10. Stock exchange

A stock exchange is a market for secondary securities. A stock exchange is a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends.

Only shares of public limited companies with sound financial standing can be listed and admitted to trading in the stock exchange. Younger and smaller companies which cannot obtain a listing also issue shares; these are traded in the unlisted securities market.

Stock exchanges have multiple roles in the economy. This may include the following: 1. The Stock Exchange provide companies with the facility to raise capital for expansion through selling shares to the investing public. 2. To facilitating company growth. 3. Mobilizing savings for investment 4. Profit sharing; 5. Corporate governance

The price of shares differs from day to day and they are reported daily in newspapers in the form of indexes. The London Stock Exchange index is called the FTSE (Footsie), the New York Stock Exchange index is called the Dow Jones, in Poland it is called WIG. These indexes show the market value of selected companies and represent the changing supply and demand for shares. The transfer of shares and stocks is made by completion of a transfer form – in fact they may change hands every day.

Most transactions are now completed not on the market floor but through a computer system or over the telephone.

The most famous stock exchanges are located in London, New York, Tokyo, Paris and Frankfurt.

11. Types of banks. The banking system of Ukraine

Banks are institutions dealing with money.

The banking system of Ukraine dates to March 1991, when the Ukrainian Parliament passed the law ‘On Banks and banking activities’. The banking system of Ukraine can be determined as two-level, composed of the National Bank and commercial banks.

The National Bank of Ukraine is the central financial body of the state conducting a uniform national monetary, credit and currency police and coordinating and supervising the whole banking system; Improvement of the system of inter-bank settlements; Legislative and regulatory activity.

The National Bank of Ukraine is the central bank of the country, which conducts a uniform state policy in the area of monetary circulation and credit and ensures the stability of the  national currency; issuing centre; foreign exchange authority; supervisory body; bank of the banks; bank of the State; organizer of interbank settlements. 

Commercial banks are formed as joint-stock companies or as companies on an equal footing with both legal and natural persons involved. The range of commercial banks activities includes: receiving deposits of enterprises, institutions and households, crediting of economic entities and households, investments in securities, formation of cash balance and reserves, as well as other assets, cash and settlement servicing of the economy, foreign exchange operations and other services to natural persons and legal bodies.

The major banks are Prominveslbank, the «Privat» Bank, the Export-Import Bank, «Avah>, the Savings Bank of Ukraine and Ukrsotsbank.  Five of the commercial banks are the former specialized state banks: one is a savings bank (Oschadnybank), two are specialized lending banks (Prominvestbank and Ukrsotsbank), and one is the Export-Import Bank of Ukraine (Ukreximbank). Oschadnybank and Ukrcximbank are still stale owned. Prominvestbank and Ukrsotsbank receive concessionary treatment from the NBU and arc responsible for the vast majority of corporate lending.