Экономические

SAVINGS AND LOAN ASSOCIATIONS

Savings and loan associations (S & Ls) obtain funds primarily through savings deposits and time and checkable deposits. The acquired funds have traditionally been used to make mortgage loans. S& Ls are the second largest group of financial intermediaries, numbering in the USA around 2000. In the 1950s and 1960s, S & Ls grew much more rapidly than commercial banks, but when interest rates climbed sharply from the late 1960s to the early 1980s, S & Ls encountered difficulties that slowed their rapid growth. Because many mortgages are long-term loans, with maturities in excess of 25 years, many in existence today were made years ago when interest rates were substantially lower. When interest rates rose, S & Ls frequently found that the income from their mortgages was well below the cost of acquiring funds. Many of them began to suffer large losses; many have gone out of business. Until 1980, savings and loan associations were restricted to making mortgage loans and could not establish checking accounts. Their troubles encouraged Congress to pass legislation in the early 1980s allowing them to offer checking accounts, make consumer loans, and pursue many activities previously restricted to commercial banks. In addition, they are now subject to the same requirements as the commercial banks regarding deposits with the Federal Reserve Banks. The result of this legislation is that the distinction between savings and loan associations and commercial banks is being blurred, and these intermediaries have become more competitive with each other.

MUTUAL SAVINGS BANKS

Mutual savings banks are very similar to savings and loan associations. They raise funds by accepting deposits and use them primarily to make mortgage loans. Their corporate structure is somewhat different from that of S & Ls in that they are always structured as “mutuals”, which means that they function as cooperatives. The depositors own the bank. Like savings and loan associations, until 1980 they were restricted to making mortgage loans, and they suffered similar problems when interest rates rose from the late 1960s to the early 1980s. They were similarly affected by the banking legislation in the 1980s and can now issue checkable deposits and make loans other than mortgage loans.

CREDIT UNIONS

These financial institutions are very small cooperative institutions organized around a particular group: union members, employees of a particular firm, and so forth. They acquire funds from deposits and make consumer loans. Thanks to the banking legislation in the 1980s, credit unions too are allowed to issue checkable deposits and can make mortgage loans in addition to consumer loans.

Составьте предложения, используя слова в скобках. Переведите предложения.

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1.Deposits are (placed, bank, money, in, a, account).

2.The depositors (banks, the, mutual, own, savings).

3.Uses of funds of commercial banks are (municipal bonds, loans, business and consumer, mortgages, government securities, and).

4.Commercial banks raise funds by (deposits, savings, issuing checkable, deposits, and, time deposits).

5.Commercial banks use their funds (commercial, loans, to make, consumer, and, mortgage).

6.Savings and loan associations traditionally (loans, funds, use, their, to make, mortgage).

7.Mutual savings banks (deposits, accepting, raise, funds, by).

8.Sources of funds of (banks, commercial, and, savings, loan, associations, mutual, banks, savings, and, credit unions) are deposits.

9.Credit unions acquire (consumer, deposits, from, funds, and, make, loans).

10.Depository institutions are (accept, financial intermediaries, that, deposits, individuals and institutions, and, make, from, loans).

11.Thrift institutions are (associations, savings, and, banks, loan, savings, or, unions, credit).

12.Government securities (government, issued, securities, are, by, a).

13.Commercial banks (loans, accounts, specialize, in, checking, and, short-

term).

14.Banks play (money, a, role, creation, critical, in, of).

UNIT 18

BANK OF ENGLAND

The Bank of England was established privately in 1694 and chartered by the government in return for a loan. The bank was also allowed to issue its own notes. Although started as a private bank, it gradually evolved into a Central Bank.

The Bank of England was the first central bank. It serves as the banker to the government of the United Kingdom, with sole authority to issue notes in England and Wales, and also as the banker to the country’s commercial banks. Until 1946 the bank was privately owned, but it had long governed its operations in the national interest.

From its founding in 1694 it acted as the government’s banker, lending it money to fund the national debt. It soon acquired a practical monopoly of the note issue; eventually other banks began keeping deposits with the Bank of England and using it as a clearing house for their transactions with one another. By the 19th century, the Bank of England had become a “banker’s bank”. It had also acquired another function associated with central bankingthat of being the “lender of last resort”, to which other banks could turn for aid when they were hard pressed.

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During the 19th century the Bank of England developed techniques for regulating interest rates and the amount of credit issued by itself and by the banking system generally. As the leading bank in the world’s leading financial center, its actions were considered critical in maintaining the international gold standard. By adjusting its discount rate, that is, the interest it charged on loans to commercial borrowers, it was able to affect the international flow of short-term capital. An increase in the discount rate would attract money to London and at the same time discourage borrowers; a reduction in the discount rate would have the opposite effect.

The Bank of England was nationalized in 1946.

Today the bank is able to adjust the country’s supply of money through the purchase and sale of securities. It also controls interest rates and sets limits on the amount of bank credit.

Вставьте пропущенные слова. Переведите предложения.

Banknotes; monetary; central; reserve; group; debt; merchants; deposits; discount houses; financing.

The Bank of England is the British _____ bank, which was nationalized in 1946. It was originally incorporated in 1694, being set up by a ____ of London

___. Since the mid-19th century it has been the only bank authorized to issue ____. The Bank conducts ___ policy through open-market operations (acting as lender of the last resort to the …), and through regulation of the supply of credit by way of the high interest rate it charges on special ___ called from the commercial banks. The Bank is also responsible for ___ the notional __ and for holding the country’s gold ___.

UHIT 19

TAXES. DIVIDENDS

TAX a rate or sum of money assessed on a person or property for the support of the government, and commonly levied upon assets or real property (property tax), or income derived from wages, etc. (income tax), or upon the sale or purchase of goods (sales tax).

AD VALOREM TAX (VALUE ADDED TAX)

AD VALOREM TAX (VALUE ADDED TAX) a tax imposed upon the difference between the cost of an asset to the taxpayer and the present fair market value of such asset; a tax based on a percentage of the value of the property subject to taxation, as opposed to a specific tax, which is a fixed sum applied to all of a certain class of articles.

CAPITAL GAINS TAX

CAPITAL GAINS TAX (UK) – foreign currency bank accounts owned by persons not domiciled only in the UK and situated in the UK for the purposes of capital gains tax.

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ESTATE TAX (INHERITANCE TAX; TRANSFER TAX)

ESTATE TAX – tax upon the transfer of property, not upon the property itself; estate taxes imposed upon the net value of decedent’s estate. Estate taxes are based upon the power to transmit or the transmission from the dead to the living. The same tax result is accomplished in some jurisdiction through imposition of INHERITANCE TAXES which are taxes imposed upon the receipt of the deceased’s property by the beneficiary. Estate taxes and inheritance taxes are both forms of TRANSFER TAXES which are taxes levied upon the passing of title to property.

ESTIMATED TAX

ESTIMATED TAX generally, income taxes paid periodically by a taxpayer on income not subject to withholding taxes, in an amount based upon the taxpayer’s projected liability.

EXCISE TAX

EXCISE TAX a federal tax imposed upon the purchase of certain items. FRANCHISE TAX

FRANCHISE TAX a tax generally imposed by the states upon corporations. Often, the franchise tax is divided into two components: (1) a tax upon the net income of the corporation attributable to activities within the state; and (2) the tax on the net worth of the corporation located in the state.

INCOME TAX

INCOME TAX a tax imposed upon income received which is recognized for tax purposes by the taxpayers, reduced by the allowable deduction and credits.

PROGRESSIVE TAX

PROGRESSIVE TAX a tax in which rate increases as the amount subject to tax increases. For example, a progressive income tax would be a tax at which on lower income levels the rate of tax was lower than the rate of tax on higher income levels.

PROPERTY TAX

PROPERTY TAX generally, tax imposed by municipalities upon owners of property within their jurisdiction based upon the value of such property.

PROPORTIONAL TAX

PROPORTIONAL TAX a tax imposed at a fixed and uniform rate in proportion to the property subject to the tax.

REGRESSIVE TAX

REGRESSIVE TAX a tax in which rate decreases as the amount to which the tax is applied increases.

SALES TAX

SALES TAX a tax generally imposed by state or local government on the sale of certain items that are generally not for resale. In general, the sales tax is at a set rate regardless of the purchase price of the property.

UNIFIED ESTATE AND GIFT TAX

UNIFIED ESTATE AND GIFT TAX a federal tax imposed upon the net value of an estate and on gifts of certain amounts. The transferor is liable for the gift taxes but if the transferor fails to pay the gift tax, the transferee may be held liable for its payment.

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USES TAX

USES TAX a tax imposed upon property purchased in one jurisdiction but brought into another jurisdiction. The jurisdiction imposing a “use tax” does so to curtail out-of-state purchases made for the purpose of avoiding sales taxes. The rate of a use tax is generally the same as the rate of a sales tax.

WITHHOLDING TAX

WITHHOLDING TAX the amount of income tax withheld from a payment of income. For example, an employer is required to withhold taxes from an employee’s salary when the salary is paid to the employee. The amount withheld is a credit against the amount of income taxes that the employee must pay on income earned for the taxable year.

INTEREST

INTEREST in commercial law, consideration paid for the use of money loaned or forbearance in demanding it when due. Interest is a means of compensation, and expresses a formula consisting of the amount charged (a percentage), the amount loaned, and the time involved.

COMPOUND INTEREST

COMPOUND INTEREST-interest paid not only upon the principal sum, but also upon the interest previously paid on that sum. Thus, interest already paid or accrued becomes part of the principal, for purpose of subsequent interest calculations.

INTEREST RATE

INTEREST RATE the amount of interest paid, usually expressed as a percentage of the amount of the underlying debt.

DIVIDEND

DIVIDEND profits appropriated for division among stockholders. The amount any stockholder receives depends upon whether the stockholder owns common or preferred stock.

CUMULATIVE DIVIDEND

CUMULATIVE DIVEDEND a dividend which provides that, if at any time it is not paid in full, the difference shall be added to the following payment.

EXTRAORDINARY DIVIDEND

EXTRAORDINARY DIVIDENDS – “ordinary dividends” are usual or customary dividends (such) as 6 percent, or sum per share, paid at regular periods, while “extraordinary dividends” may assume unusual form and amount, paid at irregular intervals from accumulated surplus or earnings, and require investigation into their source and apportionment according to equitable principles rather than application of common law rule that a dividend belongs to the party entitled to it at the date of its declaration.

PREFERRED DIVIDEND

PREFERRED DIVIDEND fund paid to one class of stockholders in priority to that to be paid to another class.

SCRIP DIVIDEND

SCRIP DIVIDEND a dividend not payable in cash, but in certificates of indebtedness which give the holder certain rights against the corporation.

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STOCK DIVIDEND = SCRIP DIVIDEND

STOCK DIVIDEND a dividend paid not in cash, but in stock so that each stockholder obtains a greater absolute number of shares but the same relative number of shares.

UNIT 20

FINANCIAL ACCOUNTING

BALANCE SHEET

The balance sheet is a statement of the financial status of the firm as recorded by accountant. It gives a picture of the financial affairs of a firm at a particular moment in time. It tells little of how the firm arrived at this situation, but it does not tell where the firm is as of the date of the statement within the limitations of the accounting records.

STATEMENT OF FINANCIAL POSITION = POSITION STATEMENT = STATEMENT OF CONDITION

The financial statement referred to as the balance sheet is also known as a statement of financial position or position statement. The terms refer to the same report and are frequently used interchangeably. The use on the term position statement to describe the statement places a burden on the accountant which the term balance sheet does not. The title balance sheet merely implies that the statement reports the current status or balance of each item in the accounting records. The term position statement implies that the accountant is presenting a representation of the economic position on the company.

ASSETS, EQUITIES, LIABILITIES

The resources owned by a company are called assets, and the interests, of the various claimants in the assets are called equities. The total assets must equal the total equities. The equity section of the position statement is sometimes labeled Liabilities and Owners’ Equities. This is also correct; it is somewhat longer than the term Equities, but it is also more descriptive. The right-hand side of the position statement consists of two basic types of claims, the claims (or rights) of the owners and the claims of the creditors. The term equity or equities is commonly used by business managers to refer to the claims of only the stockholders rather than of stockholders plus creditors. This double usage of a term makes the communication problem between accountants and nonaccountants more complex. Assets are the resources owned by a business entity, the value of which can be objectively determined. Included are any cost factors that have been incurred which can reasonably be expected to benefit future period.

REVENUE, INCOME

Frequently there is confusion concerning the terms revenue and income Revenue is a gross concept and is measured by the assets received (or reduction in

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liabilities) in return for goods and services that are sold. The equities of the owners are not increased by the total revenues, but are increased only by the amount left over after deduction the expenses and losses incurred while going the revenues. The residual is called income. The terms revenue and income cannot be used interchangeably. One could define income in terms of the improvement in economic condition from one point in time to a second point in time. If the firm has $ 1,000,000 of stockholders equity at the beginning of the period and $ 1,200,000 at the end (excluding capital transactions such as dividends or additional investments by stockholders) we would conclude that the period was $ 200,000. This income figure would indicate how much “better off” the stockholders were as a result of the period’s operations, if the two measures of stockholders equity were stated in terms of current economic value. This would be a much broader definition of income than the accountant employs, however. It would require that all assets and liabilities be revalued each period. The definition used by the accountant is more objective and is apt to result in more consistent results through time and among firms.

STATEMENT OF INCOME = THE INCOME STATEMENT

The income statement shows the results of operations for a period of time. Whereas the position statement is “As of” a particular moment, the income statement is “For the Period Ending ___”. The period of time may be a year or any time rather than a moment of time. It is essential that the income statement disclose the exact period covered, because the length of the period is a basic element of the interpretation of income. For example, a given income for one month would have a far different significance from the same income for a year. The income statement compares the revenues of the period with the expenses that were incurred to gain those revenues. The difference between the revenues and expenses plus losses is generally defined as the income of the period: Revenues- (expenses + losses) = income.

UNIT 21

PAYMENT SYSTEMS

CASH

Cash is popular for many types of payments in the United States because it is readily accepted, convenient, and anonymous. Because most of these transactions have a low value, cash transactions account for only 0,4 percent of the total value of all payments.

CHEQUES

Other than cash, the paper cheque is the most frequently used means of payment in the United States.

Because cheques are paper instrument, they must be transported physically between payers and payees and payer’s (collecting) and the payee’s (paying)

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banks. Inherent in this process are delays, which contribute to float or uncollected funds.

AUTOMATED TELLER MACHINES

The use of ATMs has grown rapidly since their introduction in 1969.

They are now widespread in the United States, and most of the nation’s banks and thrifts, and to a lesser extent credit unions, provide ATM access to consumers. In 1987, about 151 million ATM cards were outstanding in the United States.

ATMs are typically installed at depository institutions, supermarkets, convenience stores, shopping centers, airports, and office buildings. Most installed machines are multipurpose machines, offering several of the following services: cash withdrawal, deposit, transfer between accounts, cash advance, direct access to a credit card account, bill payment, and balance inquire.

CREDIT CARDS

Credit cards are not true payment instruments because they do not result in a direct transfer of funds from the payer to the payee. In the case of bank cards, the cardholder is granted a loan by the card-issuing bank. The merchant’s bank pays the merchant, usually at a discount, and subsequently settles with the cardholder’s bank. Credit cards do, however, displace payment transactions by aggregating them into single daily or weekly payments to merchants and monthly payments for consumers.

Credit cards issued by financial institutions, travel and entertainment companies, and retailers are a safe and convenient substitute for cash and cheques.

CHEQUES

Approximately 30 percent of the cheques written in the United States are deposited with the depository institutions on which they are drawn. This percentage has risen in recent years as a result of bank mergers and acquisitions. The remaining 70 percent of cheques are deposited with another depository institution and must be collected from the institution on which they are drawn.

Interbank cheques are collected through local clearing house associations, correspondent bank arrangements, and the Federal Reserve.

Interbank cheques drawn on institutions outside the geographic area in which a depository institution is located may be deposited with correspondent banks or with the Federal Reserve.

Cheques cleared by the Federal Reserve and correspondent banks are processed on high-speed equipment that itemises, records, endorses, and sorts cheques based on information contained in the magnetic ink character recognition (MICR) line printed along the bottom of cheques. On average, this equipment processes 1000,000 items per hour.

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UNIT 22

TYPES OF COMMERCIAL PAPERS

PROMISSORY NOTE

A promissory note is a two party note, written by one party (the maker) promising to pay money to the other party (the payee) and must meet the following requirements:

1.It must be a written unconditional promise;

2.To pay a sum certain in money;

3.Payable to demand or at a stated future time;

4.Payable to the order of someone, or to bearer, whoever has possession. DRAFT (bill of exchange)

A draft, or bill of exchange, is an unconditional order by one party (the

drawer) on another party (the drawee) to pay a certain sum of money on demand or at a stated time to a third party (the payee) and is three party paper.

CHECK

A check is a draft drawn on a bank and payable on demand. CASHIER’S CHECK

Cashier’s check: a cashier’s check is drawn by a bank on itself ordering itself to pay a sum certain to the depositor or to the person designated by him.

CERTIFIED CHECK

Certified check: A certified check is a personal check of the bank’s depositor which the bank has certified that depositor has such amount on deposit.

BANK DRAFT

Bank draft: A bank draft is a check drawn by one bank upon another bank in which the first bank has money on deposit.

CERTIFICATE OF DEPOSIT

Certificate of deposit: A certificate of deposit is a written acknowledgement by a bank of receipt of money by a depositor and a promise to pay the holder of the certificate the amount deposited when the certificate, properly indorsed, is surrendered.

DOCUMENT OF TITLE (to goods)

Documents of title to goods developed in order that paper representing the title to such goods could be transferred between parties rather than the cumbersome actual transfer of possession of the goods. “Document of title” includes bill of lading, dock warrant, dock receipt, warehouse receipt, and any other document which in the regular course of business or financing is treated as adequately evidencing that the person entitled under the document has the right to receive, hold and dispose of the document and the goods it covers. It must represent that it was issued by a bailee, carrier or warehouseman, and must purport to cover goods in the bailee’s possession which are identified.

BILL OF LADING

A bill of lading is a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods, and includes an airbill.

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WAREHOUSE RECEIPT

Warehouse receipt is a receipt issued by a person engaged in the business of storing goods for hire.

STRAIGHT BILL OF LADING, DOCK WARRANT, DOCK RECEIPT “Straight” bill of lading is nonnegotiable and names the buyer as consignee,

in which case the carrier will deliver the goods to the buyer without requiring the surrender of the bill of lading.

LETTER OF CREDIT

A letter of credit is a document issued by a banker authorizing the banker to whom it is addressed to honour the extent of a certain amount and to charge the sums to the account of the grantor; or it may be worded so as to authorize the person to whom it is addressed to draw on demand, or at a currency, upon the banker issuing the letter, and the grantor undertakes, in the letter, to honour all drafts drawn in accordance with the terms of the credit.

UNIT 23

INFLATION

Inflation is generally defined as a persistent rise in the general price level with no corresponding rise in output, which leads to a corresponding fall in the purchasing power of money.

In this section we shall look briefly at the problems that inflation causes for business and consider whether there are any potential benefits for an enterprise from an inflationary period.

Inflation varies considerably in its extent and severity. Hence, the consequences for the business community differ according to circumstances. Mild inflation of a few per cent each year may pose few difficulties for business. However, hyperinflation, which entails enormously high rates of inflation, can create almost insurmountable problems for the government, business, consumers and workers. In post-war Hungary, the cost of living was published each day and workers were paid daily so as to avoid the value of their earnings falling. Businesses would have experienced great difficulty in costing and pricing their production while the incentive for people to save would have been removed.

Economists argue at length about the causes of, and “cures” for, inflation. They would, however, recognize that two general types of inflation exist:

–Demand-pull inflation;

–Cost-push inflation. Demand-pull Inflation.

Demand-pull inflation occurs when demand for a nation’s goods and servic-

es outstrips that nation’s ability to supply these goods and services. This causes prices to rise generally as a means of limiting demand to the available supply.

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