Exercises

Ex. 1. Answer these questions:

A.

1. What services do banks offer?

2. What is the nature of banking? How do banks earn a living?

3. Do commercial banks play a very important role in an economy?

4. What are the more recent developments in banking?

5. What banking policy can guarantee stability?

B.

1. What can prove the substantial progress made by the bank?

2. What can the success of the bank be attributed to?

3. What does the bank specialise in?

4. Are customers' service requirements changing? What are they now?

5. How does the bank respond to these changes?

6. Why and how was the bank restructured?

7. What is the biggest challenge for the bank at the moment?

Ex. 2. Give derivatives of:

definition n advance n competition n contract n

accept v intermediary n activity n substantiate v

lend v deposit n collect v progress n

borrow v acquire v commitment n withdrawal n

Ex. 3. Find English equivalents for the following Russian phrases from the text:

А. по определению; принимать деньги на хранение; ссужать деньги; предоставлять ссуды; финансовый посредник; депозитный счет; текущий счет; на различных условиях; удовлетворять по­требности; приобретать опыт; оценивать перспективы; выступать в роли посредника; покрывать издержки; разница между про­центными ставками; процентная ставка на заемный капитал; ставка ссудного процента; экономия, обусловленная ростом масштаба деятельности (производства); испытывать воздействие че­го-л.; принимать вклады, инкассировать и оплачивать чеки; учи­тывать векселя; открывать аккредитивы; выписывать дорожные чеки; предоставлять овердрафт; осуществлять операции с ино­странной валютой; предоставлять сейфовые услуги; по поруче­нию клиента; хранить в сейфе; возмещать по полной стоимости; иметь резервы; операции банков с широкой клиентурой; опера­ции крупных банков между собой; слияние банков; удовлетворять требованиям; снятие средств со счетов; с краткосрочным уведом­лением; норма кассовых резервов; коэффициент ликвидности; деньги до востребования; казначейские векселя;

В. значительный прогресс; доля ... на рынке; развивать инфра­структуру; подтверждать; прибыль до налогообложения; доход от основной деятельности; мелкие клиенты; ссуды и авансы кли­ентам; улучшить качество портфеля выданных ссуд; профессио­нальный опыт; проводить политику; приносить плоды; разраба­тывать и вводить в практику новые услуги; соответствовать по­требностям заказчиков; достигнуть цели; удобство ведения бан­ковских операций по телефону; приводить к чему-л.; ценить лич­ные контакты; расширять сеть; освобождать от рутинной работы; перестраивать работу; выручка; повышать безопасность; сделать структуру более гибкой; укрепить подразделения; управление ин­вестиционным портфелем; свести увольнения в связи с сокраще­нием штата до минимума; самая важная задача.

Ex. 4. Say in a few words what the main text is about. Use the opening phrases from Ex. 4 (Unit 1).

Ex. 5. Sum up the contents of the main dialogue. Use the phrases from Ex. 5 (Unit 1).

Ex. 6. Read the dialogue below, translate the Russian remarks into English and act it out:

Foreigner: In my opinion, the main objective of your crisis-hit banks is to achieve financial recovery. How do they set about this task?

Russian: Многие наши банки действительно находятся сейчас в сложном положении. Число вкладчиков значительно сократи­лось. Люди не доверяют банкам. Кроме того, банки должны более серьезно относиться к проводимой ими кредитной поли­тике.

F.: First of all, your banks should restore confidence of their clients by honouring their obligations. Then they must make their services more attractive to their clients.

R.: Что касается услуг, то наши банки, как правило, предлагают достаточно широкий круг услуг: они принимают средства во вклады, принимают и оплачивают чеки, осуществляют учет векселей, открывают аккредитивы, предоставляют ссуды, пре­доставляют кредит по овердрафту, продают и оплачивают до­рожные чеки, проводят операции с иностранной валютой, предоставляют сейфовые услуги, осуществляют операции с ценными бумагами, принимают на хранение ценные бумаги своих клиентов.

F.: In my country the customers' service requirements are changing. Increasing numbers of customers prefer the convenience of telephone banking. What about your country?

R.: Мне кажется, наши вкладчики более консервативны в этом отношении, хотя банкоматы и кредитные карточки также ши­роко используются. Кроме того, многие банки также расши­ряют сеть своих филиалов, что позволяет им уделять больше внимания непосредственному обслуживанию клиентов и ока­зывать им различные консультации.

F.: It also seems to me that your banks must be more flexible, must pay more attention to the improvement of management.

R.: Полностью с вами согласен. Принимая во внимание усиление конкуренции в банковском бизнесе, банки должны более ак­тивно заниматься управлением своих портфельных инвести­ций, сделками с иностранной валютой, должны готовиться к введению единой европейской валюты евро, к осуществлению операций с этой валютой.

F.: Yes, it's the biggest challenge for the world banking community.

Ex. 7. Discuss the kinds of banks described in the text and their functions.

In a country with a developed banking system there are different kinds of banks with widely varying activities:

They are:

1. The Universal banks. Those banks (commonly found in Switzerland, West Germany and the Netherlands) are allowed to do almost anything financial, from lending other people's money to underwriting, advising on investments, stockbroking, etc. Some frown on universal banking in the belief that it creates too many conflicts of interest within one bank. Can a bank give advice on a share for which it is the underwriter and also broker and banker to the issuer? That question has not stopped foreigners from wanting a Swiss bank account and taking their Swiss banker's investment advice.

2. The ordinary deposit banks. These include the commercial or joint-stock banks, large and small, some private banks. All these have direct contact with the public which deposits money with them and draws cheques on them.

3. The savings banks. The chief function of these banks is explained by their name. In old times savings banks were banks which accepted only the deposits of small savers. They did no business with industry and provided no money-transmission service, had no cheque-drawing facilities. These distinctions between savings banks and other banks are now being eroded.

4. The merchant banks, or "acceptance houses". Merchant banks are British banks which concentrate on advising companies about raising new capital and about buying or selling other companies. They do a bit of lending too. Some of them also specialize in fund management. Merchant banking is the business carried out over the last two hundred years or so by a small number of London-based institutions. The origins of merchant banking in London lie in the 18th century.

The name "merchant bankers" refers to their origin as mercantile houses specializing in the export of British products and the import of products from foreign countries. This involved remitting money from one country to another, and the bill of exchange on London became the means of financing the import and export trades, which allowed the vendor and purchaser of traded goods to achieve liquidity; the role of the merchant was to put its name to or to "accept" a bill, which was then discounted in the market. The skill of the general merchant was to assess the credit of the purchaser whose bill it had accepted. Trade arid its finance continued to form the backbone of their business and the growing significance of their ability to provide credit transformed a number of general merchants into merchant banks, specializing in accepting bills. In doing so they assisted London to become the world's financial centre: the bill of exchange on a London accepting house, denominated in sterling, became a means of settlement in trade throughout the world.

Merchant banks maintained excellent connections with leading British companies and frequently joined their boards. As a result, from the 1950s a small number of merchant banks, in addition to their acceptance business, came to dominate the business of corporate issues in the form of offers for sale of formerly private companies to the public, rights issues of equities and debenture issues. In these issues merchant banks acted both as advisers and as primary underwriters in guaranteeing a sale price to the vendor. Merchant banks took full advantage of the development of the Eurocurrency markets in London in 1970s, and were amongst the most active syndicators of currency loans to the international banking community. Merchant banks have built up a substantial business as investment managers on behalf of UK institutions, such as pension funds, as well as overseas governments and major institutions worldwide. They played a leading role in developing the international investment management industry in London.

5. The consortium banks. A consortium bank is a bank owned by a group of other banks from a number of different countries, no one of which owns a majority share. Consortium banks were children of the Euromarket. Born in the 1970s they gave smaller banks a way into the Euromarket hand in hand with bigger bank partners. The advantage to the bigger banks lay in their easier access to the big domestic customers of the smaller banks.

Some consortium banks continue to thrive by staying at the forefront of new financial techniques, acting as a type of merchant bank, some other were gobbled up by one or other of their shareholders.

Words you may need:

universal bank - универсальный банк

underwriting n - андеррайтинг, гарантирование размещения (ценных бумаг)

frown v - не одобрять, относиться отрицательно

to draw a cheque on a bank - выписать чек на банк

savings bank - сберегательный банк

distinction n - различие

erode v - размывать(ся), разрушать(ся)

fund management - управление финансовыми средствами

London-based - расположенный в Лондоне

mercantile adj - коммерческий, торговый

to remit money - переводить деньги (по телеграфу)

vendor n - торговец, продавец

purchaser n - покупатель

backbone n - хребет, основа

rights issues of equities - выпуск новых акций, предлагаемых акционерам компаний

debenture n - облигация (акционерной компании)

consortium bank - консорциальный банк

majority share - контрольный пакет акций

thrive v - процветать

gobble v (зд.) - поглощать (букв. пожирать)

Ex. 8. Read the dialogue, sum up its content and act it out: