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Vocabulary. 1. What type of economy does the United States have? . Types of banks and economic functions
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Vocabulary
| abundant natural resources | Обильные природные ресурсы |
| International Monetary Fund | Международный валютный фонд |
| GDP | Внутренний валовой продукт |
| purchasing power parity (PPP) | Покупательная сила валют |
| slightly less than | Намного меньше чем |
| rank | Занимать к-л. место |
| per capita | На душу |
| importer | Импортер |
| relatively low | Относительно низкий |
| leading export commodity | Ведущий экспортный товар |
| vehicles | Транспортные средства |
| private sector | Частный сектор |
| postindustrial | Постиндустриальная |
| wholesale | Оптовая торговля |
| retail trade | Розничная продажа |
| nuclear energy | Ядерная энергия |
| sulfur | Сера |
| soybeans | Соя |
Questions:
1. What type of economy does the United States have?
2. What is the United States GDP?
3. What are top trading partners of the USA?
4. What is the leading export commodity? What is the leading import commodity?
5. What constitutes the bulk of the economy?
6. Does the United States produce oil or import it?
7. What does the USA produce?
8. The United States is the world's top producer of corn and soybeans, isn’t it?
9. Is the cultivation and sale of marijuana legal in this country?
10. What are the two most recognized US brands in the world?
Тopic 8
Bank
A banker or bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money.
The first modern bank was founded in Italy in Genoa in 1406, its name was Banco di San Giorgio (Bank of St. George).
Many other financial activities were added over time. For example banks are important players in financial markets and offer financial services such as investment funds.
Banks have influenced economies and politics for centuries. Historically, the primary purpose of a bank was to provide loans to trading companies. Banks provided funds to allow businesses to purchase inventory, and collected those funds back with interest when the goods were sold. For centuries, the banking industry only dealt with businesses, not consumers. Banking services have expanded to include services directed at individuals, and risks in these much smaller transactions are pooled.
Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, EFTROS, and ATM.
Banks borrow money by accepting funds deposited on current account, accepting term deposits and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current account, by making installment loans, and by investing in marketable debt securities and other forms of money lending.
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Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account.
Vocabulary
| Banker | Банкир |
| Financial institution | Финансовое учреждение |
| Borrow | Заимствовать |
| Founded | Основан |
| Added | Добавлены |
| Important players | Важные игроки |
| Services | Услуги |
| Investment funds | Инвестиционный фонд |
| Primary owners | Прямые владельцы |
| Non-financial | Нематериальные |
| Holding | Холдинг |
| Insurance services | Страховые услуги |
| Primary purpose | Первичная цель |
| Term deposits | Депозиты срока |
| Bonds | Облигации |
| Government | Правительство |
| Household | Хозяйство |
| Lender | Кредитор |
Questions:
1. What is a bank?
2. When and where was the first modern bank founded? What was its name?
3. What was the primary purpose of a bank historically?
4. How do banks act?
5. How do banks borrow money?
6. How do banks lend money?
7. Why is a bank account considered indispensable by most businesses, individuals and governments?
8. Why are non-banks that provide payment services not normally considered an adequate substitute for having a bank account?
Тopic 9
Types of banks and economic functions
Banks' activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to High Net Worth Individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profits.
Central banks are normally government owned banks, often charged with quasi-regulatory responsibilities, e. g. supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the banking system and act as Lender of last resort in event of a crisis.
The economic functions of banks include:
1. issue of money, in the form of banknotes and current accounts subject to cheque or payment at the customer's order. These claims on banks can act as money because they are negotiable and/or repayable on demand, and hence valued at par and effectively transferable by mere delivery in the case of banknotes, or by drawing a cheque, delivering it to the payee to bank or cash.
2. netting and settlement of payments -- banks act both as collection agent and paying agents for customers, and participate in inter-bank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economise on reserves held for settlement of payments, since inward and outward payments offset each other. It also enables payment flows between geographical areas to offset, reducing the cost of settling payments between geographical areas.
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3. credit intermediation -- banks borrow and lend back-to-back on their own account as middle men
4. credit quality improvement -- banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversification of the bank's assets and the bank's own capital which provides a buffer to absorb losses without defaulting on its own obligations. However, since banknotes and deposits are generally unsecured, if the bank gets into difficulty and pledges assets as security to try to get the funding it needs to continue to operate, this puts the note holders and depositors in an economically subordinated position.
5. maturity transformation -- banks borrow more on demand debt and short term debt, but provide more long term loans. Bank can do this because they can aggregate issues (e. g. accepting deposits and issuing banknotes) and redemptions (e. g. withdrawals and redemptions of banknotes), maintain reserves of cash, invest in marketable securities that can be readily converted to cash if needed, and raise replacement funding as needed from various sources (e. g. wholesale cash markets and securities markets) because they have a high and more well known credit quality than most other borrowers.
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