f) BANKING SYSTEM IN GERMANY.

The function of German Bundesbank is similar to that of American Federal Reserve Bank: it should support the economic policy of the federal government without having to be restrained by its instructions. As Federal Reserve Bank it is the only institution entitled to release new banknotes. It oversees the stability of German currency by regulating the amount of money in circulation. For this purpose it sells or buys securities and raises and lowers the discount rate. If it wants to withdraw money from the market, it can also promote higher minimum reserves, which the commercial banks must keep regarding their short-term liabilities to Federal Reserve Bank. It can also lower the rate in order to make more money available for the economy.

As the top management of the Bundesbank there are central banks in each of the ten states. Besides there are both commercial and cooperative banking institutions and those under public law. The three biggest banks in Germany: Deutsche Bank, Dresdner Bank and Commerzbank are private enterprises. Savings banks are run by the districts. Their clear ring-houses are called state banks. The biggest banking institution is The German Federal Mail (Deutsche Bundespost).

All banking institutions must observe the credit law. There is a special commission called Federal Supervision Board for credits which watches over this law so it is complied to and so that the citizens’ savings are safe. Should a bank go bankrupt, the losses are going to be reimbursed from the so-called “Fire Fighting Fund” of the credit system.

There is no way modern trade could exist without the services banks perform. They also make it possible that business transactions can go without trade on cash terms. Each has a checking account for current payments and incoming money. A customer can send an open check to his supplier. This kind of check could be cashed at the latter’s bank, but still it would be risky and not customary. One usually mails a voucher check or commissions one’s bank to transfer the required amount of money into the supplier’s account. The account number already known. Thus, the bill is paid in the quickest possible way. The transfer money blank is identical in any bank. After each business transaction, an account is newly balanced and one can receive a bank statement with the current balance daily. Sometimes it happens that the check is not covered and the account is overdrawn. In this case there is usually a ready reserve account available. One can also give his bank the charges for regular payments, such as rent, gas, water or electricity bills and insurance premiums. Then such bills will be automatically settled through the bank. 

All the above mentioned services do not bring a great deal of money to the bank. Its main source of income is the money it obtains and can lend as a short- or long-term credit (= loan). The Germans are famous for being fond of saving money. Most of them have a savings account. The bank pays them their dividends, which are much lower than the interests one has to pay, in case he or she has taken a loan from the bank. The profit margin is the bank’s gross revenue.

Banks run a great business in stock markets. Unlike the U.S., where the members of a stock market are shareholders of the biggest enterprises and their places at the stock exchange could be sold for a great deal of money, in Germany only banks are allowed at the stock markets, except for brokers who calculate the market rate of the day and press representatives. Thus, the banks buy and sell shares or securities with a fixed interest rate, like bond or loans and receive a broker’s fee for it. Since it is not forbidden for German banks to hold shares in the biggest companies or be members of the board there, their influence on the economy is exceedingly strong.

 Vocabulary :

Banking- банковское дело                                   to comission - уполномочить

Federal Reserve Bank – центральный банк        amount - сумма

To be restrained- быть сдерживаемым чем-либо account - счёт

To be entitled – иметь право на что-нибудь       checking account – чековый счёт ( при котором выдаётся чековая книжка)

To oversee – надзирать, производить осмотр          savings account – сберегательный счёт (на котором хранятся деньги, с которых ежемесячно начисляется процент)

To regulate – регулировать                                  to transfer - перевести

In circulation – в обращении                                business transaction – деловая операция

Securities – ценные бумаг                                    to balance an account – свести баланс по счёту

Discount rate – дисконтная ставка                      bank statement – банковский отчёт, баланс

Short-term – краткосрочный                               hot check – чек на сумму, превышающую кредит в банке

Available – доступный                                         to overdraw an account – превысить кредит

Liability – обязательство                                      to charge – записать на чей-либо счёт

Top management – высшее руководство            insurance - страховка

Cooperative – кооперативный                             source of income – источник дохлда

Under public law – общественный, государственный  to obtain – владеть, обладать

Clearing house – расчётная палата                      long-term - долгосрочный

Savings bank – сберегательный банк                  dividends – дивиденды; процент по вкладам

Supervision – надзор                                             interests – проценты, взимаемые банком

Savings (deposits) – сбережения (вклады)          interest rate – ссудный процент

To go bankrupt – обанкротиться                          loan - заём

To perform services – предоставлять услуги      profit margin – прибыль, размер прибыли

On cash terms – на наличной основе

Open (uncrossed) check – некроссированный чек

To cash – обналичить

 Voucher check – проверка денежного свидетельства

 

Use new vocabulary:

1. Federal Reserve Bank ______________ the stability of American ________ and regulates the amount of money.

2. It can lower or raise the __________ ________ to regulating the amount of money ________ for the economy.

3. If a bank goes ________ the losses are going to be redeemed from the so-called “Fire Fighting Fund”.

4. The banks make business transactions possible without trade ___ _________ __________.

5. The customer __________ the required amount into his supplier’s _____________.

6. He’s got the money and wants to __________ ______ __________.

7. Is the ________ covered? I don’t want my account ______________.

8. The bank needs to ____________ new capital.

9. One needs to receive ________ at least once a month to know the new _________.

10. One must pay _________ for any ____________ one takes out from a bank.

11. This _____ loan can be paid ____________.

12. He draws a ______________ on the customer.

13. A letter of exchange signed by the customer is called __________ _______ ________.

14. The ____________ in Frankfurt deals only with ___________.

15. A security with fluctuating value is called a ________.

 

Translate the following without using vocabulary:

1. to go bankrupt ___________________

2. discount ___________________

3. to have at one’s disposal ___________________

4. account number __________________

5. a check ___________________

6. limited ______________________

7. risky _________________

regulate ____________________

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