Text 7 . Commercial and Retail Banking

When people have more money than they need to spend, they may choose to save it. They deposit it in a bank account, at a commercial or retail bank, and the bank generally pays interest to the depositors. The bank then uses the money that has been deposited to grant loans - lend money to borrowers who need more money than they have available. Banks make a profit by charging a higher rate of interest to borrowers than they pay to depositors.

Commercial banks can also move or transfer money from one customer's bank account to another one, at the same or another bank, when the customer asks them to.

Banks also create credit - make money available for someone to borrow - because the money they lend, from their deposits, is usually spent and so transferred to another bank account.

The capital a bank has and the loans it has made are its assets. The customers’ deposits are liabilities because the money is owed to someone else. Banks have to keep a certain percentage of their assets as reserves for borrowers who want to withdraw their money. This is known as the reserve requirement. For example, if the reserve requirement is 10%, a bank that receives a $ 100 deposit can lend $ 90 of it. If the borrower spends the money and writes a cheque to someone who deposits the $ 90, the bank receiving that deposit can lend $ 81. As the process continues, the banking system can expand the first deposit of $ 100 into nearly $1,000. In this way, it creates credit of almost $ 900.

Before lending money, a bank has to assess or calculate the risk involved. Generally, the greater the risk for the bank of not being repaid, the higher the interest rate they charge. Most retail banks have standardized products for personal customers, such as personal loans. This means that all customers who have been granted a loan have the same terms and conditions - they have the same rules for paying back the money.

Banks have more complicated risk assessment methods for corporate customers – business clients – but large companies these days prefer to raise their own finance rather than borrow from banks.

Banks have to find a balance between liquidity – having cash available when depositors want it – and different maturities – dates when loans will be repaid. They also have to balance yield – how much money a loan pays – and risk.

 

Exercise 52 . Translate into English.

Заощаджувати гроші, надавати позику, банківський рахунок, позичальник, вкладник, переказувати гроші, активи і пасиви, знімати гроші з рахунку, резервні вимоги, оцінювати ризик, ліквідність, строки платежу, дохідність, умови кредиту.

Exercise 53 . Complete the sentences from banks’ websites with the following words: conditions, corporate customers, personal customers, bank account, grant loans.

1. If you need instant access to all your money, this is the __________ __________ for you. 

2. Our products for _________ _________include business overdrafts, loan repayments that reflect your cash flow, and commercial mortgages.

3. Our local branch managers are encouraged to help local businesses and are authorised to _________ _________ and overdrafts.

4. We offer standardised loans: you can be sure you won’t get less favourable terms and ________ than our other _________ _________.

 

Exercise 54 . Match the two parts of the sentences.

1. Banks lend savers’ deposits	a) banks have to assess the risk involved.
2. They also create credit by	b) depends on the reserve requirements.
3. How much credit banks can create	c) depends on how risky it is for the bank to lend the money.
4. Before lending money,	d) so they can’t lend all their money in loans with long maturities.
5. The interest rate on a loan	e) lending the same original deposit several times.
6. Banks always need liquidity,	f) to people who need to borrow money.

Exercise 55 . Translate the sentences into English.

1. Якщо люди бажають заощадити гроші, вони можуть відкрити рахунок у комерційному банку, який виплачує вкладникам відсотки. 2. Банки використовують вкладені гроші, щоб надавати позики. 3. Банки заробляють прибутки, встановлюючи вищі відсоткові ставки для позичальників, ніж вони виплачують своїм вкладникам. 4. Капітал, який належить банку, і позики, які він видав, - це активи банку. 5. Вклади клієнтів – це пасиви, бо банк винен ці гроші. 6. Обов’язковий резерв – це відсоток активів, який банк зберігає для клієнтів, які бажають забрати свої гроші. 7. Перед тим, як надати позику, банк повинен оцінити ризик. 8. Всім приватним клієнтам надається персональна позика за однакових умов. 9. Банки повинні знайти баланс між ліквідністю та строками платежів, а також між прибутком і ризиком.

 

Exercise 56. Look at some commercial bank websites from your country. Which bank offers the best rates to borrowers and lenders? Discuss in pairs.

Exercise 5 7 . Complete the text with the words from the box.

accounts	return	salary	liquidity
deposits	bank loan	transfer	spread
lend	debt	cheque	wages
overdraft	liabilities	depositors	customers’
current account	optimize	standing orders	withdraw

 

Commercial banks are businesses that trade in money. They receive and hold 1) … , pay money according to 2) … instructions, 3) … money, etc.

There are still many people in Britain who do not have bank 4) … Traditionally, factory workers were paid 5) … in cash on Fridays. Non-manual workers, however, usually receive a monthly 6) … in the form of a cheque or a 7) … paid directly into their bank account.

A 8) … (US: checking account) usually pays little or no interest, but allows the holder to 9) … his or her cash with no restrictions. Deposit accounts (in the US also called time or notice accounts) pay interest. They do not usually provide 10) … (US: check) facilities, and notice is often required to withdraw money. 11) … and direct debits are ways of paying regular bills at regular intervals.

Banks offer both loans and overdrafts. A 12) … is a fixed sum of money, lent for a fixed period, on which interest is paid; banks usually require some form of security or guarantee before lending. An 13) ... is an arrangement by which a customer can overdraw an account, i.e. run up a debt to an agreed limit; interest on the 14) … is calculated daily.

Banks make a profit from the 15) … or differential between the interest rates they pay on deposits and those they charge on loans. They are also able to lend more money than they receive in deposits because 16) … rarely withdraw all their money at the same time. In order to 17) … the return on their assets (loans), bankers have to find a balance between yield and risk, and 18) … and different maturities, and to match these with their 19) … (deposits). The maturity of a loan is how long it will last; the yield of a loan is its annual 20) … - how much money it pays - expressed as a percentage.

 

Exercise 5 8 . Learn the following words and word combinations.

monetary policy	– грошово-кредитна політика, грошова політика
financial stability	– фінансова стабільність
supervise	– спостерігати, наглядати, інспектувати, контролювати
issue currency	– випускати валюту
reserve-asset ratio	– норма резервного покриття, резервний норматив
bank run/ run on the bank	– панічне вилучення банківських вкладів
lender of last resort	– кредитор останньої інстанції
bail out	– брати на поруки, виручати з біди, допомагати
exchange rate	– обмінний курс
intervene	– втручатися
currency market	– валютний ринок

Exercise 59 . Read and translate text 8 - an interview with an expert in central banking.

Text 8 . Central Banking

- What are the main functions of central banks?

- Most countries have a central bank that provides financial services to the government and to the banking system. If a group of countries have a common currency, for example the euro, they also share a central bank, such as the European Central Bank in Frankfurt.

Some central banks are responsible for monetary policy - trying to control the rate of inflation to maintain financial stability. This involves changing interest rates. The aim is to protect the value of the currency - what it will purchase at home and in other currencies.

In many countries, the central bank supervises and regulates the banking system and the whole financial sector. It also collects financial data and publishes statistics, and provides financial information for consumers. In most countries, the central bank prints and issues currency - putting banknotes into circulation. It also participates in clearing cheques and settling debts among commercial banks.

-How exactly does the central bank supervise the commercial banks?

-Well, commercial banks have to keep reserves - a certain amount of their deposits - for customers who want to withdraw their money. These are held by the central bank, which can also change the reserve-asset ratio - the minimum percentage of its deposits a bank has to keep in its reserves.

If one bank goes bankrupt, it can quickly affect the stability of the whole financial system. And if depositors think a bank is unsafe they might all try to withdraw their money. If this happens it's called a bank run or a run on the bank, and the bank will quickly use up its reserves. Central banks can act as lender of last resort, which means lending money to financial institutions in difficulty, to allow them to make payments. But central banks don't always bail out or rescue banks in difficulty, because this could lead banks to take risks that are too big.

-What about exchange rates with foreign currencies?

- Central banks manage a country's reserves of gold and foreign currencies. They can try to have an influence on the exchange rate - the price at which their currency can be converted into other currencies. They do this by intervening on the currency markets, and moving the rate up or down by buying or selling their currency. This changes the balance of supply - how much is being sold - and demand - how much is being bought.

 

Exercise 60 . Translate into English.

Центральний банк, грошова політика, фінансова стабільність, рівень інфляції, вартість валюти, контролювати, випускати валюту, здійснювати кліринг чеків, резервний норматив, збанкрутувати, панічне вилучення банківських вкладів, кредитор останньої інстанції, брати на поруки, обмінний курс, втручатися у валютний ринок, попит та пропозиція.

 

Exercise 61.Match the two parts of the sentences.

1. The central bank will sometimes lend money	a) if they could always be sure of rescue by the central bank.
2. Banks would probably start taking too many risks	b) if there is a run on a commercial bank.
3. Central banks are usually responsible for	c) if monetary policy is successful.
4. The central bank can alter	d) printing and distributing banknotes.
5. There will be low and stable inflation	e) the amount of money commercial banks are able to lend.

 

Exercise 62 . Complete the text from the website of the Federal Reserve, the central bank of the United States. Use the terms from     text 8.

Today the Federal Reserve's duties fall into four general areas: · conducting the nation's a)_______________ policy; · b)______________ and regulating banking institutions and protecting the credit rights of consumers; · maintaining the c)_________________ of the financial system; and providing certain d)__________________ services to the US government, the public, financial institutions, and foreign official institutions.

Exercise 63 .Make word combinations using a word from each box. One word can be used twice. Then use the word combinations to complete the sentences below.

 

bank currency exchange financial monetary

markets run system policy rate stability

 

1. _________ ________, including setting interest rates, is designed to maintain _________ __________.

2. If there's a _______ _______ and the bank goes bankrupt, this can have a rapid effect on the whole ________ _______.

3. On one day in 1992, the Bank of England lost over £1 billion (more than half of the country's foreign reserves) in the _____ _____ , trying to protect the ______ ______ of the pound.

Exercise 64 . Translate the sentences into English.

1. Більшість країн мають центральний банк, який надає фінансові послуги уряду та банківській системі. 2. Деякі центральні банки відповідальні за грошову політику – вони намагаються контролювати рівень інфляції та підтримувати фінансову стабільність. 3. Центральний банк може змінювати норму резервного покриття, тобто мінімальний відсоток депозитів, який банк повинен зберігати в якості резерву. 4. Якщо вкладники вважають, що банк ненадійний, вони можуть спробувати забрати свої гроші з рахунків. Це явище називається панічним вилученням банківських вкладів. 5. Центральний банк може виступати як кредитор останньої інстанції, надаючи гроші фінансовим установам у складних фінансових умовах. 6. Центральний банк може впливати на обмінний курс через втручання у валютний ринок. Він піднімає або знижує курс, купуючи або продаючи валюту, що змінює баланс попиту та пропозиції.

 

Exercise 6 5. Answer the questions in pairs.

1. Is the central bank in your country independent from the government?

2. What powers and responsibilities does it have?

 

Exercise 66 . This exercise defines the most important kinds of bank. Complete the text using the words from the box..

central banks commercial banks supranational banks

building societies merchant banks universal banks

finance house investment banks

Types of Bank

1) … supervise the banking system; fix the minimum interest rate; issue banknotes; control the money supply; influence exchange rates; and act as lender of last resort.

2) … are businesses that trade in money. They receive and hold deposits in current and savings accounts, pay money according to customers' instructions, lend money, and offer investment advice, foreign exchange facilities, and so on. In some countries such as England these banks have branches in all major towns; in other countries there are smaller regional banks. Under American law, for example, banks can operate in only one state. Some countries have banks that were originally confined to a single industry, e.g. the Credit Agricole in France, but these now usually have a far wider customer base.

In some European countries, notably Germany, Austria, and Switzerland, there are 3) … which combine deposit and loan banking with share and bond dealing, investment advice, etc. Yet even universal banks usually form a subsidiary, known as a 4) … , to lend money - at several per cent over the base lending rate - for hire purchase or instalment credit, that is, loans to consumers that are repaid in regular, equal monthly amounts.

In Britain, the USA and Japan, however, there is, or used to be, a strict separation between commercial banks and banks that do stockbroking or bond dealing. Thus in Britain, 5) … specialise in raising funds for industry on the various financial markets, financing international trade, issuing and underwriting securities, dealing with takeovers and mergers, issuing government bonds, and so on. They also offer stockbroking and portfolio management services to rich corporate and individual clients. 6) … in the USA are similar, but they can only act as intermediaries offering advisory services, and do not offer loans themselves.

Yet despite the Glass-Steagall Act in the USA, and Article 65, imposed by the Americans in Japan in 1945, which enforce this separation, the distinction between commercial and merchant or investment banks has become less clear in recent years. Deregulation in the US and Britain is leading to the creation of "financial supermarkets" - conglomerates combining the services previously offered by stockbrokers, banks, insurance companies, etc.

In Britain there are also 7) … that provide mortgages, i.e. they lend money to home-buyers on the security of houses and flats, and attract savers by paying higher interest than the banks. The savings and loan associations in the United States served a similar function, until most of them went spectacularly bankrupt at the end of the 1980s.

There are also 8) … such as the  World Bank or the European Bank for Reconstruction and Development, which are generally concerned with economic development.

Exercise 6 7 .Complete the following extract with the missing prepositions.

If you are looking for an alternative … the traditional high street bank, then Internet banking may be a solution.

PROS: The main advantage … Internet banks is that they have lower charges because they have no need … buildings or a branch network. … the whole, they also offer slightly better rates for savers. After getting set up, a further benefit … Internet banks is that you can have access … your money 24 hours a day and can make payments of transfer funds … your convenience.

CONS: Some customers worry about the potential lack … security of dealing with money online, but the banks have worked hard to find solutions … security problems. Internet banks do not offer the facilities to meet a bank manager … person, and paying in cheques still has to be done … post. Some banks also suffer from a lack … cash machines.

Exercise 6 8 . Learn the following words and word combinations.

labour	– праця, робота
output	– продукція, випуск
base rate (BrE)/  prime rate (AmE)	– базова ставка
margin	– різниця
spread	– різниця між собівартістю і ціною продажу
creditworthiness	– кредитоспроможність, платоспроможність
credit standing	– кредитоспроможність; репутація позичальника
solvency	– платоспроможність, здатність виконувати фінансові зобов'язання
floating interest rate	– плаваюча відсоткова ставка
hire purchase	– купівля-продаж на виплату, в розстрочку

 

Exercise 6 9 . Read, translate and give the gist of text 9.

 

Text 9. Interest Rates

An interest rate is the cost of borrowing money: the percentage of the amount of a loan paid by the borrower to the lender for the use of the lender's money. A country's minimum interest rate (the lowest rate that any lender can charge) is usually set by the central bank, as part of monetary policy, designed to keep inflation low. This can be achieved if demand (for goods and services, and the money with which to buy them) is nearly the same as supply. Demand is how much people consume and businesses invest in factories, machinery, creating new jobs, etc. Supply is the creation of goods and services, using labour – paid work – and capital. When interest rates fall, people borrow more, and spend rather than save, and companies invest more. Consequently, the level of demand rises. When interest rates rise, so that borrowing becomes more expensive, individuals tend to save more and consume less. Companies also invest less, so demand is reduced.

If interest rates are set too low, the demand for goods and services grows faster than the market's ability to supply them. This causes prices to rise so that inflation occurs. If interest rates are set too high, this lowers borrowing and spending. This brings down inflation, but also reduces output – the amount of goods produced and services performed, and employment – the number of jobs in the country.

The discount rate is the rate that the central bank sets to lend short-term funds to commercial banks. When this rate changes, the commercial banks change their own base rate, the rate they charge their most reliable customers like large corporations. This is the rate from which they calculate all their other deposit and lending rates for savers and borrowers.

Banks make their profits from the difference, known as a margin or spread, between the interest rates they charge borrowers and the rates they pay to depositors.

The rate that borrowers pay depends on their creditworthiness, also known as credit standing or credit rating. This is the lender's estimation of a borrower's present and future solvency: their ability to pay debts. The higher the borrower's solvency, the lower the interest rate they pay. Borrowers can usually get a lower interest rate if the loan is guaranteed by securities or other collateral. For example, mortgages for which a house or apartment is collateral are usually cheaper than ordinary bank loans or overdrafts– arrangements to borrow by spending more than is in your bank account. Long-term loans such as mortgages often have floating or variable interest rates that change according to the supply and demand for money.

Leasing or hire purchase (HP) agreements have higher interest rates than bank loans and overdrafts. These are when a consumer makes a series of monthly payments to buy durable goods (e.g. a car, furniture). Until the goods are paid for, the buyer is only hiring or renting them, and they belong to the lender. The interest rate is high as there is little security for the lender: the goods could easily become damaged.

 

Exercise 70. Translate into English.

Відсоткова ставка, сума позики, попит на товари та послуги, пропозиція, облікова ставка, базова ставка, різниця між собівартістю і продажною ціною, кредитоспроможність, платоспроможність, застава, орендування, купівля-продаж на виплату.

 

Exercise 71 . Match the terms with the definitions.

Term	Definition
1. creditworthy	a) the cost of borrowing money , expressed as a percentage of the loan
2. labour	b) having sufficient cash available when debts have to be paid
3. spread	c) paid work that provides goods and services
4. interest rate	d) a borrowing rate that isn’t fixed
5. floating rate	e) safe to lend money to
6. output	f) the difference between borrowing and lending rates
7. invest	g) the quantity of goods and services produced in an economy
8. solvency	h) to spend money in order to produce income or profits

Exercise 72 . Name the interest rates and loans.

1._____________: a loan to buy property ( a house, flat, etc).

2._____________: borrowing money to buy something like a car, spreading payment over 36 months.

3._____________: commercial banks’ lending rate for their most secure customers.

4._____________: occasionally borrowing money by spending more than you have in the bank..

5._____________: the rate at which central banks make secured loans to commercial banks.

 

Exercise 73 . Read the statements. Are they true of false? Correct the false ones.

1. All interest rates are set by central banks. 2. When interest rates fall, people tend to spend and borrow more. 3. A borrower who is very solvent will pay a very high interest rate. 4. Loans are usually cheaper if they are guaranteed by some form of security or collateral. 5. If banks make loans to customers with a lower level of solvency, they can increase their margins. 6. One of the causes of changes in interest rates is the supply and demand for money.

 

Exercise 74 . Translate the sentences into English.

1. Відсоткова ставка – це процент від суми позики, яку сплачує позичальник кредитору за користування його грошима.                       2. Мінімальна відсоткова ставка встановлюється центральним банком як частина грошової політики. 3. Коли відсоткові ставки зростають, позичання стає дорожчим, люди економлять більше і споживають менше. 4. Коли відсоткові ставки занадто низькі, попит на товари та послуги зростає швидше, ніж здатність ринку постачати їх. Це призводить до зростання цін та інфляції. 5. Облікова ставка – це ставка, яку встановлює центральний банк для надання короткострокових кредитів комерційним банкам. 6. Банки заробляють прибутки за рахунок різниці між відсотковими ставками, які вони стягують з позичальників, та відсотками, які виплачуються вкладникам. 7. Кредитоспроможність – це оцінювання кредитором теперішньої та майбутньої платоспроможності позичальника.

 

Exercise 75. Answer the questions in pairs.

1. What are the average interest rates paid to depositors by banks in Ukraine? 2. How much do the borrowers have to pay for loans, overdrafts, mortgages and credit cards debts? 3. Is there much difference among competing banks?

 

Exercise 76 . Learn the following words and word combinations.

monetary loan	– грошова позика
debt instrument	– борговий інструмент
entail	– спричиняти, викликати
installment	– розстрочка; часткова сплата; частковий платіж; черговий платіж в розстрочку
annuity	– ануїтет, щорічна рента
covenant	– угода; обов’язкова умова
secured loan	– кредит під забезпечення; забезпечений кредит; забезпечена позичка; позичка під забезпечення
collateral	– забезпечення ; застава; гарантія щодо позички
security	– гарантія ; застава; забезпечення
recourse note	– вексель з правом регресу (обороту)
unsecured loan	– незабезпечений кредит
lien	– право затримання майна до сплати боргу

Exercise 77 . Read, translate and give the gist of text 10.

Text 10. What Is a Loan?

A loan is a type of debt. This article focuses exclusively on monetary loans, although, in practice, any material object might be lent. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.

The borrower initially does receive an amount of money from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a cost, referred to as interest on the debt. A loan is of the annuity type if the amount paid periodically (for paying off and interest together) is fixed.

A borrower may be subject to certain restrictions known as loan covenants under the terms of the loan.

Acting as a provider of loans is one of the principal tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a typical source of funding. Bank loans and credit are one way to increase the money supply.

Legally, a loan is a contractual promise of a debtor to repay a sum of money in exchange for the promise of a creditor to give another sum of money.

Types of loan

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan.

A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security — a lien on the title to the house — until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter — often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer.

A type of loan especially used in limited partnership agreements is the recourse note.

Unsecured loans are monetary loans that are not secured against the borrowers assets. These may be available from financial institutions under many different guises or marketing packages:

-credit card debt;

-personal loans;

-bank overdrafts;

-credit facilities or lines of credit;

-corporate bonds.

The interest rates applicable to these different forms may vary depending on the lender and the borrower. These may or may not be regulated by law.

 

Exercise 7 8 . Translate into English.

Грошова позика, кредитор, позичальник, регулярні часткові платежі, збільшувати грошову масу, виплачувати, забезпечена позика, незабезпечена позика, іпотечний кредит, борговий інструмент, купувати житло, право затримання майна до сплати боргу.

Exercise 79 .Answer the questions.

1. What is a loan? 2. What do the words “borrower”, “lender”, “debtor” mean? 3. What types of loan can you name? Describe their main features. 4. What is the difference between secured and unsecured loans? 5. What is “collateral”?

 

Exercise 8 0 . Translate the sentences into English.

1. Позика – це тип боргу, який спричиняє перерозподіл фінансових активів між кредитором і позичальником протягом певного часу. 2. Зазвичай позичальник отримує від кредитора суму грошей, яку він повертає частковими платежами. 3. Надавати позики - одне з головних завдань фінансових установ. 4. Банківські позики та кредити є одним з шляхів збільшення грошової маси в обігу. 5. Забезпечений кредит – це позика, при якій позичальник віддає в заставу певний актив (наприклад, автомобіль чи нерухомість) в якості гарантії щодо позички. 6. Іпотечний кредит є дуже поширеним типом боргового інструменту, який використовується для купівлі нерухомого майна. 7. Якщо позичальник не сплачує іпотечний кредит, банк має законне право отримати будинок і продати його для того, щоб повернути заборговану суму. 8. Існує два типи автомобільних кредитів - прямі та непрямі. 9. Кредит, що спеціально використовується в угодах про створення компанії з обмеженою відповідальністю, називається векселем з правом регресу. 10. Незабезпечені кредити – це грошові позики, які не гарантуються активами позичальника.

 

Exercise 81. Read the letter-request for a loan and answer the questions below.

Dear Mr Evans   I would like to make an appointment with you to discuss an overdraft or a loan to enable me to expand my business.   I have been testing the market with a new line of furniture assembly kits, and have found that demand for these kits has exceeded my expectations. In the past six month alone I have had orders over $60,000 worth in orders, half of which I have been unable to fulfill because of my limited resources.   I would need a loan for about $18,000 to buy additional equipment and raw materials. I can offer $8,000 in ordinary shares, and $3,000 in local government bonds as part security. I estimate it would take me about nine months to repay the loan of this size.   I enclose an audited copy of the company’s balance sheet, which I imagine you will wish to inspect prior to our meeting.   I look forward to hearing from you.   Yours sincerely Richard Cliff Director

1.  Why does Mr Cliff need a loan or an overdraft?

2.  What new line does he want to put on the market?

3.  What security does he offer?

4.  What evidence does he offer to show his company is in a healthy state?

5.  What is a balance sheet?

 

 

Exercise 8 2 . Answer the questions in pairs.

Have you ever taken a loan from the bank? Why?

 

Exercise 8 3. Learn the following words and word combinations.

high street bank	– провідний банк (з великою кількістю відділень)
transfer money	– переказувати гроші
check clearing	– чекові взаєморозрахунки між банками
recipient	– одержувач
streamlined	– добре налагоджений; модернізований
honor	– акцептувати , оплачувати (простий вексель, чек)
draw a check	– виписувати чек
draft	– чек, тратта, переказний вексель; сума, одержана за чеком (векселем)

Exercise 8 4 . Read, translate and give the gist of text 11.

 

Text 11. Money Transfer

High street banks have a variety of services which allow you to transfer money abroad. The prices vary based on the country you are sending the money to, the currency, the value of your transfer and how quickly you would like it to arrive.

If you have a bank account, there are several ways to transfer money overseas through the banking system. Not all banks operate in the same way. Check with your local bank for details.

Sending a Check Abroad

Check clearing can take from 4 - 6 weeks. Even though it's easy to issue a check, it may not be easy for the recipient to cash the check. The recipient will be charged a fee of about $50 for check processing. Some countries have less streamlined banking systems than others and may not honor foreign-drawn checks.

Foreign Drafts

Depending on which city or town you live in, this can take from a few days to a week for the bank to prepare the draft. You mail the draft to the recipient. The money comes out of your account when the draft is prepared, not when the recipient gets it. There is a fee for this service of about $25. Since the draft is drawn on your bank to another (corresponding) bank, the recipient must have access to the corresponding bank.

Wire Transfers

You don't have to be a customer of the bank to wire funds, but you have to pay cash. This is quicker than a Foreign Draft, since it is done almost immediately. The fee is about $65 for non-customers and about $40 for bank customers. The recipient must have access to the corresponding bank.

Western Union and Moneygram

These two international companies allow you to transfer money in minutes to almost anywhere in the world. Western Union has over 345,000 agents in 200 countries. To send more than £600 at an agent's office you must have proof of identity. More than £2,000 will require two forms of identity. You can also send money over the phone and online.

Moneygram is a slightly smaller operation, with less than half the agents in only 180 territories. However it can be slightly cheaper.

 

Exercise 8 5 . Complete the table.

Way of transfer	Advantages	Disadvantages

Exercise 8 6 . Find examples of modal verbs in text 11. Analyse these forms.

 

Exercise 8 7 . Complete the sentences with the correct prepositions.

1. The prices vary based … the country you are sending the money to. 2. Not all banks operate … the same way. 3. It may not be easy … the recipient to cash the check. 4. The money comes … of your account when the draft is prepared. 5. Since the draft is drawn … your bank to another bank, the recipient must have access … the corresponding bank. 6. To send more than £600 … an agent's office you must have proof of identity. 7. You can also send money … the phone and online.

 

Exercise 8 8 . Discuss the questions in pairs.

Which way would you prefer if you had to transfer money abroad? Why?

 

Exercise 8 9. Learn the following words and word combinations.

investment bank	– інвестиційний банк
intermediary	– посередник
issue securities	– випускати цінні папери
underwrite an issue	– гарантувати розміщення цінних паперів; гарантувати випуск (облігацій, акцій)
initial public offering (AmE)/ flotation (BrE)	– початкова передплата на акції при перетворенні приватної компанії на відкриту акціонерну
raise funds	– залучати кошти, збирати кошти
acquire	– купувати, придбати
institutional investor	– інституційний інвестор; інвестиційна компанія
insurance company	– страхова компанія
investment fund	– інвестиційний фонд
pension fund	– пенсійний фонд
stockbroking	– перепродаж акцій; торгівля фондовими цінностями
dealing	– біржові операції
execute an order	– виконувати замовлення
merger	– злиття
acquisition	– придбання; поглинання
subsidiary	– дочірнє підприємство, дочірня компанія, філіал
divestiture	– позбавлення прав; реалізація, ліквідація дочірнього підприємства
consulting firm	– консалтингова (консультаційна) фірма
strategic planning	– стратегічне планування
financial restructuring	– фінансове оздоровлення компанії
analyst	– аналітик
forecaster	– прогнозист
valuation	– оцінка

Exercise 9 0. Read, translate and give the gist of text 12.

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