IX. Translate into English:

1. Гроші функціонують як засіб обігу, міра вартості та запас вартості. 2. Різні види грошей перебувають в обігу в Сполучених Шта­тах Америки. 3. Запас вартості означає, що товари та послуги можна легко конвертувати в гроші. 4. Термін «валюта» відноситься до паперо­вих грошей, а «монета»  до грошей, виготовлених з металу. 5. Су­часні гроші мають ті самі характеристики, що й примітивні гроші. 6. Мета­леві гроші не виходять з обігу аж доти, доки їх не загублять. 7. Пенні — монета найменшої вартості в обігу. 8. Те, що грошова маса щороку зростає на 10—12 відсотків, є основною причиною інфляції.

Theme 24: text “BANKS”

1. Read and translate the text.

2. Retell the text From the History of the National Bank of Ukraine

In March, 1991 the Supreme Soviet of Ukraine adopted Resolution on creation of the National Bank of Ukraine - one of the most important financial institutes of the independent and sovereign state. It should be noted that Ukraine had no central bank of its own and there was only the Republican Office of the USSR State Bank in it. So, such new functions as to issue money in circulation and to manufacture the national currency put some important tasks before the central bank of the Ukrainian state, among them the creation of the material and technical base.

There is a well-known truth: strong money means a strong state. Ukraine began preparation for the monetary reform soon after the Moscow putsch. On September 18, 1991 the Cabinet of Ministers adopted Resolution “On Creating Capacities for Production of

National Currency and Securities”, and on December 10 of the same year the Presidium of the Verkhovna Rada approved Resolution “On National Currency in Ukraine” which confirmed the name and peculiar features of the future monetary unit - the Hryvnya.

First Ukrainian money was produced abroad; banknotes - in Canada and Great Britain, and coins - in Italy. But this required large amounts of currency expenses. So the National Bank was charged to create its own production capacities for the manufacturing and safekeeping of the national currency.

A decision on the location of the enterprise was taken by the governmental working group. The approach was simple: to use operating enterprises with similar technologies and to involve the country’s infrastructure. Simultaneously, they were solving the problem of the conversion of the military-industrial complex enterprises and providing their workers with working places. Besides, such an approach made construction less expensive. Finally it was decided to start minting coins at Lugansk Machine-Tool Plant, to print banknotes at industrial premises of the former Almaz Works hi Kyiv and to produce banknote paper at Malyn Paper Mill. The work on creating capacities started in spring 1992, and in November of the same year the first coins were minted at Zaporizhstal Plant and Artemivsk Non-Ferrous Materials Plant. The first capacities for banknote printing were put into operation. In March 1994, and the Banknote Printing Works began to function in 1996.

There appeared a new problem. Where to keep the national currency? It is hard to believe that in 1993 the gold reserves of the Ukrainian State were kept in an ordinary building - the warehouses of Perlyna Ltd. When the jewellery factory was privatized and became sole proprietorship the national currency was kept hi the bomb-proof shelter of Kyiv footwear Factory where there were no shelves, ventilation, and other conditions, Ukraine was badly in need of a mechanized vault which would provide a reliable safekeeping of money and state treasury. The Dniprovsky Design Institute was invited to this important task. In June 1996, right before the monetary reform, the construction was completed.

However, the problem of its own production base was not resolved by putting these installations into operation. Ukraine continued purchasing banknote paper abroad, which was an expensive matter for young state. It was only natural to create a closed cycle of money production by constructing the Banknote Paper Mill. It was decided that the enterprise would be built in Malyn, Zhytomyr Region, in spring 1997 the Banknote Paper Mill was put into operation. Now the mill produces paper of high quality. Recently the Banknote Paper Mill got an access to the international market, having won a tender for producing banknote paper for the needs of India.

Практична заняття 25

Banks make their profits by lending Ihe money which cus-loiners deposil wilh them to olhers who need il for personal or business reasons. Mosl people need more money lhan Ihey have currently available al some time in their lives.

To be a borrower you must be a customer of the bank be­cause Ihe money will be lent lo you Ihrough a bank account. There are Iwo ways in which you may borrow. The first, and easy, is to spend more money than you have in your current accounl — lo overdraw. The second, and the normal way of borrowing larger amoun Is or for a long period of lime is Ihe loan.

If a manager permils an overdraft on currenl accounl he is likely lo sel a limit lo Ihe size of Ihe overdraft and may stipu­late a dale by which Ihe accounl is back in credil. Businesses whose payments and rcceipls are often irregular will fre-quenlly need lo use overdraft facilities and Ihey are often granted lo private customers as well particularly when Ihe manager knows lhal regular payments are made directly into the account.

If a loan is granted il will be a fixed sum immediately avail­able for a fixed period of time. The principal and Ihe inleresl on it may all become due for paymenl at the end of lhal pe­riod bul for personal loans il is common lo arrange lhat the loan and interest are repaid in equal regular instalment over the period of the loan. A separate account is opened lo record Ihe repayments as Ihey are made.

Whether you are seeking money for business or personal reasons there are a number of Ihings lhal Ihe manager will want to know before he is prepared to grant your request. The obvious facts will be the amount that you seek and the arrangements for re-payment that you are able to suggest. You need to tell him something about the purpose of the loan, a business loan is likely to help you make profits out of which the loan can be repaid with interest and he will wish to judge for himself whether or not this is likely. Personal loans usu­ally have to be repaid out of an income which will not get any bigger and the manager will be particularly anxious to ensure that you are not being loo optimistic. In deciding this he will be considerably assisted by his knowledge of you and his esti­mate of your character.

Sometimes people do nol ask for enough money because they are anxious about the burden of Ihc repayments. The manager will be wise enough to try and ensure thai you will have sufficient amount of money to do what you want to do. Finally he will consider whether or not you really will be able to repay and what kind of security you can offer against the possibility that you do not repay. In the ease of a business Ihe manager may well want to sec well prepared, relevant docu­ments such as profit and loss accounts and balance sheets for the most recent years. He would also ask about the expected return from the use of the money and want to see soine fig­ures upon which you have based your calculations. Fora busi­ness good security might be one or more of the assets of the business whilst personal loans are often secured by such things as life insurance policies on which the bank is making regular payment for you or the deeds of your house.

Questions on the text:

1. What two kinds of borrowings are possible?

2. In what circumstances an overdraft on current account is permissible?

3. How are personal loans usually repaid?

4. Will you pay back more than you borrowed? What will the difference be?

5. What information will the manager require for a per­sonal loan?

6. What information will he require for a business loan?

7. What other things will he lake into account?

8. What will he need from you to make the loan safer for him?

9. What does a businessman mean by his expected rate of return?

10. Why might this be important to the bank manager?

11. What kind of things might you offer as collateral for a personal loan?

Практичне заняття 26

There are two general reasons for using a bank account.. The first and most common is thel'onvenicncc and safety pro­vided by a current account at a bank. The second is that small and perhaps regular surpluses are available to be saved, and for this purpose a bank provides deposit accounts.

A deposit account will not offer a high rale of interest and would not be the best way to save large sums of money for any long period of time, but it is designed to make saving simple, convenient and safe. II is especially appropriate for those who may save small amounts from lime to lime without any planned regularity or for those who wish to save for a particular purpose in the immediate future, for example for; annual holidays or for the purchase of a major item such as a| car.

Most customers of a bank who have opened a deposil ac­count will also have a current account and Ihis makes the transfer ol amounls of money from one lo Ihe other an easy matter. Regular payments inloade[>osit account can be made through a standing order lo the bank who will automatically transfer the agreed amount according lo your instructions. Other payments are made on standard forms but it is most convenienl and provides a useful record if the depositor uses a paying in book. Intcresl is calculated every^ix months and added lo the account. The rale of interest varies from time lo lime and is publicly adverlised in any bank. Because Ihe bank uses money deposited with them to lend to others it normally requires aboul seven days nolice of inlcnlion lo withdraw money from a deposit account, but unless Ihcre is a heavy demand for money Ihey arc nol likely lo insist on Ihis and cash is often immediately available to those who wish lo wilh-draw it. There is an assumption lhal such nolice was given and you would lose sevei, day's inleresl on Ihe money.

The increasing need for securily and Ihe use of computers in wage payments have combined to make it more common to have a bank account than lo be without one. This kind of account is a current one and its most common use is a single regular paymenl in either a weekly wage or a monthly salary and regular payments oul to meet Ihe normal everyday ex­penses. Mosl payments are still made by cheque although the use, of Ihe standing order or the direct debit is becoming very common. II is normally expecled lhal a current account-will remain in balance and customers who regularly maintain an agreed minimum balance are often given Ihe services of the bank without charge. In general, however, charges are made which vary with the size of the balance, Ihe amount of use of the bank's services and Ihe number of Iransaclions. If the account is overdrawn a further charge, which is interest on the overdrawn amount, is also made.

Overdrafts are not permitted automatically and anything other than a small temporary overdraft would have to be by agreement wilh the bank manager. Such a facility- is often useful particularly when there is a shorl lerm disbalance be­tween income and cxpendilure. On the olher hand, since money in a current account does not attract interest, it is not a good idea to maintain large cash balances, these would be belter transferred to a deposit account or to an alternative form of saving.

Questions on the text:

1. What are the two main reasons for opening a bank ac­ count?

2. Which type of account is used by those who wish to save?

3. What kind of saving is this type of account most suited to?

4. What is a standing order?

5. Why does a bank sometimes need notice of intention to withdraw money from saving accounts?

b'. What is the most common use of current accounts?

7. Why are some customers not charged for the facility of a current account?

8. Why is it not a good idea to retain large balance in a cur­ rent account?

Практичне заняття 26

Практичне заняття 27