Introduction to Banking and Financial Markets

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 vaults³ 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 Sight deposits can be withdrawn on sight⁴ when­ever the depositor wishes.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Before time deposits can be withdrawn, a minimum period of notification must be given within which banks can sell off some of their high-interest se­curities or call in some of their high-interest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.

Задание 2. Выпишите из каждого предложения текста грамматическую основу (подлежащее+ сказуемое), определите видовременную форму глагола и залог, определите начальную форму глагола.

Задание 3. Задайте вопросы к первому предложению:

· общий

· специальный

· к подлежащему

· альтернативный

разделительный

Задание 4. Заполните пропуски в предложениях и употребите следующие слова и слово­сочетания в соответствующей форме и переведите пред­ложения на русский язык:

to owe, liability, to undertake, therefore (2), interest (2), to settle debts, chequing account, securities, net, bill, to handle transactions

1. The purpose of money is to make it possible for firms and individu­als..........

2. Facing (Сталкиваясь с) an unstoppable rise in unemployment in the early 1980s, many European economists simply accepted it as structur­al, and... it could not be influenced by policy-makers.

3. Employers (Наниматели) obtain their... profits only after they have paid all expenses:..., wages, rents, and others.

4. The household sector of American economy holds about one-third of the nation's......money, which makes up nearly 80 percent of the total amount of money.

5. Most... are bought for an amount less than their face value (нарицатель­ная стоимость) and the difference between the two makes up the....

6. The clearing house system is a centralized mechanism for......between

banks, sellers of commodities and financial....

7. A... is something a business or an individual... to another business or individual.

8. A woman may work hard at home, but she receives no wages for this work. It is not... labour in terms of economics.

9. If there exists a stock market, transactions can......over the telephone.

Задание 5. Найдите в тексте неличные формы глаголов (герундий, причастие настоящего времени, причастие прошедшего времени, отглагольное существительное, инфинитив, сложное подлежащее, сложное дополнение) и выпишите их.

ВАРИАНТ 10

1. Прочитайте и переведите письменно текст на русский язык.