to deposit a certain amount of money with the central bank at zero (2)........... Central banks in different countries also impose different "prudential ratios" on commercial banks. These are ratios between deposits and liquid (3)........... that are considered sufficient to meet demands for (4)............ (A bank's assets are its loans, which should, in theory, all be paid back one day, and its liabilities are the customers' deposits, which can all be withdrawn one day.) For example, a bank's capital ratio is between its capital and reserves on the one hand, and its total assets on the other. The reserve asset ratio is between deposits with a (5)........... of under two years, called "eligible liabilities," and reserve assets, which include cash and assets that are (6)........... - i.e. quickly convertible into cash - such as reserve deposits held

by the central bank, and securities such as treasury bills.

c. Complete the text using these words:

accounts	bank loan	cheque	customers'
current account	debt	depositors	deposits
lend	liabilities	liquidity	optimise
overdraft	salary	spread	standing orders
return	transfer	wages	withdraw

Commercial banks are businesses that trade in money. They receive and hold (1)..........., pay money according to (2)........... instructions, (3)........... money, etc.

There are still many people in Britain who do not have bank (4)............ Traditionally, factory workers were paid (5)........... in cash on Fridays. Non-manual workers, however, usually receive a monthly (6)........... in the form of a cheque or a (7)........... paid directly into their bank account.

A (8)........... (US: checking account) usually pays little or no interest, but allows the holder to (9)........... his or her cash with no restrictions. Deposit accounts (in the US also called time or notice accounts) pay interest. They do not usually provide (10)........... (US: check) facilities, and notice is often required to withdraw money. (11)........... and direct debits are ways of paying

regular bills at regular intervals.

Banks offer both loans and overdrafts. A(12)... is a fixed sum of money, lent for a fixed period, on which interest is paid; banks usually require some form of security or guarantee before lending. An (13)........... is an arrangement by which a customer can overdraw an account, i.e. run up a debt to an agreed limit; interest on the (14)........... is calculated daily.

Banks make a profit from the (15)........... or differential between the interest rates they pay on deposits and those they charge on loans. They are also able to lend more money than they receive in deposits because (16)........... rarely withdraw all their money at the same time. In order to (17)........... the return on their assets (loans), bankers have to find a balance between yield and risk, and (18)........... and different maturities, and to match these with their (19)........... (deposits).

The maturity of a loan is how long it will last; the yield of a loan is its annual (20)........... — how much money it pays - expressed as a percentage.

d. Types of Bank. This exercise defines the most important kinds of bank. Complete the text using these words:

Central banks, building societies, finance house, commercial banks, merchant banks, investment banks, supranational banks, universal banks

(1)........... supervise the banking system; fix the minimum interest rate; issue bank notes; control the money supply; influence exchange rates; and act as lender of last resort.

(2)........... are businesses that trade in money. They receive and hold deposits in current and savings accounts, pay money according to customers' instructions, lend money, and offer investment advice, foreign exchange facilities, and so on. In some countries such as England these banks have branches in all major towns; in other countries there are smaller regional banks. Under American law, for example, banks can operate in only one state. Some countries have banks that were originally confined to a single industry, e.g. the Credit Agricole in France, but these now usually have a far wider customer base.

In some European countries, notably Germany, Austria, and Switzerland, there are (3)........... which combine deposit and loan banking with share and bond dealing, investment advice, etc. Yet even universal banks usually form a subsidiary, known as a (4)............ to lend money - at several per cent over the base lending rate - for hire purchase or instalment credit, that is, loans to consumers that are repaid in regular, equal monthly amounts.

In Britain, the USA and Japan, however, there is, or used to be, a strict separation between commercial banks and banks that do stockbroking or bond dealing. Thus in Britain, (5).......... specialise in raising funds for industry on the various financial markets, financing international trade, issuing and underwriting securities, dealing with take-overs and mergers, issuing government bonds, and so on. They also offer stockbroking and portfolio management services to rich corporate and individual clients. (6)........... in the USA are similar, but they can only act as intermediaries offering advisory services, and do not offer loans themselves.

Yet despite the Glass-Steagall Act in the USA, and Article 65, imposed by the Americans in Japan in 1945, which enforce this separation, the distinction between commercial and merchant or investment banks has become less clear in recent years. Deregulation in the US and Britain is leading to the creation of "financial supermarkets" - conglomerates combining the services previously offered by stockbrokers, banks, insurance companies, etc.

In Britain there are also (7)........... that provide mortgages, i.e. they lend money to home buyers on the security of houses and flats, and attract savers by paying higher interest than the banks. The savings and loan associations in the United States served a similar function, until most of them went spectacularly bankrupt at the end of the 1980s.

There are also (8)........... such as the World Bank or the European Bank for Reconstruction and Development, which are generally concerned with economic development.

e. Banking Products. Complete the text using these words:

Cash dispensers, cheque, credit card, current account, deposit account, foreign currency, investment advice, loan, mortgage, overdraft, pension, standing order

My salary is paid directly into a low-interest (1)............. I can withdraw money from automatic (2)........... with a cashcard, so I hardly ever actually go into a bank. I pay regular, monthly bills by way of a (3)...........: the bank pays them according to my instructions, and debits my account.

I pay irregular bills by (4)............ Nearly everyone I know in Britain has a chequebook, but when I lived on the Continent, I found that people hardly used them. They often paid cash, or paid bills at a post office with a paying-in slip.

I also have a (5)............ which is useful for ordering things by post or on the telephone, and for travelling worldwide. I also use it in shops and restaurants, but try not to spend more than I can pay when the bill comes a month later, as this is a very expensive way of borrowing money. The annual interest is exorbitant - well over 20%.

I used to have a (6)........... in a building society which paid higher interest than the current account at the bank, but had restrictions as to how and when I could withdraw my money. But then we bought a flat. I got a 90% (7)........... from the building society: i.e. we had to pay a deposit of 10% with our own savings.

That is why I have no more money and no more deposit account. In fact I have arranged an (8)........... with the bank, which means I can occasionally withdraw more money than is actually in my account. Interest is calculated daily. Last year I asked the bank for a (9)........... to buy a car. I (only!) wanted two months salary, but they refused. Since I don't like the high interest rates that the garage's hire purchase people charge, I bought a cheap second-hand car instead.

I always use the bank to buy (10)........... when I go abroad, because their rates are better than the bureaux de change. I don't like travellers' cheques, and I've never had my money stolen - yet.

My bank is also always trying to sell me a private (11)........... plan, for when I retire, but I'm not interested. They also keep offering me (12)........... about shares, bonds, unit trusts, mutual funds, and so on. They don't seem to realise that if I could afford to buy all these things, I wouldn't need an overdraft!

f. All the words below can be combined with bank or banking in a two-word partnership, e.g. bank holiday or off-shore banking. Add the word bank or banking either before or after each of the words below:

1) account;	10) merchant;
2) balance;	11) note;
3) central;	12) off-shore;
4) clerk;	13) retail;
5) commercial;	14) robbery;
6) deposit;	15) savings;
7) holiday;	16) statement;
8) investment;	17) system;
9) manager;	18) wholesale.

g. Now complete the following sentences:

In my country the most important types of banks are:………………..

The banking services that I use are:…………………..