Bank organization

The way in which a bank is organized and operates is determined by its objectives and by the type of economy in which it conducts its business. A bank may not necessarily be in business to make a profit. Central banks, for example, provide a country with a number of services, while development banks exist to increase the есоnomic growth of a country and raise the living standard of its population. On the other hand, the aim of commercial banks is to earn profits. They therefore provide and develop services that can be sold_: at a price that will yield a profit.

A commercial bank which provides the same range of services year after year is less likely to be successful than one which assesses changes in the demand for its products and which tries to match products to its customer's needs. New services are constantly being introduced and developed by commercial banks, and the full-service philosophy of many banks means that they are akin to financial supermarkets, offering a wide variety of services. However, not every bank may want to offer every kind of financial service.

Many banks offer a combination of wholesale and retail banking. The former provides large-scale services to companies, government agencies and other .banks. The latter mainly provides smaller-scale services to the general public. Both types of banking have three essential functions, which are:

• deposits

• payments

• credits

These three functions are the basis of the services offered by banks. They make it possible for banks to generate profits and to achieve their operating aims.

3. Stock exchange

Ex. 1. Read and translate the text:

Stock Exchange

Stock exchange is a market in which securities are bought and sold. There are stock exchanges in most capital cities, as well as in the largest provincial cities in many countries, and over twenty in Britain. The principal stock exchange in Britain is known as the Stock Exchange, and is located in Throgmorton Street in the City of London; the New York Stock Exchange is located in and is known as Wall Street. Continental European exchanges are often referred to Bourses. The economic importance of stock exchanges is that the facilitate saving and investment, first through making it possible for investors to dispose of securities quickly if they wish to do so and secondly in channelling savings into productive investments. Ready marketability requires that new issues should be made or backed by reputable borrowers or institutions, that information should be available on existing securities, and that should be both a legal frame­work and market rules to prevent fraud and sharp practice. Stock exchanges have their own rules and conventions, but their function­ing depends also on the existence of company and other law and financial intermediaries, such as the issuing houses.

The British Stock Exchange, founded in 1773, developed from informal exchanges in coffee houses in the City of London. It is man­aged by a council of members. There are some 3,500 members, who alone may deal or even enter the floor of the exchange.

Stock-brokers act as agents for the public and buy from and sell to jobbers. Members are formed into a declining number of companies and there are now only 192 broking firms and ninety-one jobbing firms on the London Exchange. Business is conducted entirely by word of mouth and although jobbers and brokers keep their own registers and may record details of a "bargain" (as all transactions are called) on the official list, they are not obliged to do so. Even today there are no official statistics of the volume of transactions, although prices at the exchange are widely available in the press. The market value of the securities quoted on the exchange is about £120 billion, of which rather more than half are foreign securities.

Index numbers indicating changes in the average prices of shares on the Stock Exchange are called share indices. The indices are con­structed by taking a selection of shares and "weighing" the percent­age changes in prices together as an indication of aggregate move­ments in share prices. Roughly speaking, a share index shows per­centage changes in the market value of a portfolio compared with its value in the base year of the index. Index numbers are published by several daily papers and weekly journals.

Ex 2. Answer the following questions:

1. What is stock exchange?

2. Where is the British Stock Exchange located?

3. Where is N.Y. Stock Exchange located?

4. What is economic importance of stock exchange?

5. What are the requirements of ready marketability?

6. What does the functioning of stock exchanges depend on?

7. In what way do the duties of brokers differ from these of jobbers?

8. What do share indices indicate?

9. How are share indices constructed?

10.Where can you find index numbers?

MANAGEMENT

Ex. 1. Read the following words:

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key efficient organize basic management

achieve activity resource state knowledge

believe definition important waste objective

employee physical perform main stingy

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manage organization research efficient emphasize

balance highlight conserve organization phrase

valuable financial firm definition physical

asset survive purpose relationship

adapt provide serve financial

rapidly apply

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threat choice goal theory science quality

effective employ process material environment