Finance and Credit Part I. Banks

Vocabulary

account – счет, расчет

bank – банк

bank lending – банковские ссудные операции

banker – банкир

banking – банковская деятельность

central bank – центральный банк

central bank – центральный банк

investment bank – инвестиционный банк

merchant (commercial) bank – коммерческий банк

mutual savings bank – взаимно-сберегательный банк

savings bank – сберегательный банк

retail bank – банк, занимающийся обслуживанием мелкой клиентуры

borrower – заемщик

budgeting – составление бюджета

building society – жилищно-строительное общество

carry out – осуществлять

checking account –чековый счет

clearing houses – расчетные палаты

collect cheques – инкассировать чеки

comprise – включать, заключать в себе

creditworthiness (solvency) – кредитоспособность

currency exchange – валютная биржа

current (running) account – текущий счет

deal in securities – торговать ценными бумагами

dealing – сделка

demand deposit – бессрочный вклад

deposit – депозит, вклад в банке

deposit account – депозитный счет

depositor – вкладчик

developed country – промышленно-развитая страна

discount bills – учитывать векселя

electronic cash till (cash dispenser/machine, automatic teller machine, cashomat) – банкомат

embrace – охватывать, включать

eurobond – еврооблигация

financial assets – финансовые активы

financial institution – финансовый институт

financial system – финансовая система

financing – финансирование

flow (flew, flown) – течь, перетекать

foreign exchange market – валютный рынок

fund – фонд; капитал; денежные средства;

funds – средства

insurance – страхование

interest – процент

interest rate – процентная ставка

interest-free loan – беспроцентная ссуда

intermediary – посредник

issue banknotes – выпускать денежные знаки

license – лицензировать, выдавать лицензии

link – связывать

loan – заем, ссуда

locate – размещать, располагать в определенном месте

long-term loan – долгосрочная ссуда

maintain – удерживать, поддерживать

ministry of finance – министерство финансов

mortgage – закладная, ипотека

network – сеть

on-line banking – онлайновые банковские операции

percentage return – доход в виде процента

perform a function – осуществлять функцию

private account – счет частного лица (фирмы)

saver – вкладчик

securities – ценные бумаги

share – акция

stock exchange – фондовая биржа

stockbroker – биржевой брокер

supervise – контролировать, осуществлять надзор

take charge of clients’ valuables – брать на хранение ценности клиентов

time deposit – срочный вклад

to deposit – класть в банк, делать взнос

to draw (to receive) interest – получать проценты

to loan (to lend) – давать взаймы, одалживать

to make a loan – взять ссуду

to make a transaction – заключать сделку

to pay off (to repay) a loan – вернуть

to transfer – осуществлять перевод средств

transaction (deal) – сделка, операция

transfer – передача, перевод

transfer money – переводить денежные средства

transfer of funds – перевод средств

vault – хранилище

Vocabulary Exercises

Exc. 1. Make up at least 10 word-combinations using the following words:

rate pension cash mutual account

bank checking deposit loan savings

to make money time to invest

fund transaction interest till electronic

Exc. 2. Match the terms to their definitions.

payment for the credit stated by the bank a business deal, especially a sale or purchase a bank that acts as an intermediary between companies and the investing public the large amount of money collected an arrangement between a bank and a customer under which the customer deposits with the bank a sum of money a machine from which the customer of a bank can obtain cash in bank-notes up to a certain value at any time of day or night putting a cash card into it a contract by which money is borrowed to buy a house or some other property

transaction electronic cash till fund account interest rate investment bank mortgage

Exc.3. Cross one out.

1. transaction, deal, account, bargain

2. to loan, to lend, to credit, to borrow

3. to put in, to deposit, to establish, to invest

4. central, retail, savings, discount

Exc.4. Fill in the blanks with the following words:

fund, account, bankrupt, lend, interest

1. We will have to close the factory – our company is _________.

2. The best rate of ________ the banks can offer is around 14 per cent.

3. The bank doesn’t ________ her the money to buy the car because she has a bad credit record.

4. They used this money to set up a ________ for the refugees.

5. Some banks make it difficult to open an _________.

Exc.5. Match the groups of words in column A to the words in column B.

A	B
1) checking private current	a) fund
2) time demand fixed	b) deposit
3) commercial investment universal	c) money
4) pension mutual charity	d) account
5) to invest to put in to fund	e) bank

Exc.6. Match English words and phrases with their Russian equivalents.

1) private account	a) банкомат
2) time deposit	b) ипотечные банки
3) cash till	c) счет частного лица
4) low-interest loan	d) положить деньги в банк
5) financial transactions	e) денежные средства
6) monetary funds	f) срочный вклад
7) mortgage banks	g) финансовые операции
8) to deposit money in a bank	h) ссуда под низкий процент

Text 1. The Financial System

Task 1. Read and translate the text.

The financial system of a developed country is a network of financial institutions comprising organizations carrying out and regulating financial activities, the ministry of finance, the treasury, the central bank, the tax service, stock and currency exchanges.

Financial activities embrace budgeting, financing, investment, banking, taxation and insurance. Financial assets flow in the system from savers, who act as sources of funds, to borrowers, who use them. Savers and borrowers in the system are linked by financial intermediaries – banks, finance, investment and insurance companies. Banks occupy a central place in any financial system.

Historically the heart of financial services industry in Britain has been located in the famous “Square Mile” in the City of London. The City is one of the largest financial centres in the world.

There re more overseas banks in the City than in any other financial centre. The banking sector in Britain accounts for about a fifth of total international bank lending.

The world’s largest financial markets – the London Stock Exchange, the Foreign Exchange Market, the Financial Futures and Options Market, eurobond and Eurocurrency markets, the world’s largest international insurance market – are also located there.

Note on the Text

…”Square Mile” in the City of London. – … «Квадратная миля» в Лондонском Сити

future – фьючерс

option – опцион

Task 2. Comprehension questions

1. What does a financial system comprise?

2. What do financial activities embrace?

3. Who are the savers and borrowers linked by?

4. What is the “Square Mile”?

5. What financial markets are located in London?

Task 3. Find English equivalents for the following Russian phrases:

- финансовая система развитой страны

- сеть финансовых институтов (организаций)

- осуществлять и контролировать финансовую деятельность

- министерство финансов

- казначейство

- налоговая служба

- фондовые и валютные биржи

- финансовая деятельность охватывает

- финансовые активы

- вкладчики

- источники финансовых средств

- заемщики

- финансовые посредники

- занимать центральное место

- иностранные банки

- составлять (часть чего-л.)

- банковские ссудные операции

- рынок финансовых фьючерсов и опционов

- рынок еврооблигаций

- страховой рынок

Task 4. Give derivatives of:

financial

organization

regulating

taxation

saver

borrower

investment

insurance

service

lending

located

Task 5. Read the text and translate it into Russian. Say what role banks play in any financial system.

Banks play a very important role in any financial system. Most typically banks open accounts for their clients and receive money on current and deposit accounts. These funds are used by them to provide loans or for investment. Apart from these functions bankers perform many other functions of great value to their clients. Banks collect cheques, discount bills of exchange, transfer money, buy and sell securities for their clients, take charge of their clients’ valuables.

As a rule, commercial banks in a country are supervised by the central bank, which acts as the government’s banker. Among other functions central banks have the sole right to issue banknotes and to license retail banks.

Words and word combinations you may need

apart from – не говоря уже о, кроме, не считая

have the sole right – иметь монопольное право

Task 6. Match the infinitives in A with the nouns in B.

A B

to carry out and to regulate a place

to perform loans

to license activities

to occupy funds

to buy money

to borrow intermediaries

to issue a role

to use banknotes

to act as an account

to play bills

to open a function

to provide cheques

to collect currency

to discount banks

Text 2. The Stock Exchange

Task 1. Read and translate the text.

A stock exchange is a highly organized financial market where bonds, shares and other securities can be bought or sold.

Stock market business is worldwide. London, Johannesburg, New York, Melbourne, Tokyo, Calcutta, Paris, Amsterdam and Brussels are all famous centres of stock exchange activity.

The function of a stock exchange is to put those who wish to sell securities in touch with those who wish to buy them.

The London Stock Exchange plays a vital role in maintaining London’s position as a major financial centre. London has had a stock exchange for dealing in different securities for over 200 years, its first building was constructed in 1801. Then, in 1853 a new building was constructed on the same site. But to keep pace with modern requirements and to provide the most up-to-date facilities for both members and investors it was decided once again to rebuild the Stock Exchange on the same site. Work started in 1966. The Stock Exchange was completed in 1972.

As a result of legal reforms implemented in 1986 and known as “Big Bang”, the Exchange has changed radically over recent years. The most fundamental change has been the move away from the traditional market floor to screen-based trading. Now stockbrokers deal in securities through telephones and computers which have linked London much more closely with the other major international financial centres.

Note on the text

to deal in – торговать

to deal with – иметь дело с чем-либо

vital role – жизненно важная роль

keep pace with – идти в ногу с

“Big Bang” – «Биг Бэнг» («Большой взрыв» – реорганизация Лондонской биржи)

radically – радикально

screen-based trading – электронная торговля

Task 2. Comprehension questions

1. What is a stock market?

2. What function does a stock market perform?

3. Had the London Stock Exchange moved to different places and different buildings over more than 200 years of its existence?

4. What reform of the London Stock Exchange was implemented in 1986?

Task 3. Find in the Text English equivalents for the following Russian words and phrases:

- покупать и продавать облигации;

- акции и другое ценные бумаги;

- сводить вместе желающих продать и желающих купить ценные бумаги;

- играть жизненно важную роль;

- удерживать положение;

- идти в ногу с современными требованиями;

- обеспечить cовременными условиями для работы;

- было решено;

- осуществлять реформы;

- продавать и покупать ценные бумаги с помощью телефона и компьютера.

Task 4. Write out from the text international words, transcribe and translate them into Russian.

Task 5. a). Read the text and translate it into Russian. b). Say whether you agree with the assessment of the Russian stock market given in the text.

At present, the Russian stock market does not fully meet the Russian economy’s development requirements. The task of the market to accumulate savings and to transform them into investments in the real economy is not fulfilled effectively. Few securities are traded in the market. It is believed, however, that the market has a tremendous potential. If risks are lowered and a favourable investment climate is created in Russia, our market will become attractive to Russian and foreign investors.

Words and word combinations you may need

task – задача

accumulate – накапливать

transform – трансформировать, преобразовывать

trade – покупать и продавать ценные бумаги

lower risks – снижать риски

tremendous – огромный

Task 6. Match the infinitives in A with the nouns in B.

A B

to meet a climate

to accumulate savings

to fulfill a task

to sell requirements

to implement construction

to play facilities

to deal in a house

to rebuild bonds

to provide reforms

to have securities

to complete a role

to create a potential

For the next session

Task 1. Read and translate the text.

Banks

If you work, you’ve probably got a bank account. You could keep the money you earn each month in a box under your bed but it wouldn’t be very sensible. One reason is that it’s not very safe. If your house gets burgled you’ll lose everything you’ve saved. Another reason is that your money will lose value.

As price rise, the money in a box under your bed will be able to buy fewer and fewer things. Money in a bank savings account, however, will earn interest. The interest will help compensate for the effect of inflation. But banks are more than just safe places for your money. What other services do they offer?

The other main service is lending money. Individuals and businesses often need to borrow money and they need a lender that they can trust. This is exactly what banks are – reliable lenders. In fact, most of the money that people deposit in their bank accounts is immediately lent out to someone else.

Apart from storing and lending money banks offer other financial services. Most of these are ways of making money more accessible to customers. For example, banks help people transfer money securely. They give customers cheque books and credit cards to use instead of cash. They provide ATM machines so that people can get cash any time of the day or night.

But how do banks make a living? Basically, they make a living by charging interest on loans. Of course, when you make a deposit into a bank savings account, the bank pays you interest on that money. However, the rate they pay savers is less than the rate they charge borrowers. The extra money they make by charging interest on loans is where banks earn most of their money.

For banks, interest is also a kind of security. Sometimes people do not pay back money they borrow. This is called defaulting on a loan. When someone defaults on a loan the bank uses money earned from interest to cover the loss.

All of this means that most of the money people have saved in the bank is not there at all. A small amount of the total savings is kept by the bank so that customers can make withdrawals. The rest, however, is made available for loans. The amount that is kept is called the reserve. The reserve must be a certain percentage of all the savings received from customers – for example 20 per cent. This figure is set by the central bank and this is one of the ways that governments can control the amount of money circulating in the economy.

Task 2. Now read the text again and answer these questions in your own words.

1. What two reasons are given for saving your money in a bank account?

2. Why do people prefer to borrow money from banks?

3. Do banks do anything else for their customers other than store and lend money?

4. How do banks earn money?

5. Who decides how much money the bank keeps in reserve?

Speaking

Give a two-minute presentation on the history of money. First, read through text 1 again and make notes below on the following.

• bartering

• commodity money

• fiat money

You can also include recent developments not mentioned in the text, such as credit cards and digital money.

Writing

Write a promotional leaflet for a bank. The aim of the leaflet is to attract new customers and to inform existing customers about the services the bank offers.

Use an informal, friendly style like you see in advertisements. Organise the leaflet using the plan shown here.

Promotional Leaflet

Paragraph 1

Give a brief history of the bank and say how big it is today (to give confidence to customers).

Paragraph 2.

Explain what your main services are and what advantages you offer compared to other banks (for example, interest rates).

Paragraph 3.

Say what other services you offer and how they can be useful to your5 customers: for example, special savings schemes for certain people (students / pension schemes for workers) and Internet banking.

Paragraph 4.

Say how customers (or potential customers) can contact the bank (e-mail, web page, phone number, local branches, etc).

Write 200-250 words.