Vocabulary Focus

Ex. 1. Mind the use of the verbs lend, borrow, owe.

1. If you borrow money, somebody gives you it on a temporary basis:

He is always borrowing money but he usually pays it back quite quickly.

2. Lend is the opposite of borrow. It is an irregular verb:

Could you lend me some money? The bank has lent us $5000.

3. Owe means to have debts; to need to pay or give something to someone because they have lent money to you, or in exchange for something they have done for you

I owe Janet ten pounds. We still owe $1000 on our car (= We still need to pay $1000 before we own our car). I think you owe (= should give) me an explanation/apology.

Complete the sentences with the correct form of the verbs lend, borrow, owe.

1) She … some money from me. 2) The bank … me $12,000. 3) I … five pounds from my brother and forgot to pay it back. 4) We … money from the bank at 8% interest. 5) If you … someone money, you have to give them a particular amount of money because you have bought something from them or have … money from them. 6) Money that you … is called a debt. 7) The word is … from Latin. 8) The bank will … you money at a lower interest if you provide a security.

Ex. 2. The text contains a number of common verb-noun partnerships (e. g. to lend money, to finance international trade). Match up the verbs and nouns below to make common collocations. Give their Russian equivalents.

A	B
influence restrain exchange issue make offer raise receive underwrite charge do	advice bonds business currencies deposits funds interest profits security issues monetary base inflation

Ex. 3. Match the definitions in A with the words from the text in B.

A	B
the currency supplied by the Central bank both to the commercial banks and to private circulation	to underwrite securities
to place money in a bank; or money placed in a bank	yield
how much money a loan pays, expressed as a percentage	maturity
available cash, and how easily other assets can be turned into cash	to (a) deposit
the date when a loan becomes repayable	deregulation
to guarantee to buy all the new shares that a company issues, if they cannot be sold to the public	a monetary base
when a company combines with another one	liquidity
taking care of all a client’s investments	a merger
ability to pay liabilities when they become due	portfolio management
a group of companies, operating in different fields, that have joined together	a conglomerate
when a company buys or acquires another one	solvency
the ending or relaxing of legal restrictions	a takeover

Ex. 4. Match the Russian words and word combinations from A with their English equivalents from B.

A	B
последний кредитор в критической ситуации	a collateral/security
обязательный резерв	to restrain inflation
сдерживать инфляцию	spread/margin
платежеспособность	a lender of last resort
разница между себестоимостью и продажной ценой;	a required reserve
срок погашения платежа	credit standing/rating/ worthiness
погасить долги	a merger
доход по ценным бумагам с фиксированным процентом	to secure/guarantee
поглощение	maturity
слияние	to settle a debt
учетная процентная ставка	solvency
имущество, активы	yield
обеспечение кредита, залог	a discount interest
гарантировать, ручаться	a takeover
кредитоспособность	to make a loan
получить заем	assets
предоставлять ссуду	to make loan

Comprehension

Ex. 1. Answer the questions:

1. How will you comment on the fact that bank is an intermediary between a depositor and a borrower?

2. What are basic types of banks?

3. What are the key roles of the central bank?

4. What are the basic instruments that central banks use to regulate money supply?

5. What is a discount interest rate?

6. For what purposes may the central bank regulate interest rates?

7. How do the commercial banks earn money?

8. What kind of services do commercial banks offer to their clients?

9. What are the main functions of merchant banks in England?

10. How do investment banks in America differ from merchant banks in England?

11. In what way did deregulation in America and Europe influence the banking system?

Ex. 2. Are the following sentences true or false? Say why.

1. If the bank lends money to a company, the bank is one of the company’s debtors.

2. If you borrow money from the bank at a variable rate of interest, you might have to pay back more than you think you will.

3. Creditors prefer low interest rates.

4. Debtors prefer high interest rates.

Text 2