Lyubimtseva_S_N__Koreneva_V_N_L_93_Kurs_angli

deposit v депонировать

"prudential ratios." «коэффициенты благоразумия» deposit n вклад

capital ratio отношение капитала к активам

liquid ratio отношение ликвидных активов банков к суммарным депозитам target n цель, контрольная цифра

refinancing n рефинансирование

open market operations операции на открытом рынке restriction n ограничение(я)

the Federal Reserve System n Федеральная резервная система financial circles финансовые круги

federal reserve bank федеральный резервный банк board of governors совет управляющих headquarters n штаб-квартира

executive branch исполнительная ветвь власти term of office срок полномочий

to perform a function выполнять функцию stabilize v стабилизировать

quantity n количество

money in circulation деньги в обращении to make sure обеспечивать, гарантировать accept v акцептовать

check clearing клиринг чеков, чековый клиринг collect v инкассировать

worn currency (зд.) старые банкноты safekeeping n безопасное хранение security n ценная бумага

to maintain accounts вести счета transfer of funds перевод средств

international agency международное агентство banking panic банковская паника

prevent v предотвращать

broad powers широкие полномочия regulation(s) n правило, инструкции

to be aimed at doing smth быть направленным на ...

sound business practice честная практика деловых отношений fraction n часть, доля

lend v ссужать

government bond государственная облигации despite prep несмотря на

stock market crash крах фондовой биржи

the Great Depression Великая депрессия

Federal Deposit Insurance Corporation (FDIC) Федеральная корпорация страхования депозитов depositor n депонент, вкладчик, владелец банковского счета

limit n лимит, предел

in the event that... в случае, если ...

В. 2-tier system двухуровневая система

to be represented (by) быть представленным (кем-л.) lombard operations операции с ломбардными кредитами

REPO operations операции РЕПО special-purpose credit целевой кредит strengthen v укреплять

withdraw v (зд.) отзывать in the light of в свете bankruptcy n банкротство

authorized capital уставный капитал

reserve for possible losses on loans and securities резерв на покрытие возможных убытков по ссудам и ценным бумагам

legal base законодательная база specify v оговаривать, устанавливать

tremendous adj громадный, потрясающий hypothecation n ипотека

obligatory insurance обязательное страхование

to be exempt from taxes быть освобожденным от налогов tax treatment налоговый режим

apply v применять

charges n pl (зд.) отчисления

EXERCISES

Ex. 1. Answer these questions:

A.1. What is the major sector of any modern monetary system? 2. What are central banks responsible for?

3. What functions do central banks perform?

4. What is done to ensure the safety of a banking system?

5. Why are "prudential ratios" imposed on commercial banks? 6. What is the structure of the Federal Reserve System?

7. How are members of the board appointed?

8. What functions does the "Fed" perform?

9. What services does the "Fed" perform for banks and the government? 10. How does the "Fed" contribute to the stabilization of the banking system? 11. What role does the "Fed" play in the making of economic policy?

B.1. How is the Russian banking system organized?

2. Has the role of the CBR changed over the years of the economic reforms?

3.What are the functions of the CBR?

4.What measures are being worked out to ensure stability of the Russian banking system?

5.How will the Russian banking business be developing?

6.What tax treatment is applied to banks in Russia?

Ex. 3. Find English equivalents for the following Russian phrases from the text:

А. система центрального банка; быть важным (иметь значение); быть ответственным за проведение кредитно-денежной политики; контролировать денежную массу; устанавливать процентную ставку;

проблемы нехватки ликвидных средств; осуществлять эмиссию денег; надежность банковской системы; депонировать средства в центральном банке под нулевые проценты; быть известным в финансовых кругах; совет управляющих; это результат длительного срока полномочий управляющих; члены совета назначаются; председатель совета выбирается; чеки, выписанные на банк; депонировать чеки в банке; осуществлять клиринг чеков через Федеральную Резервную Систему; вести счета; основная причина организации ФРС; покупать государственные облигации;

операции на открытом рынке; многие банки обанкротились;

В. двухуровневая система; представительства иностранных банков; финансовые преобразования;

система рефинансирования; заниматься операциями на открытом рынке; покрывать дефицит бюджета; неинфляционные меры; усиливать роль; отзывать лицензии; в свете недавних банкротств;

соответствовать международным стандартам; резерв на покрытие возможных убытков; закон об ипотеке; обязательное страхование банковских вкладов; быть освобожденным от уплаты налогов;

отчисления в Пенсионный фонд.

Ex. 4. Say in a few words what the main text is about. Use the opening phrases from Ex. 4 (Unit 1). Ex. 5. Sum up the contents of the main dialogue. Use the phrases from Ex. 5 (Unit 1).

Ex. 6. Read the dialogue, translate the Russian remarks into English and act it out.

Foreigner. Western bankers unanimously admit that your banking system has changed rapidly since Russia embarked on economic reforms.

Russian: Да, это так. Я рад слышать такую оценку. Наша банковская система изменилась, и сейчас она является двухуровневой системой. Первый уровень представлен центральным банком, а второй – коммерческими банками.

F.: Undoubtedly, your Central Bank has contributed to the process and supported the reforms.

R.: Я лично считаю, что усилия ЦБ по осуществлению кредитно-денежной политики в новых условиях, в частности по контролю за денежной массой и борьбе с инфляцией, трудно переоценить. F.:Your Central Bank has become very active in developing the banking sphere and the services it provides. R.: Да, например, он ввел в банковскую практику операции РЕПО, ломбардные кредиты, а также проводит операции с ценными бумагами на вторичном рынке.

F.: Central banks in market economies are "lenders of last resort" for banks. Does your Central Bank help banks with liquidity problems?

R.: Отвечая на ваш вопрос, хочу прежде всего подчеркнуть, что ЦБР, контролируя работу коммерческих банков, стремится обеспечить надежность и стабильность банковской системы. Он выдает и отзывает банковские лицензии, вводит резервные требования, обязывающие коммерческие банки депонировать часть своих активов в ЦБ под нулевые проценты. Что касается помощи банкам,

имеющим проблемы с ликвидностью, то в случае необходимости ЦБ оказывает такую помощь. F.: Recent years saw a rapid growth in the activities of foreign banks in the US. What about Russia?

R.: Наши банки пока еще в определенной степени защищены от конкуренции иностранных банков,

хотя иностранные банки имеют свои филиалы и представительства в России. Ex. 7. Work on vocabulary and grammar.

a)Study the key words for the unit in the dictionary at the back of the book: requirements, deposit, check, reserves, capital, assets, liabilities;

b)Think of the verbs that are most commonly used with:

money supply, exchange rate, banknotes, safety, requirements, powers, bank reforms, inflation, operations, restrictions;

c) Think of the nouns that are often used with:

to implement, to supervise, to issue, to influence, to ensure, to stabilize, to set up, to lend, to regulate, to strengthen, to exempt;

d)Make your own sentences with any five word combinations from (b) and (c).

e)Match the verbs from (a) with the nouns from (b) below:

f) Write out from the main text international words like: central, modern, etc. Transcribe them and read aloud.

Ex. 8. a) Supply the articles where necessary.

b)Write down 3-5 questions about the text.

c)Describe the principal instruments of credit policy. Credit Policy

Credit policy is ... component of economic policy. It is a combination of measures taken by ... Central Bank to affect the supply of credit. The aims of ... credit policy may include stimulation or restriction of investment or consumer spending, ... avoidance of price inflation.

Credit policy and monetary policy tend to be closely related and in some countries credit policy is regarded as ... part of monetary policy.

Credit policy largely works indirectly. The Central Bank controls ... amount of credit advanced by commercial banks through the interest rate policy, by influencing ... liquidity, expanding or contracting the volume of Central Bank money. The principal instruments available for this purpose are ... discount policy,

minimum reserve requirements and open market operations. Direct credit control involving ... establishment

of credit ceilings is less frequently used now than in ... past, many governments regarding it as ...

undesirable interference with the market mechanism. Words you may need:

price inflation ценовая инфляция

the amount of credit advanced ... размеры кредита, предоставленного ...

discount policy учетная политика credit ceiling потолок кредитования

Ex. 9. a) Supply the prepositions where necessary.

b) Describe the impact of "easy" and "tight" monetary policy on an economy.

Monetary policy is the branch of financial policy that is concerned ... controlling the supply of money and credit. Monetary policy is important because of its impact... inflation and on interest rates.

If a government pursues an "easy" monetary policy it means that it allows the amount of money ...

circulation to rise and it lets banks increase the volume of loans.

If government pursues a "tight" monetary policy, it restricts the amount ... money in circulation and reduces the funds available ... banks... making loans.

When money is tight:

1.Interest rates rise, because commercial banks have to borrow ... a higher rate ... the interbank market.

2.Credit falls, because people and businesses borrow less ... higher rates.

3.Aggregate demand falls, because people and businesses buy less, as they have less money.

4.Output falls, too, because ... less consumption, firms produce less.

5.Unemployment rises, because companies are producing and selling less, and so need ... less labour.

6.Inflation falls, because there is less money in circulation.

7.The exchange rate will probably rise, if there is the same demand but less money, or if there is higher demand, as foreigners take advantage of the higher interest rates to invest ... the currency. Increasing the money supply, ... making more reserves available, has the opposite effects.

The amount of money ... circulation and its velocity of circulation determine the average level of prices and wages. Many central banks now set money supply targets. ... increasing or decreasing the money supply, the central bank indirectly influences ... interest rates, demand, output, growth, unemployment and prices. The central bank can reduce the reserves available ... commercial banks by changing the reserve requirements.

This reduces the amount ... money that banks can create and makes the money tight or scarce. Alternatively, the central bank can engage ... what are called open-market operations, which involve selling short-term government bonds (such as three-month Treasury bills) ... the commercial banks, or buying them back.

Words you may need:

money is tight денег недостаточно

interbank market межбанковский рынок velocity of circulation скорость обращения

to set targets устанавливать ориентиры, показатели alternatively adv (зд.) и наоборот

engage v заниматься (чём-л.)

short-term government bonds государственные краткосрочные облигации

Treasury bill казначейский вексель

Ex. 10. a) Open the brackets, putting the verbs in the correct form.

b) Compare the FED, the CBR and the Bank of England, using information from the unit. The Bank of England

The Bank of England is Britain's central bank. Founded in 1694, it (to be) the world's second oldest central bank, being six years younger than Sweden's Riksbank. It was privately owned until it (to nationalize) in 1946.

The Governor, Deputy Governor, and 16 Directors who form the Court of Directors (to appoint) by the sovereign on the recommendation of the Prime Minister.

The Bank of England is both monetary authority and bank supervisor, it is charged with the control of the banking system in the interests of the nation. The chief functions of the Bank of England are to act as the Government's bank in the widest possible sense. The main Government account is the central Exchequer Account in the Bank, to which all Government revenues eventually (to credit), and from which all Government payments originate. Other major ministerial accounts also (to keep) in the Bank and the major expenses of Government departments (to disburse) from these accounts.

The Bank does not lend money to the Government. If the Government needs funds it (to borrow) the sums required by issuing Treasury bills or by selling stocks. Treasury bills are short-term securities, offered for sale by tender, repayable three months after issue. The Bank's function is to balance every day the sums received against the sums needed, never allowing idle balances to accumulate. If moneys (to receive) in excess of requirements, the Bank buys back Treasury bills, adding them to its portfolio.

The Bank of England are bankers to the commercial banks, and also to the discount and accepting houses. The ordinary commercial banks (to keep) about half of their cash assets on current accounts with the Bank of England, which therefore acts as the "Bankers' Bank", using these deposits for the day-to-day settlement of indebtedness between the banks. A lot of overseas central banks and international bodies have accounts with the Bank of England to facilitate a wide variety of international transactions and to promote trade and prosperity.

The Bank is the central note-issuing authority. New notes (to issue) and worn notes (to withdraw) in very large numbers every day.

The Bank performs registration activities as registrar of government stocks and stocks of nationalized industries. It also (to pay) dividends when they fall due.

The Bank acts as the Government's agent for the administration of exchange control and protects the gold and foreign exchange reserves.

Being monetary authority in the country, the Bank implements the Government policy in the money market and the loan market by raising or lowering Bank Rate.

Because of its influential position in the financial affairs of the country the Bank gives useful financial advice to the Treasury to assist it in forecasts of the economic situation and the balance-of-payments position. The Bank also advises companies on capital structure and finance.

The style of work of the Bank much (to admire) by the world and (to give) the credit for the safe and successful growth of London as the world's number one international banking centre.

Words you may need:

sovereign n монарх

charge (with) v (зд.) поручать

Exchequer n казначейство credit v записывать в кредит

disburse v платить, оплачивать (из государственных средств) sale by tender продажа на торгах

idle adj (зд.) свободный, неиспользованный discount house учетный дом

accepting house акцептный дом

settlement of indebtedness урегулирование задолженности registrar n регистратор, регистрационное бюро

to fall due наступать (о сроке выплаты) exchange control валютный контроль

Bank Rate ставка Центрального банка

Eх. 11. Fill each gap with a suitable word from the box. Sum up the text in 5-7 sentences. Present your summary in class.

institutions apply engage conduct impact operating branches activities banks legislationresponsibilities powers

US Activities of Foreign Banking Organizations

The International Banking Act of 1978 (IBA) provided for federal regulation of the US operations of foreign banks and granted important new responsibilities to the Federal Reserve for the supervision and regulation of such operations. Enactment of this ________followed rapid growth in the activities of foreign banks in the United States and an increase in their competitive________upon domestic markets.

The IBA created a federal regulatory and supervisory structure for the US branches and agencies of foreign_______, similar to that applicable to US banks. This policy of "national treatment" promotes competitive equality between domestic and foreign banking________in the United States by giving foreign banks operating in this country the same________and subjecting them to the same restrictions and obligations that______to US banks. As part of the implementation of national treatment, the IBA limited expansion of interstate deposit-taking and domestic non-banking ________ of foreign banks, provided the option of federal licensing for agencies and branches of foreign banks, and required FDIC insurance for branches that _______in retail deposit-taking.

At the federal level, the IBA apportioned primary supervisory responsibility for US _________ and agencies of foreign banks among the three federal banking agencies, according to the type of license and whether the banking office has deposit insurance. In addition, the Federal Reserve was given broad authority for the supervision of all federal and state-licensed branches and agencies of foreign banks ________ in the United States. In fulfilling this responsibility, the Federal Reserve must assess the impact and condition of foreign banks operating across state lines. To carry out its ________, the Federal Reserve has statutory authority to examine the assets and liabilities of all branches and agencies, but it generally relies upon examinations that state and other federal banking authorities _______ . Under the Bank Holding Company Act and the International Banking Act, the Federal Reserve also has responsibility to approve, review, and monitor the

US non-banking activities of foreign banking organizations.

Words you may need:

enactment n введение закона в силу applicable adj применимый

"national treatment" национальный режим

(retail) deposit-taking прием вкладов от населения option n выбор, право выбора

apportion v распределять

statutory authority право, предоставленное законом; власть, предоставленная законом assets and liabilities активы и пассивы

DISCUSSION

Ex. 12. a) Read and discuss the texts.

b)Single out the main facts from the texts and present them in a short essay.

c)Give your answer to the question in the title.

a) Is Monetary Policy Needed?

Many people believe that central banks should conduct an active, interventionist monetary policy even though most countries are abandoning other forms of state intervention in their economies, such as price controls, income policies, and industrial planning. These and other forms of intervention, such as agricultural policies and state ownership of business enterprises, waste economic resources and distort markets.

Monetary policy, which represents government intervention in the marketplace for credit, exhibits the same negative effects. The time has come to challenge the need for monetary policy as practised by central bankers (often with finance ministry guidance). The financial markets, operating under appropriate tax and structural policies, will produce far greater price stability and smoother economic growth than central bankers can.

Some people still believe that controlled growth of the money supply will minimise inflation. In fact, the quantity of money in the industrialised nations today is essentially demand-driven. Currency, a key component of the money supply, is demand-driven when people can easily exchange unneeded currency for interest-bearing financial assets, such as bank deposits and bonds. Currency-driven inflations occur only when governments finance their deficits by paying their obligations in currency that cannot be converted easily into other assets.

Bank deposits, the main component of the money supply in the industrialised countries, are demand-driven as well. This demand reflects the willingness of individuals and businesses to provide credit to the economy in which they operate, versus investing in real assets or moving funds to other countries.

Reserve requirements on bank deposits, still a favoured monetary policy tool of some central bankers, do not restrict bank lending.

As a practical matter, monetary policy in the industrialised world today essentially takes the form of announced official rates for lending to banks and central bank "steering" of short-term rates.

In effect, civil servants, called central bankers, tell participants in the highly competitive and increasingly internationalised financial marketplace what they, the civil servants, believe short-term interest rates should be.

The credit markets do not differ from other markets. Interest, like any other price, should clear the market at a rate that balances supply with demand.

Words you may need:

interventionist policy интервенционалистская политика abandon v отказываться от чего-л.

distort v искажать

exhibit v проявлять, показывать

demand-driven определяемый спросом, зависящий от спроса interest-bearing приносящий процентный доход

currency-driven inflation инфляция, являющаяся следствием объема валютных средств convert v конвертировать

versus prep против, в сравнении с

"steering" n управление, руководство civil servant государственный служащий credit market рынок кредитов

to clear the market (зд.) регулировать рынок

d) Say why the CBR is interested in the development and improvement of the payment system of Russia. b) Payment Systems

Public policy responsibility for the payment system usually rests with central banks. Central banks are naturally interested in the payment system because it is a key component of the operation of financial markets and has important implications for the trading efficiency of the real economy. Of particular concern to central banks is clearing and settlement in financial markets where trading results in large payment obligations, such as the securities, commodity, interbank funds, and foreign exchange markets.

The central bank also participates in the payment system as a provider of interbank payment services. The role of the central bank in operating the interbank system depends on the development of a nation's payment system.

The Central Bank of Russia, with the assistance of international experts, has taken steps to draft legislation and oversee the decentralized expansion of Russia's domestic payments system. Progress has included improvements in the Interbank Payments System, involving the use of computer-generated instructions with specialized software. An electronic payments system for cash settlement was installed in Moscow, where 65 per cent of total document turnover in Russia occurs. The so-called automatic payments system began with eight banks in September 1993. As of July 1994, about 60 banks and two cash settlement centers (all in the Moscow area) participated in the automatic payments system. Eventually, all banks will be part of this system. Efficiency at other cash settlement centers was improved, and growth was recorded in the number of both interbank settlement centers and networks of banks with cross-connecting correspondent accounts that act as settlements agents for associated groups of smaller banks.

Words you may need:

rest v (зд.) возлагаться (об обязательствах) software n компьютерное программное обеспечение document turnover документооборот

cash settlement center расчетно-кассовый центр

cross-connecting correspondent accounts перекрестные корреспондентские счета

Ex. 13. Read the dialogue, sum up its content and act it out;

Correspondent: Mr. President, your government austerity program has been painful and controversial but it has transformed the country's financies, hasn't it?

President of the Central Bank: Yes, two years ago we embarked on stabilization program. As a result, the forint was devalued and a gradual "crawling peg" exchange rate mechanism was introduced. At the same time, we imposed additional taxation. All this was not very popular, you know.

Cor.: I remember that your labour unions were outraged.

Pr.: Not only. Many government supporters joined the opposition. But judging by recent developments, exports are surging, imports are going down and industrial output is rising. Besides, we have negotiated a standby facility with the IMF and received credit ratings from international credit rating agencies.

Cor.: True, but despite the economic progress, analysts are worried that you may not succeed in reducing your current-account deficit this year as planned.

Pr.: The most recent data on the current-account deficit reflect considerable improvement. The figures are in line with the projected trend. So we have no doubt that we'll meet our target for the year as a whole.

Cor.: How was the first quarter current-account deficit financed?

Pr.: It was covered by foreign direct investment and privatization revenues.

Cor.: You got more than $13 billion. Such large capital inflows can cause problems. What have you done to neutralize their negative impact or, as financial specialists put it, to "sterilize" them?

Pr.: The revenues from privatization are mainly used to reduce our external-debt burden. So they are fully sterilized without any problem. The situation regarding FDI is more complicated, because the money does not come into the state's hands. But we reduced quite substantially the net REPO position of the banking community. Next, we became more active players on the open market, selling huge amounts of government securities, and then we increased the banks' minimum reserve requirements.

Cor.: Interest rates for short-term Treasury bills in late May were about 24 per cent, compared with 32 to 34 per cent a year ago. Aren't you worried that rates are coming down too quickly, given the need to curb inflation and support your exchange rate policy?

Pr.: We can comfortably live with that drop, because the offered yields on government securities are still higher than the expected rate of inflation.

Cor.: Now that you have joined the OECD, your securities look very attractive. Are there any other financial benefits that came with your OECD membership?

Pr.: I'm sure you know, don't you, that many investment funds aren't authorized to invest in countries that are riot OECD members. So our membership has expanded the number of investors interested in us. What's more, they are all high-quality investors.

Cor.: International investors have long had a soft spot for Hungary. Yields on government securities are high, the secondary market is liquid, you have never even breathed the word "rescheduling". You were also able to lengthen your maturities and reduce interest rate spreads last year. What are your plans on the funding front for the coming year?

Pr.: Our average maturity is now longer than seven years. We are confident that spreads will come down further. Since the beginning of the year they have already fallen quickly on the secondary market from about 200 basis points to 100 over LIBOR.