READINGText 1 1. Scan through the text “Bank and its classes”. A bank - is an institution that deals in money and its substitutes and provides other financial services. Banks accept deposits and make loans and derive a profit from the difference in the interest rates. They also have the power to create money. The two major classes of banks are commercial and central banks. Commercial banks accept savings deposits, make loans and other investments, and offer financial services that facilitate the exchange of funds among individuals and institutions. In addition to the profit derived from the difference in the interest rates, commercial banks charge fees for various services. Central banks are involved in the issue of money and maintain the country's foreign currency reserves. Central banks maintain the accounts of other banks and supervise their activities. Central banks act as bankers to governments, as the designers of monetary and credit policies, and as lenders of last resort to commercial banks in the case of a financial crisis. Central banks also play a significant psychological role as guarantors of the monetary system. Central banks may be nationalised organisations and are subject to government control, but some of them can have independence from governmental supervision. Notes: derive a profit - извлекать прибыль; savings deposit -сберегательный вклад на неопределенный срок под процент; issue - эмиссия; lender of last resort - последний кредитор в критической ситуации subject to – подчинять, подвергать(воздействию, влиянию и т.п.) 2. Restore the word order in the questions and answer them. 1) What meant by the term "bank" is? 2) What banks do accept? 3) What banks make do? 4) What banks derive a profit do from? 5) What do power banks have? 6) What the two major classes of are banks? 7) What commercial banks accept do? 8) What do make commercial banks? 9) What commercial banks offer do? 10) What central banks are involved in? 11What central banks do maintain? 12) What central banks supervise do? 13) What central banks do act as? 14) What role central banks do play? 15) Are subject to central banks government control or not? 3. Agree or disagree to the following statements. 1) A bank trades in money. 2) A bank gives various financial services. 3) Banks receive deposits. 4) Banks don't make loans. 5) Banks derive a profit by skilfully deceiving people. 6) Commercial banks aid the exchange of funds among individuals and institutions. 7) Central banks act as bankers to organized crime. 8) Central banks act as the designers of default. 9) Central banks act as the designers of foreign policy. 10) Central banks act as lenders of last resort to counterfeiters. 11) Central banks play an important role as guarantors of the monetary system. 12) Central banks have the right to issue money. 13) Central banks keep the country's foreign currency reserves. 14) Central banks back up the accounts of other banks. 15) Central banks oversee the activities of other banks. 16) Central banks may be privately owned organisations. 17) Central banks are subject to shadow ministers. 18) Central banks are totally dependent on their bank customers. Text 2 1. Read the text “ Introduction to Banking and Financial Markets ” and find the information to answer the questions: - What are cash assets? - What does the balance sheet of a bank include? A commercial bank borrows money from the public, crediting them with a deposit. The deposit is a liability of the bank. It is the money owed to depositors. In turn the bank lends money to firms, households, or governments wishing to borrow. Commercial banks are financial intermediaries with a government license to make loans and issue deposits, including deposits against which cheques can be written1. Major important banks in most countries are included in the clearing system in which debts between banks are settled by adding up all the transactions in a given period and paying only the net amounts needed to balance inter-bank accounts2. The balance sheet of a bank includes assets and liabilities. We begin by discussing the asset side of the balance sheet. Cash assets are notes and coins kept in their vaults and deposited with the Central Bank. The balance sheet also shows money lent out or used to purchase short-term interest-earning assets such as loans and bills. Bills are financial assets to be repurchased by the original borrower within a year or less. Loans refer to lending to households and firms and are to be repaid by a certain date. Loans appear to be the major share of bank lending. Securities show bank purchases of interest-bearing long-term financial assets. These can be government bonds or industrial shares. Since these assets are traded daily on the Stock Exchange, these securities seem to be easy to cash whenever the bank wishes, though their price fluctuates from day to day. We now examine the liability side of the balance sheet which includes, mainly, deposits. The two most important kinds of deposits are sure to be sight deposits and time deposits. Sight deposits can be withdrawn on sight3 whenever the depositor wishes. These are the accounts against which we write cheques, thus withdrawing money without giving the bank any warning. Therefore, most banks do not pay interest on sight deposits, or chequing accounts. Before time deposits can be withdrawn, a minimum period of notification must be given within which banks can sell off some of their high-interest securities or call in some of their high-interest loans in order to have the money to pay out depositors. Therefore, banks usually pay interest on time deposits. Apart from deposits banks usually have some other liabilities as, for instance, deposits in foreign currency, cheques in the process of clearance and others. Notes: 1. to write cheques against the account – выписывать чеки против счета 2. to balance an account – уравнять, погасить счет; сбалансировать статьи расходов 3. on sight– по предъявлении (без предварительного уведомления) 2. Complete the sentences according to the text: 1.Banks borrow money from the public in order to... 2.The clearing system lets banks... 3.The asset side of the bank balance sheet includes... 4.The liability side of the balance sheet includes... 5.The two most important kinds of deposits are known as... 6.Cheques can be written against... 7.Interest is usually paid on... 8.To withdraw a time deposit one must give the bank a period of notification for the bank... Text 3 1. Scan through the text “Credit card and credit cardholders”. A credit card is a piece of plastic about 85mm by 54mm, bearing the name and computer number of the holder and the period of availability. The holder must sign it. The best known cards in the UK are the VISA card and ACCESS; the American Express and Diners' Club (introduced by the Diners' Club, Inc., in 1950) are leisure or entertainment cards as no credit is permitted. VISA is an international credit card scheme which has worldwide representation. Major banks in a number of countries have issued cards through VISA. ACCESS is the name given to a credit card company jointly owned by three banks, namely, Lloyds, Midland and National Westminster. The American Express Company issues American Express card whose holders have no limit placed on the sum they spend, but all outstanding debts must be settled by a given date. Any creditworthy mature person can be a credit card holder. Before a card is issued, certain details are supplied and references are given. On approval a credit card is given to the holder and the cardholder is at the same time notified of the maximum credit available to him / her. The credit card can be used at any retail outlet displaying the credit card company symbol. It is usual for settlement or partial settlement to be made by the credit cardholder within 25 days of receipt of the statement. Notes: availability - годность access - доступ outstanding - неуплаченный retail outlet - розничная торговая точка settlement - расчет receipt - получение statement – отчет reference (a letter written by someone who knows you well, usually to a new employer, giving information about you)- рекомендация 2. Work in pairs to answer the questions that follow. 1) What does a credit card bear? 2) What must the holder sign? 3) What credit cards are the best known ones in the UK? 4) What credit cards are leisure cards and why? 5) What are VISA, ACCESS and American Express cards known for? 6) Who can be a credit card holder? 7) What is supplied and given before a card is issued? 8) What is the cardholder notified of? 9) Where can a credit card be used? 10) What is to be made by the cardholder within 25 days of the receipt of the statement?
3. Agree or disagree to the following statements. 1)A credit card is a piece of wood. 2) A credit card bears the name of the owner. 3) A credit card bears the computer number оf the possessor. 4) A credit card bears the period of serviceable life. 5) The holder must subscribe to a credit card. 6) Holders have limit placed on the sum they can spend. 7) All debts must be settled by a given date. 7) Any solvent person can be a credit card holder. 8) Recommendations are to be given before a card is issued. 9) The cardholder is announced of the minimum сredit available to him. 10) A credit card can be used far and near. 11)A retailer is someone who sells things in a shop.
4. Complete the following statements. 1) A credit card is... 2) A credit card bears... 3) The holder must… 4) The best known cards in the UK are... 5) VISA is... 6)ACCESS is... 7) American Express card is known for its holders have... 8) Any creditworthy person can... 9) Before a card is issued... 10) The cardholder is notified of... 11) A credit card can be used... 12) The credit cardholder should make... within 25 days... 5. Translate the following text from Russian into English. Кредитная карточка - это выпускаемая организацией карточка, которая даёт её владельцу возможность делать покупки в кредит в тех предприятиях торговли, которые заключили с данной организацией соглашение (например, кредитная карта «Эксон» может использоваться на автозаправочных станциях). Существуют одноцелевые карточки, выпускаемые конкретными фирмами, многоцелевые кар точки (например, «Америкен экспресс», «Карт-бланш») и банковские карточки (например, «Мастеркард» и «Виза»). Владелец карточки - это лицо, которому выдана кредитная карта для использования в личных, семейных, домашних или коммерческих расчётах. Text 4
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