Understanding the details

1. Reading tasks

Answer the following questions:

1) When did the evolution of the national banking system in Ukraine start?

2) What is the main function of the NBU?

3) Is the NBU an issuing centre?

4) What questions does the National Bank determine?

5) Are the questions of a discount rate and permission for commercial banks' registration and licensing banking business; determination of the standard of emergency funds for commercial banks and other financial and credit institutions the authority of the NBU?

2. Fill in the blanks in this passage, using words from the box given below:

a two-tier structure, are determined, their denomination, the adoption,

the central bank, major function, a legal entity

1) The evolution of the national banking system in Ukraine started in March, 1991, after ¹ ____of the Law of Ukraine "On Banks and Banking" by the Ukrainian Verkhovna Rada.

2) The Ukrainian banking system is ² ____consisting of the National Bank of Ukraine and commercial banks of various types and forms of ownership including the state-owned Export-Import Bank and a specialized commercial Savings Bank.

3) Legal status, principles of organization and activities of the National Bank of Ukraine ³ ____by the Constitution of Ukraine and the Law of Ukraine "On the National Bank of Ukraine".

4) According to the Law of Ukraine "On the National Bank of Ukraine", the National Bank is ⁴ ____of Ukraine, a specific central body of the state administration.

5) The National Bank determines a kind of bank notes, ⁵ ____, distinctive features and their protection system.

6) To carry out its ⁶ ____, the National Bank shall foster the stability of the banking system and within its competence, the price stability.

7) The National Bank of Ukraine is ⁷ ____with separated property, which is the object of the state property.

3. Explain the meanings of the underlined words from the text given below after you have consulted the English-English dictionary. Bank supervision

The National Bank of Ukraine exercises regulation and banking supervision in accordance with the provisions of the Constitution of Ukraine, the Law of Ukraine “On Banks and Banking”, the Law of Ukraine “On the National Bank of Ukraine” and other legislative acts of Ukraine and regulations of the National Bank of Ukraine.

The purpose of banking supervision is stability of the banking system and protection of interests of depositors and creditors as to the safekeeping of client’s funds on banking accounts. Supervisory activity of the National Bank of Ukraine covers all banks, their subdivisions, affiliated and related parties of the banks on the territory of Ukraine and abroad, offices of foreign banks in Ukraine, as well as other legal entities and individuals in their compliance with the requirements of the Law of Ukraine “On Banks and Banking” as to performing banking activity. In the course of banking supervision, the National Bank of Ukraine has the right to require that the banks and managers thereof eliminate banking legislation violations, fulfill NBU regulations in order to avoid or to overcome undesirable consequences, which could jeopardize safety of the funds, entrusted to these banks or inflict damage on a proper banking activity. The National Bank of Ukraine carries out the banking supervision in the form of on-site inspections and off-site supervision.