Comprehension

1. Are the following statements true or false?

1. The economy can function without banking.

2. Banking is the process of accepting and protecting money owned by individuals and organizations.

3. Business banks deal directly with consumers and small business owners.

4. Private banks normally provide wealth management services to high net worth families and individuals.

5. Investment banks provide such services as mergers and acquisitions.

6. Privately owned banks are held by the state governments of the individual countries and they serve as a nation’s centralized bank.

7. Retail banks are responsible for monetary policy.

8. The corporate bank supervises and regulates the banking system.

9. The central bank prints and issues currency.

10. Investment banks can act as lender of last resort.

Vocabulary

2. Match the words with the definitions below.

1) bank	a) an institution which accepts deposits, makes business loans, and offers related services
2) financial markets	b) a company, piece of land, etc. bought by another company
3) interest rate	c) an organisation that provides various financial services
4) merger	d) the system of money that a country uses
5) banking	e) a rate which is charged or paid for the use of money
6) commercial bank	f) a mechanism that allows people and entities to buy and sell financial securities, commodities, and other items of value at low transaction costs and at prices that reflect supply and demand
7) currency	g) the process of accepting and protecting money owned by individuals and organizations
8) acquisition	h) the act of joining two or more organisations or businesses into one

3. Fill in the correct preposition.

1. Commercial or retail banks receive and hold deposits, pay money according … customer’s instructions, lend money, offer investment advice, exchange foreign currency and so on. They make a profit … the difference between the interest rate they pay … lenders and those they charge to borrowers.

2. Investment banks, often called merchant banks … Britain, raise funds for industry … the various financial markets, finance international trade. Investment banks make their profits … the fees and commissions they charge … their services.

3. A country’s minimum interest rate is usually fixed … the central bank. This is the discount rate, at which the central bank makes secured loans … commercial banks.

4. … most financial centers there are branches of lots … foreign banks.

4. Read the text and complete the sentences with words from the text.

Credit - transactions between two parties in which one (the creditor or lender) supplies money, goods, services, or securities in return for a promised future payment by the other (the debtor or borrower). Creditor is someone who money is owed to. Debtor is someone who owes money. Credit given is an indication of trust in that person to pay for the goods given or money lent. Credit transactions normally include the payment of interest to the lender. Credit may be extended by public or private institutions to finance business activities, agri­cultural operations, consumer expenditures, or government pro­jects. Most modern credit is extended through specialized fi­nancial institutions, of which commercial banks are the oldest and most important. The lender must judge each loan he makes on the basis of the character of the borrower (his intention to repay), his capacity to repay (based on his potential for earning income), and his collateral (property or other goods that you promise to give someone if you cannot pay back the money they lent you). Loan is an amount of money that you borrow from a bank. Customers and lenders may publicly regulate the terms of credit transactions to prevent abuses.

1. If the bank lends you money, you have a bank … .

2. Banks have higher … rates for borrows than for savers.

3. The bank refused further … to the company.

4. A bill of sale is a … security, as it is given as a guarantee for the repayment of a loan.

5. A borrower is a person that has applied, met specific requirements, and received a monetary loan from a … .

6. The government plans to increase … on health.

7. I think it was a profitable … .

8. The … is legally responsible for repayment of the loan.

9. Nowadays a bank’s main function is to be an intermediary between … and borrowers.

10. In England students can take out a … from the bank.