Banks

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 originated as places to which people took their valuables for safe-keeping, but today the great banks of the world have many functions in addition to acting as guardians of valuable private possessions.

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 cheques. 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 heed 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.

New words

To be concerned – бути пов’язаним (з чимось);

Effort – спроба, зусилля;

Prevent – запобігати;

Allocate – розподіляти;

Originate – виникати;

Current account – поточний рахунок;

Profit – прибуток, вигода.

Answer the questions

1.      In what way do banks co-operate with government?

2.      What was the original function of a bank?

3.      In what two ways do banks receive money from their customers?

4.      How does the bank make its main profit?

Banking in Britain

There are several different types of banks in Britain, but the most important for everyday business are the clearing banks, often called High Street banks. The biggest are the National Westminster, Barclay, Lloyd’s and the Midland. You can usually find at least one branch of these in small towns, and several branches in larger towns. Banks hours are 9.00 – 3.30.

The banks provide a wide range of services:

Current accounts

These are for day-to-day dealings. A cheque book and cheque guarantee card are provided, as well as a cash card for withdrawing money from electronic cash point machines outside banking hours. Interest is sometimes paid on these accounts.

Deposit accounts

For those who wish to save money, regular, fixed interest is paid on savings.

Foreign exchange

Most banks have sections which buy and sell foreign currency and travelers cheques.

Loans

Banks provide loans for cars, furniture, holidays, est., and the client must pay interest of these loans. Special loans for buying houses called “mortgages” are also arranged.

Other services

Banks usually provide specialist services, such as investment advice, buying and selling shares for customers, insurance, and standing orders for paying bills, such as electricity, water and credit cards.

Building societies, which used to provide deposit accounts and mortgages for people wishing to buy houses, are now competing with the High Street Banks, and offer a full range of banking services.

B. Answer the questions.

1.      Which banks are the most important for everyday business?

2.       Which are the biggest banks in Britain?

3.      Is interest paid on current accounts?

4.      Where can you exchange your foreign currency?

5.      How can a client receive a loan from the bank?

6.      Which specialist services are provided by banks?

7.      What do you think “a standing order” means?

Commodity exchanges, auctions, tenders

           

Commodity Exchanges deal in raw materials and some items of produce, such as cotton, wheat, vegetable oils, etc, as these goods can be accurately graded and the grades practically remain unchanged every year. The goods are bought and sold at commodity exchanges according to grades or standards (under standard descriptions), and on the basis of standard contract terms. And commodity exchanges are called accordingly: the Wheat Exchange, the Metal Exchange and so on.

Thus, for example, in Great Britain you can take part in sessions at the London Metal Exchange dealing in cocoa, rubber and sugar, the Liverpool Cotton and Corn Exchanger or the Bradford Wool Exchange, Yorkshire. Nowadays Commodity Exchanges are loosing their role as markets of physical goods and are becoming mainly futures exchanges where deals are chiefly made for speculation purpose or for hedging.

The goods like fur, tea, bristles, spices whose quality varies from year to year, from lot to lot cannot be accurately graded and are sold at auctions according to sample (on a tale quale basis).

Before the auction begins, the lots are inspected by future buyers and then sold to the highest bidder.

Horses or other animals are also sold and bought at auctions. Trade by tenders is frequently used in developing countries for construction work or for delivery of goods. General terms and conditions of the future deal are announced beforehand and the contract is given to the Suppliers who offered the lowest price and the most favorable terms.

А.  Знайдіть у тексті еквіваленти поданих слів:

1)      хто запропонував найнижчу ціну і найвигідніші умови;

2)      продаються і купуються на біржах;

3)      брати участь у біржових сесіях;

4)      на базі типових умов контракту;

5)      укласти угоду;

6)      за стандартними якісними характеристиками;

7)      продаються на аукціонах за зразком;

8)      контракт подається тому постачальнику, який…;

9)      заздалегідь оголошуються загальні умови.