Vocabulary

intermediary - посредник

сash assets – денежные активы

commercial and industrial loans – ссуды торгово-промышленным

предприятиям

secured loan – обеспеченная (товарными ценностями) ссуда

unsecured loan – необеспеченная ссуда (для первоклассных компаний,

пользующихся полным доверием у кредиторов)

collateral – имущественный залог

line of credit – кредитная линия; договорённость (между фирмой и банком) о предоставлении кредита до определённого максимума, обычно в течение года

revolving line of credit – револьверная (возобновляемая) кредитная линия

revolving credit – револьверный кредит (банковский кредит, автомати-

чески возобновляемый вплоть до аннулирования)

installment credit – кредит с погашением в рассрочку

principal and interest – капитал и проценты

loan balance – остаток ссуды

government securities – государственные ценные бумаги

Treasury bills – казначейские векселя

vault cash – наличность в расходной кассе (сейфах); наличные деньги в банках

withdrawal – 1) снятие со счёта 2) отмена, аннулирование

reserve deposits – резервные депозиты

correspondent balances– остатки на корреспондентском счёте

cash items in the process of collection – денежные документы, подлежа-

щие проводке по счёту

controllable* liabilities – регулируемые обязательства (банковские обяза-

тельства, денежные выражения которых опреде-

ляет сам банк)

noncontrollable* liabilities – нерегулируемые обязательства ( банковские

обязательства, когда размер вклада

определяет сам клиент, а не банк)

** Термины «регулируемые» и «нерегулируемые» обязательства употребляются экономистами в их условном значении, так как реально банки контролируют все свои обязательства.

large (small) denomination time deposits – срочные вклады в крупных

( мелких) размерах

certificate of deposit – депозитный сертификат (банковский сертификат,

подтверждающий наличие в банке капиталов опре-

делённой фирмы, вид ценных бумаг)

equity capital = net worth – собственный капитал

interest rate – процентная ставка

prime interest rate – “прайм-рейт», привилегированная ставка

discount rate – учётная ставка, ставка дисконта

COMPREHENSION QUESTIONS

1. Why are commercial banks considered the most important kind of financial

intermediary?

2. Why are savings banks and savings and loan institutions referred to as

banks nowadays?

3. Specify the three categories bank assets fall into. Which one is the predo-

minant category of assets and why?

4. Name different kinds of loans banks make to their customers.

5. Characterize commercial and industrial loans. What is the difference

between secured and unsecured loans?

6. What is a line of credit? Why should companies arrange a revolving line of

credit?

7. Banks issue consumer loans in the form of installment credit and revolving

credit. Differentiate between these two. What is the most widely used form

of consumer revolving credit?

8. What is a key type of security held by commercial banks?

9. What bank assets can be named the most liquid ones? What is vault cash?

10. Define the key liabilities of banks.

11. Explain what a bank’s equity capital is.

12. Differentiate between the principal and the rate.

13. Imagine people pay 10 dollars for every hundred dollars they borrow.

What interest rate are they paying out then?

14. What does interest rate depend on?

15. What is the prime interest rate? How often does it change and why?

D. Banking in the Digital Age

In the area of money and banking, the development of cybertechnologies, which are computer-based techniques for linking savers, investors, traders, producers, and governments, has fundamentally altered the landscape. Millions of people are on the Internet at any given instant, learning about the financial news literally as it happens. At the click of a button, many of these people can now adjust their own financial positions within seconds after they see the news on their screens.

Nowadays, more and more people take advantage of electronic funds transfer systems (EFTS) – computerized systems for conducting financial transactions electronically. Many employers transfer wages directly from the company bank account to employee accounts. Electronic banking allows customers to withdraw money from their demand-deposit accounts using automated teller machines (ATMs). These electronic banking machines permit banking transactions on a 24-hour basis by entering personal access codes. By linking their ATMs with regional, national, and international ATM networks, banks can offer you the convenience of drawing out cash from an account or making deposits hundreds or thousands of miles from home. Newer ATMs will play a key role in implementing newer (electronic) forms of money, such as the debit cards – plastic cards that allow the bank to take money from the user’s demand-deposit account and transfer it to a retailer’s account, and smart cards – plastic cards that allow you to load money and information (such as your credit-card number, etc.) onto a small computer chip embedded in the card.

Today, many large commercial banks, along with smaller community banks, are becoming full-service financial supermarkets. The era of opening a simple passbook savings account is over. Today, a California fruit grower can borrow from a Japanese bank to finance exports to France, while a Pennsylvania manufacturer can issue securities through a Swiss investment banker to finance a plant in Singapore. Many businesses are turning to foreign banks as attractive sources of loans and expertise. The Bank of Tokyo, for example, lends money to multinational corporations based in the United States, and offers specialized services to help customers trade with Pacific Rim companies. In the twenty-first century, the subject of money and banking is unavoidably international. The U.S. banking system is now intricately linked to world financial markets. Financial booms and busts in such diverse locations as Mexico, the Philippines, Russia, and Argentina increasingly have direct effects on the bottom lines of major U.S. financial institutions. This trend toward such worldwide linkages will continue at a fast pace as business loans are increasingly made by telephone, as approved credit lines are increasingly marketed by direct mail, and as loan applications are increasingly submitted on the Internet. In fact, many loan approvals today are not made at a banker’s desk, but in sprawling computerized processing centers, lowering the cost of making loans from thousands to hundreds of dollars. Banking – industry experts project that within two to three years, computerized banking could begin to make traditional banking business ancient history.

Exhibit 2.4. The World’s Largest Banks

(Source: American Banker, July 12, 2003)

Rank Bank	Country	Assets ($ Billions)	Net Income ($ Millions)
1 Mizuho Holdings Tokyo	Japan	$1,281	5,807
2 Citigroup Inc.	United States	1,051	5,165
3 Sumitomo Mitsui Bank	Japan.	924	4,782
4 Mitsubishi Tokyo Financial Group	Japan	855	3,782
5 Deutsche Bank	Germany	815	2,448
6 Allianz AG	Germany	805	2,206
7 UBS AG	Switzerland	754	2,341
8 BNP Paribas Group	France	735	2,322
9 HSBS Holdings PLC	United Kingdom	695	1,950
10 J.P. Morgan Chase	United States	639	3,108

Exhibit 2.5. The Largest Banks of Russia

(Source: The Banker, 2004)

Regional Rank	World Rank	Bank	Total Bank Capital ($ billions)
1	152	Sberbank	2,809
2	179	Vneshtorgbank	2,353
3	352	Gasprombank	1,007
4	392	International Industrial Bank	886
5	482	MDM Financial Group	660
6	542	Vnesheconombank	541
7	552	Alfa Bank	519
8	640	Bank of Moscow	408
9	702	Globexbank	353
10	783	Rosbank	286
11	798	Ural Siberian Bank	277
12	828	Nomos Bank (Novaya Moskva)	259
13	834	NIKoil IBG Bank	255
14	905	TRUST Investment Bank	214