Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/studb20/public_html/index.php on line 4
 ¨ READ AND DISCUSS - English_for_Finance_and_Banking - Studbook
ГоловнаЗворотній зв'язок

Категорії

загрузка...

English_for_Finance_and_Banking

¨ READ AND DISCUSS

 

1. a) Supply the articles where necessary.

    b) Write down 3-5 questions about the text.

    c) Describe the principal instruments of credit policy.

 

Credit Policy

 

Credit policy is … component of economic policy. It is a combination of measures taken by Central Bank to affect the supply of credit. The aims of … credit policy may include stimulation or restriction of investment or consumer spending, … avoidance of price inflation.

Credit policy and monetary policy tend to be closely related and in some countries credit policy is regarded as … part of monetary policy.

Credit policy largely works indirectly. The Central Bank controls … amount of credit advanced by commercial banks through the interest rate policy, by influencing … liquidity, expanding or contracting the volume of Central Bank money. The principal instruments available for this purpose are … discount policy, minimum reserve requirements and open market operations. Direct credit control involving … establishment of credit ceilings is less frequently used now than in … past, many governments regarding it as … undesirable interference with the market mechanism.

 

Words you may need:

price inflation – цінова інфляція

the amount of credit advanced … – розміри кредиту, наданого …

discount policy – облікова політика

credit ceiling – межа кредитування

 

2.      a) Supply the prepositions where necessary.

               b) Decribe the impact of “easy” and “tight” monetary policy on an economy.

 

Monetary policy is the branch of financial policy that is concerned … controlling the supply of money and credit. Monetary policy is important because of its impact … inflation and on interest rates.

If a government pursues an “easy” monetary policy it means that it allows the amount of money … circulation to rise and it lets banks increase the volume of loans.

If a government pursues a “tight” monetary policy, it restricts the amount … money in circulation and reduces the funds available … banks … making loans.

When money is tight:

1.           Interest rates rise, because commercial banks have to borrow … a higher rate … the interbank market.

2.           Credit falls, because people and businesses borrow less … higher rates.

3.           Aggregate demand falls, because people and businesses buy less, as they have less money.

4.           Output falls, too, because … less consumption, firms produce less.

5.           Unemployment rises, because companies are producing and selling less, and so need … less labour.

6.           Inflation fall, because there is less money in circulation.

7.           The exchange rate will probably rise, if there is the same demand but less money, or if three is higher demand, as foreigners take advantage of the higher interest rates to invest … the currency. Increasing the money supply, making more reserves available, has the opposite effects.

The amount of money … circulation and its velocity of circulation determine the average level of prices and wages. Many central banks now set money supply targets … increasing or decreasing the money supply, the central bank indirectly influences … interest rates, demand, output, growth, unemployment and prices. The central bank can reduce the reserves available … commercial banks by changing the reserve requirements. This reduces the amount … money that banks can create and makes the money tight or scarce.

Alternatively, the central bank can engage … what are called open-market operations, which involve selling short-term government bonds (such as three-month Treasury bills) … the commercial banks, or buying them back.

 

Words you may need:

money in tight – грошей недостатньо

interbank market – міжбанківський ринок

velocity of circulation – швидкість обігу

to set targets – встановлювати орієнтири, показники

alternatively – навпаки

engage – займатися (чим-небудь)

short-term government bonds – державні короткострокові облыгації

Treasury Bill – казначейський вексель

 

3.a) Open the brackets, putting the verbs in the correct form.

b) Compare the FED, the CBR and the Bank of England, using information from the unit.

The Bank of England

 

The Bank of England is Britain’s central bank. Founded in 1694, it (to be) the world’s second oldest central bank, being six years younger than Sweden’s Riksbank. It was privately owned until it (to nationalize) in 1946.

The Governor, Deputy Governor, and 16 Directors who form the Court of Directors (to appoint) by the sovereign on the recommendation of the Prime Minister.

The Bank o England is both monetary authority and bank supervisor, it is charged with the control of the banking system in the interest of the nation. The chief functions of the Bank of England are to act as the Government’s bank in the widest possible sense. The main Government account is the central Exchequer Account in the Bank, to which all Government revenues eventually (to credit), and from which all Government payments originate. Other major ministerial accounts also (to keep) in the Bank and the major expenses of Government departments (to disburse) from these accounts.

The Bank does not lend money to the Government. If the Government needs funds it (to borrow) the sums requires by issuing Treasury bills or by selling stocks. Treasury bills are short-term securities, offered for sale by tender, repayable three month after issue. The Bank’s function is to balance every day the sums received against the sums needed, never allowing idle balances to accumulate. If moneys (to receive) in excess of requirements, the Bank buys back Treasury bills, adding them to its portfolio.

The Bank of England are bankers to the commercial banks, and also to the discount and accepting houses. The ordinary commercial banks (to keep) about half of their cash assets on current accounts with the Bank of England, which therefore acts as the “Bankers’ Bank”, using these deposits for the day-to-day settlement of indebtedness between the banks. A lot of overseas central banks and international bodies have account with the Bank of England to facilitate a wide variety of international transactions and to promote trade and prosperity.

The Bank is the central note-issuing authority. New notes (to issue) and worn notes (to withdraw) in very large numbers every day.

The Bank performs registration activities as registrar of government stocks and stocks of nationalized industries. It also (to pay) dividends when they fall due.

The Bank acts as the Government’s agent for the administration of exchange control and protect the gold and foreign exchange reserves.

Being monetary authority in the country, the Bank implements the Government policy in the money market and the loan market by raising or lowering Bank Rate.

Because of its influential position in the financial advice to the Treasury to assist it in forecast of the economic situation and the balance-of-payments position. The Bank also advises companies on capital structure and finance.

The style of work of the Bank much (to admire) by the world and (to give) the credit for the safe and successful growth of London as the world’s number one international banking centre.

 

Words you may need:

sovereign – монарх

charge (with) – поручати

exchequer – казначейство

credit – записувати в кредит

disburse – платити, оплачувати

sale by tender – продаж на торгах

idle – вільний

discount house – рахунковий дім

accepting house – акцептний дім

settlement of indebtedness – урегулювання заборгованості

registrar – регістратор

to fall due – наступати

exchange control – валютний конроль

Bank Rate – ставка Центрального банку

 

4. Fill each gap with a suitable word from the box. Sum up the text in 5-7 sentences. Present your summary in class.

 

 

institutions

impact

banks

apply

operating

legislation

engage

branches

responsibilities

conduct

activities

powers

 

 

US Activities of Foreign Banking Organizations

 

The International Banking Act of 1978 (IBA) provided for federal regulation of the US operations of foreign banks and granted important new responsibilities to the Federal Reserve for the supervision and regulation of such operations. Enactment of this __________ followed rapid growth in the activities of foreign banks in United States and an increase in their competitive _________ upon domestic markets.

The IBA created a federal regulatory and supervisory structure for the US branches and agencies of foreign __________, similar to that applicable to US banks. This policy of “national treatment” promotes competitive equality between domestic and foreign banks operating in this country the same __________ and subjecting them to the same restrictions and obligations that _________ to US banks. As part of the implementation of national treatment, the IBA limited expansion of interstate deposit-taking and domestic non-banking ____________ of foreign banks, provided the option of federal licensing for agencies and branches that _________ in retail deposit-taking.

At the federal level, the IBA apportioned primary supervisory responsibility for US ________ and agencies of foreign banks among the three federal banking agencies, according to the type of license and whether the banking office has deposit insurance. In addition, the Federal Reserve was given broad authority for the supervision of all federal and state-licensed branches and agencies of foreign banks ____________ in the United States. In fulfilling this responsibility, the Federal Reserve must assess the impact and condition of foreign banks operating across state lines. To carry out its ___________, the Federal Reserve has statutory authority to examine the assets and liabilities of all branches and agencies, but it generally relies upon examinations that state and other federal banking authorities ___________. Under the Bank Holding Company Act and the International Banking Act, the Federal Reserve also has responsibility to approve, review, and monitor the US non-banking activities of foreign banking organization.

 

Words you may need:

enactment – введення закону в силу

applicable – застосовуваний

“national treatment” – національний режим

(retail) deposit-taking – прийом внесків від населення

option – вибір, право вибору

apportion – розподіляти

statutory authority – право, надане законом

assets and liabilities – активи та пасиви

 

5.a) Read and discuss the text.

   b) Single out the main facts from the text and present them in short essay.

   c) Give your answer to the question in the title.

 

Is Monetary Policy Needed?

 

Many people believe that central banks should conduct an active, interventionist monetary policy even through most countries are abandoning other forms of state intervention in their economies, such as price controls, income policies, and industrial planning. These and other forms of invention, such  as agricultural policies and state ownership of business enterprises, waste economic resources and distort markets.

Monetary policy, which represents government intervention in the marketplace for credit, exhibits the same negative effects. The time has come to challenge the need for monetary policy as practiced by central bankers (often with finance ministry guidance). The financial markets, operating under appropriate tax and structural policies, will produce far greater price stability and smoother economic growth than central bankers can.

Some people still believe that controlled growth of the money supply will minimize inflation. In fact, the quantity of money in the industrialized nations today is essentially demand-driven. Currency, a key component of the money supply, is demand-driven when people can easily exchange unneeded currency for interest-bearing financial assets, such as bank deposits and bonds. Currency-driven inflations occur only when governments finance their obligations in currency that cannot be converted easily into other assets.

Bank deposits, the main component of the money supply in the industrialized countries, are demand-driven as well. This demand reflects the willingness of individuals and businesses to provide credit to the economy in which they operate, versus investing in real assets or moving funds to other countries.

Reserve requirements on bank deposits, still a favoured monetary policy tool of some central bankers, do not restrict bank lending.

As a practical matter, monetary policy in the industrialized world today essentially takes the form of announced official rates for lending to banks and central bank “steering” of short-term rates.

In effect, civil servants, called central bankers, tell participants in the highly competitive and increasingly internationalized financial marketplace what they, the civil servants, believe short-term interest rates should be.

 

Words you may need:

interventionist policy – інтервенціоналістська полїтика

abandon – відмовлятися від чого-небудь

exhibit – проявляти, показувати

demand-driven – той, що залежить від попиту

interest-bearing – той, що приносить процентний дохід

currency-driven inflation – інфляція, що є наслідком об’єму валютних засобів

convert – конвертувати

versus – проти, у порівнянні з

“steering” – управління, керівництво

civil servant – державний службовець

credit market – ринок кредитів

to clear the market – регулювати ринок

 

6.a) Read and discuss the text.

   b) Single out the main facts from the text and present them in short essay.

c) Say why the CBR is interested in the development and improvement of the payment system of Russia.

Payment Systems

 

Public policy responsibility for the payment system usually rests with central banks. Central banks are naturally interested in the payment system because it is a key component of the operation of financial markets and has important implications for the trading efficiency of the real economy. Of particular concern to central banks is clearing and settlement in financial markets where trading results in large payment obligations, such as the securities, commodity, interbank funds, and foreign exchange markets.

The central bank also participates in the payment system as a provider of interbank payment services. The role of the central bank in operating the interbank system depends on the development of a nation’s payment system.

The Central Bank of Russia, with the assistance of international experts, has taken steps to raft legislation and oversee the decentralized expansion of Russia’s domestic payment system. Progress has included improvements in the Interbank Payments System, involving the use of computer-generated instructions with specialized software. An electronic payments system for cash settlement was installed in Moscow, where 65 per cent of total document urnover in Russia occurs. The so-called automatic payments system began with eight banks in September 1993. As of July 1994, about 60banks and two cash settlement centers (all in the Moscow area) participating in the automatic payments system. Eventually, all banks will be part of this system. Efficiency at other cash settlement centers was improved, and growth was recorded in the number of both interbank settlement centers and networks of banks with cross-connecting correspondent accounts that act as settlements agents for associated groups of smaller banks.

 

Words you may need:

rest – покладати (про зобов’язання)

software – комп’ютерне програмне забезпечення

document turnover – документообіг

cash settlement center – розрахунково-касовий центр

cross-connecting correspondent accounts – перехресні кореспондетнські рахунки

 

 

32