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Учебное пособие «Профильные тексты по английскому языку для специальности 030912 Право и организация социального обеспечения
Разработал:
Преподаватель:
Сорокина А.И.
Волгоград 2015
Lesson 1.
Read and translate the text.
WHAT IS A BANK?
As important as banks are to the economy as a whole and to local communities, there is much confusion about exactly what a bank is. Certainly banks must be identified by the functions (services or roles) they perform in the economy. The problem is not only that the functions of banks are changing, but the functions of their principal competitors are changing as well. Indeed, many financial institutions - including leading security dealer, brokerage firms, and insurance companies - are trying to be as similar as possible to banks in the services they offer. And bankers, in turn, are challenging these nonbank competitors by lobbying for expanded authority to offer real estate and full-service security brokerage, insurance coverage, investments in mutual funds, and many other new services.
A good example of the strenuous efforts on the part of many institutions to become bank-like occurred in the 1980s when several large brokerage and security firms, including Merrill Lynch and Dreyfus Corporation, moved aggressively to enter the banking business by establishing what they called nonbank banks. They were aware that under U.S. law any institution offering deposits subject to withdrawal on demand (such as by writing a check) and making loans of commercial or business nature is a bank. Merrill Lynch and other nonbank firms decided they could skirt federal laws avoid regulation, and still sell bank- like services to the public simply by stripping the banks they controlled of either their business loans or their checking accounts. However, the Federal Reserve Board, unhappy with the invasion of banking by these pseudo-banks, decided to include the making of loans to consumers (individuals and families) as one of the activities that differentiated banks from other financial institutions thus bringing Merrill Lynch and similar businesses under the definition of a bank, subject to stringent government regulation.
Leading security and brokerage firms then sued in federal court, charging that the Federal Reserve Board had exceeded its authority. In 1984, the federal courts agreed and ordered the Fed to allow the formation of nonbank banks and grant them access to federal deposit insurance. Whithin a few weeks of their authorization, dozens of applications for nonbank banks were filed. Among the leading financial service companies organizing nonbank banks were E.F Hutton, J.C. Penney and Sears Roeback. Moreover, several leading bank holding companies, including Citicorp and Chase Manhattan, launched their own nonbank banks because, unlike full-service bank offices, they could establish these service units freely across state lines. In 1987, Congress put a halt to further nonbank bank expansion by subjecting the parent companies of nonbank banks to the same regulatory restrictions that traditional banking organizations face. Moreover, Congress took one last shot at pinning down the legal definition of a bank, defining it as a corporation that is a member of the Federal Deposit Insurance Corporation. A clever move, indeed-under U.S. law a bank is not what a bank does, but rather its identity depends on which government agency insures its deposits!
The result of all these legal maneuverings is a state of confusion in the public’s mind today over what is or is not a bank. The safest approach is probably to view institutions in terms of what types of services they offer the public. Banks are those financial institutions that offer the widest range of financial services-especially credit, savings, and payments services-and perform the widest range of financial functions of any business firm in the economy. This multiplicity of bank services and functions has led to banks being labeled “financial department stores" and to such familiar advertising slogans as Your Bank-a Full- Service Financial Institution.