Complete the following sentences in any way you like.

BANKS AND BANKING

A bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money.

The way in which a bank is organised and operates is determined by its objectives and by the type of economy in which it conducts its business. A bank may not necessarily be in business to make a profit.

Banks are closely concerned with the flow of money into and out of the economy. They often co-operate with governments in efforts to stabilize economies and to prevent inflation. They are specialists in the business of providing capital, and in allocating funds on credit.

Banks have three essential functions, which are:

- deposits

- payments

- credits

These three functions are the basis of the services offered by banks. They make it possible for banks to generate profits and to achieve their operating aims.

Banks normally receive money from their customers in two distinct forms: on current account, and on deposit account. With a current account, a customer can issue personal checks. No interest is paid by the bank on this type of account. With a deposit account, however, the customer undertakes to leave his money in the bank for a minimum specified period of time. Interest is paid on this money.

The bank in turn lends the deposited money to customers who need capital. This activity earns interest for the bank, and this interest is almost always at a higher rate than any interest which the bank pays to its depositors. In this way the bank makes its main profits. The primary function of a bank today is to act as an intermediary between depositors who wish to make interest on their savings, and borrowers who wish to obtain capital. The bank is a reservoir of loanable money, with streams of money flowing in and out. For this reason, economists and financiers often talk of money being liquid, or of the liquidity of money. Many small sums which might otherwise be used as capital are rendered useful simply because the bank acts as a reservoir. The system of banks rests upon a basis of trust. Innumerable acts of trust built up the system of which bankers, depositors and borrowers are part. They all agree to behave in certain predictable ways in relation to each other, and in relation to the rapid fluctuations of credit and debit. Consequently, business can be done and checks can be written without any legal tender visibly changing hands.

2. Give English equivalents to the following:

Тесно связано, усилия по стабилизации, предотвратить инфляцию, распределение фондов, безопасное хранение, процент не выплачивается, зарабатывать, более высокая процентная ставка, вкладчики, ликвидность денег, основная прибыль, хранилище, опираться на, колебания, банковское обслуживание частных лиц, принимать депозиты, широкий спектр услуг, банковская гарантия, гарантировать платеж,

3. Read and translate the definitions of the basic banking services terms:

Banking services

1. Electronic funds transfer system (EFTS)

2. Automated teller machine (ATM)

3. Liquidity

4. Secured loan

5. Unsecured loan

6. Collateral

7. Line of credit

8. Revolving credit agree-ment

9. Mortgages

10. Letter of credit

11. Safe custody

12. Trusts

13. Brokerage

14. Consulting

15. Draft

16. Bank draft

17. Bank overdraft

18. Bill of exchange

19. Sight draft

20. Banker’s acceptance — a means of performing financial transactions through a computer terminal or telephone hookup.

— a system that allows customers to effect deposits, withdrawals, and funds transfers at any time by using a specially encoded access card and an electronic device instead of human tellers.

— the ease with which an asset can be exchanged for money without a significant loss of value.

— a loan protected by a pledge from borrowers to forfeit to lenders something of value if the loans are not repaid.

— a short-term loan in which the borrower is not required to put up collateral.

— real or personal property that a firm or individual owns and that is pledged as security for a loan.

— a standing agreement between a bank and a firm in which the bank specifies the maximum amount it will make available to the borrower for a short-term unsecured loan.

— a guaranteed line of credit.

— long-term loans specifically for the purchase of real estate.

— a document in which the bank guarantees one party (such as a seller) that payment will be made if certain conditions are met (such as delivery of merchandise); letters of credit are common when goods are bought or sold abroad; there is a fee for providing this letter of credit.

— a service offered by most commercial banks when they accept deeds, documents, jewelry and other items of property for storage in safe custody on

behalf of customers.

— the provision of safekeeping and management of funds for individuals or institutions such as pension funds. The bank’s job is to administer the money entrusted to it wisely and for the benefit of the owner; the bank receives a fee for managing these funds.

— buying and selling stocks and bonds for their cli-ents.

— giving advice to other businesses; assistance pro-vided especially to firms involved in corporate merger takeovers.

— an order to pay a sum of money that is written by the drawer (the person who is to receive the money).

— a check drawn on a particular bank and obtained from that bank by a debtor for the payment of a debt where the creditor will not accept the debtor’s personal check or the debtor does not have a bank account.

— enables customers to overdraw within agreed limits and at any time (to take more money out of a bank account than it contains).

— a written order, signed by the person giving it, requiring to pay a certain sum of money to another person on demand or at a fixed time.

— a bill of exchange payable at sight, i.e. payable when presented irrespective of when it was drawn.

— a written promise by a bank, issued on behalf of a buyer, to pay a designated firm a certain amount by a particular date.

4. Complete these sentences with appropriate words оr word combinations and translate the sentences into Russian:

1. Banks cooperate with……in efforts to stabilize economies.

2. Banks originated as places to which people took their ….. for safekeeping.

3. No interest is paid by the bank on …..

4. Banks lend the deposited money to… who need capital.

5. The bank is… of loanable money.

6. The system of banks… a basis of trust.

7. Bankers, depositors and borrowers agree to behave ….. in relation to each other.

8. The primary function of a bank is to act as.... between depositors and borrowers.

Complete the following sentences in any way you like.

1. Banks receive money ….

2. Borrowers are..

3. Depositors are …

4. Customers who need capital …….

5. Today the great banks of the world..

6. Interest is paid on …….

7. A bank makes its main profits ….

8. The system of banks rests upon ………

6. Translate into English:

1. Банки и банковское дело - это раздел экономической науки, в котором обсуждаются проблемы банковского сектора: зачем он нужен, как функционирует, как осуществляется его регулирование и пр.

2. Банк — финансово-кредитный институт, основной функцией которого является оказание финансовых услуг юридическим и физическим лицам.

3. Функция аккумуляции средств является первой функцией банка.

4. Вторая функция банка - функция регулирования денежного оборота. Банки выступают центрами, через которые проходит платежный оборот различных хозяйственных субъектов.

5. Третья функция банка - посредническая функция. Под ней зачастую понимается деятельность банка как посредника в платежах.

6. Банки являются финансовыми посредниками между заемщиками и кредиторами.

7. К банковским операциям относятся:

• привлечение денежных средств физических и юридических лиц во вклады и депозиты;

• размещение привлечённых средств;

• открытие и ведение банковских счетов физических и юридических лиц;

• осуществление расчётов по поручению физических и юридических лиц;

• инкассация денежных средств, векселей, платёжных и расчётных документов и кассовое обслуживание физических и юридических лиц;

• купля-продажа иностранной валюты в наличной и безналичной форме;

• выдача банковских гарантий;

• осуществление переводов денежных средств по поручению физических лиц без открытия банковских счетов (за исключением почтовых переводов).

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