2. Review Questions

1. What was the function of the earliest banking? Comment on the origin of

the word “bank”.

2. Identify two major types of financial institutions.

3. What is the difference between depository and nondepository financial

institutions?

4. Name the main types of depository institutions. What functions do they

perform?

5. What types do nondepository institutions include? Specify their functions.

6. Explain the role of central banks in a country’s financial system.

7. What financial institution is considered the largest, oldest, and most

important in the majority of countries?

8. Define banking as business. What is the primary role of banks?

9. What are the main services commercial banks provide?

10. Name the three main categories of bank assets.

11. What type of loans do commercial banks make to businesses?

12. What is the difference between secured and unsecured loans?

13.. Name the types of consumer loans and explain the nature of installment

credit.

14. Differentiate between the principal and the rate.

15. What is a prime interest rate?

III. Vocabulary practice exercises

1. Match the terms on the left with their definitions on the right:

depository institutions	an agreed-on maximum amount of money the bank is willing to lend the business during a specific period of time
savings banks	loans backed up with something of value, known as collateral
central bank	bank account which pays little interest, but allows the holder to withdraw his cash with no restrictions
banking	the cost of borrowing money, expressed as a percentage of the loan per period of time
mortgage	loans to consumers that are repaid in equal periodic payments
line of credit	a secure box in a bank where customers can keep valuables
secured loan	amount of a debt, excluding any interest
installment credit	banks which offer savings accounts and specialize in mortgage lending
the principal	accounts with funds that usually cannot be withdrawn without advance notice; also known as time deposits
interest rate	a person who keeps money for the future in the bank, rather than spending it by consuming goods
prime interest rate	a person who receives money from someone or from a bank that will later have to be paid back
safe deposit boxes	financial institutions that accept deposits that can be converted into cash on demand
checking account	the bank that issues banknotes, carries out the government’s financial policy, and supervises all other banks of a country
saver	lowest rate of interest charged by banks to their most credit-worthy customers
borrower	the business of receiving, protecting, and lending money
savings accounts	banks that offer savings accounts and specialize in mortgage lending; also called savings & loan associations

2. Choose the necessary word or word-combination and put it in the sentence.

Translate the sentences into Russian.

total assets withdraw intermediate financial system rate of interest

credit cards deposits insurance company collateral transferred

1. The ---------- is the process by which money flows from savers to users.

2. One way in which funds can be ---------- between savers and users is

through financial institutions, such as commercial banks.

3. In the U.S., 7,900 commercial banks have ---------- of almost $7 trillion.

4. Banks raise funds by offering a variety of checking and savings ---------- to

customers.

5. Banks also issue Visa and MasterCard ----------.

6. It is unlikely that all depositors of any one bank will want to ---------- all of

their funds at the same time.

7. Banks make money primarily because the interest rate they charge

borrowers is higher than the ---------- they pay depositors.

8. Households and businesses buy insurance to transfer risk from themselves

to the ----------.

9. A commercial finance company supplies short-term funds to businesses

that pledge (отдают в залог) tangible assets such as inventory, accounts

receivable, machinery, or property as ---------- for the loan.

10. The primary role of banks is to ---------- between savers and borrowers.

3. The columns on the left word-box contain the terms used in banking. Try to

find their Russian equivalents listed in the columns on the right and enlarge

your active vocabulary.

electronic banking	дебетовая карта
automated teller machines (ATMs)	сотовый телефон
electronic funds transfer systems (EFTS)	личный идентификационный номер владельца кредитной карты
networked systems	беспроводные устройства
to access	банкомат
credit card	сетевые системы
debit card	электронная система платежей
personal identification number	электронные банковские операции
cash dispenser	онлайновые банковские операции
wireless devices	получать доступ
cell phone	автоматическая кассовая машина
online banking	кредитная карта

4. Change the Russian words and word-combinations for their English

equivalents given in exercise 3. Read and translate the text.