Каирсапова Сборник дополнителных 2014

and to keep the lid on bond yields. And there has been a huge dollop of fiscal easing. Some countries’ budget deficits have soared to 10% of GDP.

The fiscal packages have proved rather less popular than monetary easing. Initially they were seen as bail-outs for greedy bankers. But the focus of criticism has shifted to the deterioration of government finances and the potential for higher future taxes, borrowing costs and inflation.

An eerie parallel seems to be at work. There was a time, back in the 1950s and 1960s, when Keynesian stimulus packages were seen as costless. Governments thought they could fine-tune their economies out of recession. Eventually it was realised that the ultimate result of too much stimulus was higher inflation and excessive government involvement in the economy. Keynesian demand management was abandoned in favour of the monetary approach. The past couple of years have demonstrated that the use of monetary policy had its costs too, not in consumer inflation but in rising debt levels and growing asset bubbles.

The authorities never even considered allowing the financial crisis to continue unhindered. The damage to the economy would have been too great. But the costs of this latest round of government action will be big. Investors will have it in mind during the next boom that governments will rescue the largest banks, slash rates, intervene in the markets and run huge deficits. In other words the moral-hazard problem will be even greater.

Before we get there, however, the authorities will have to work out an exit strategy. Past cycles have shown that the tightening phase, after a long period of low rates, can be very dangerous. Bond markets were savaged in 1994 when the Federal Reserve started to raise rates from 3%. What will bond markets do if central banks also unload the holdings acquired during the crisis? And how will stock markets perform if interest rates and taxes are being raised at the same time?

Given these risks, the new era will surely be a lot more fragile than the one that prevailed in the 1980s and 1990s. There is simply more scope for policymakers to go wrong.

In addition, the global financial system has lost its anchor. When Bretton Woods broke down and the last link to gold was severed, there was in theory nothing to stop governments from creating money. It took independent central banks, armed with inflation targets, to reassure

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creditors. But now central banks have shown they have another priority apart from controlling inflation: bailing out the banks.

The new era is one in which governments are using floating exchange rates, near-zero interest rates and vast fiscal deficits to protect their economies. None of this is good news for creditors, who will surely not put up with the situation for long. The actions they take to protect their portfolios—demanding higher bond yields, pushing for fixed exchange rates—will define the next economic system.

Complete the sentences:

1.………. would cut interest rates and, eventually, the ………. would

……….

2.………. that savers earned lower returns on their ……….., they were usually compensated by a rebound in the value of their

………….

3.Whether that was down to the brilliance of central banks or the deflationary pressures emanating from China and India is still

…………

4.The authorities have also had to………., using the ……….. of central banks to ensure the funding of clearing banks and …………

on bond yields.

5.But the focus of criticism has shifted to the deterioration

……………and the potential for higher future taxes, …………costs

and inflation.

6.The past couple of years have demonstrated that the use of ………..

had its costs too, not in consumer inflation but in rising………… and growing asset bubbles.

7.The ………..to the economy would have been too great.

8.Investors will have it in mind during the next boom that governments will …….. the largest banks, ………rates, intervene in the markets and ……….. In other words the moral-hazard problem will be even greater.

9.In addition, the global…………has lost its……….

10.The new era is one in which governments are using floating………….., near-zero interest rates and vast fiscal deficits to……….their economies.

Check up your completing against the original sentences in the article and correct your mistakes

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№3

Read the following report about currency rates and translate this text from English into Russian in writing

In a quiet week, the Euro US dollar continued its upward course, again trading at nearly three Deutschmarks. The dollar was supported by commercial demand, as normal international bank trading declined and the market's major operators began squaring their positions for the yearend. The forecast of lower US interest rates and of a cut in the Federal Reserve discount rate did not lead to any downturn in the US currency and the dollar closed at US 3.4768.

The US was hardly changed, moving in a narrow range in lack-lustre trading. There was no central bank intervention to weaken the Euro against the mark. Trading volumes were low as the markets decline towards the end of the year.

Sterling has been volatile lately, due to its status as a petrocurrency, and at the beginning of the week it fell against the dollar and other major currencies, as North Sea oil prices eased on the European spot market. Friday saw a slight recovery, however, due to the covering of short positions, and at close of trading the pound stood at USD 1.3016.

Falls in oil prices have opposite effects on the pound and the yen, as Japan needs to import nearly all its considerable energy requirements. This has meant that the yen has continued its steady climb, levelling slightly towards the end of the week. Against the dollar it has remained little changed since mid-January, but the yen has outperformed European currencies for most of the year. Sterling started the year at around JPY 325, touching a peak of JPY 344 on May 14. It closed on Friday at JPY 337.

№4

Translate the following sentences from Russian into English in writing

1.Еще в 80-х годах положение аудиторов начало меняться в мелочах.

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2.Чтобы оказать еще большее давление, было также рекомендовано, чтобы аудиторы выбирались через открытые тендеры и на периодической основе.

3.Ситуация с вознаграждением аудиторов стала одной из тех вещей, что продаются с убытком для привлечения покупателей, к которым они смогли приспособиться.

4.На протяжении многих лет GAAS и научные исследования

поддерживали более эффективные методы проведения аудиторской работы, используя аналитический обзор и некоторые зависимости системы внутреннего контроля бухгалтерского учета клиента.

5.Многие исследования были проведены также для поиска приемлемых методов отбора проб, которые обеспечили бы некоторую математическую определенность и основу для возможности оценки влияния ошибок, найденных в денежном выражении.

Unit 4

№1

Read the following article

Translate this article from English into Russian

Answer the following questions:

1.Where are the "headquarters" of the banking secret society?

2.What giant companies have their members in this society?

3.What is the aim of the secret banking society?

4.How do the secret society act in relation to the other banks?

5.What is the main aim of this society?

6.What famous people have been attending the meetings of Bilderberg?

7.Why do you think these societies are keeping their plans and identities in secret?

A Secretive Banking Elite Rules Trading in Derivatives

2010-12-12, New York Times

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On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan. The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential. Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk. In theory, this group exists to safeguard the integrity of the multitrillion dollar market. In practice, it also defends the dominance of the big banks. The banks in this group have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available. Banks’ influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small. The size and reach of this market has grown rapidly over the past two decades. Pension funds today use derivatives to hedge investments. States and cities use them to try to hold down borrowing costs. Airlines use them to secure steady fuel prices. Food companies use them to lock in prices of commodities like wheat or beef.

Inside the secretive Bilderberg Group

2005-09-29, BBC News

How much influence do private networks of the rich and powerful have on government policies and international relations? One group, the Bilderberg, has often attracted speculation that it forms a shadowy global government. Every year since 1954 they have brought together about 120 leading business people and politicians. At this year's meeting in Germany, the audience included the heads of the World Bank and European Central Bank, Chairmen or Chief Executives from Nokia, BP, Unilever, DaimlerChrysler and Pepsi ... editors from five major newspapers, members of parliament, ministers, European commissioners ... and the queen of the Netherlands. The chairman ... is 73-year-old Viscount Etienne Davignon. In an extremely rare interview, he played down the importance of Bilderberg. "I don't think we are a global ruling class because I don't think a global ruling class exists."

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Will Hutton ... who attended a Bilderberg meeting in 1997, says people take part in these networks in order to influence the way the world works, to create what he calls "the international common sense". And that "common sense" is one which supports the interests of Bilderberg's main participants. For Bilderberg's critics the fact that there is almost no publicity about the annual meetings is proof that they are up to no good. Bilderberg meetings often feature future political leaders shortly before they become household names. Bill Clinton went in 1991 while still governor of Arkansas, Tony Blair was there two years later while still an opposition MP. All the recent presidents of the European Commission attended Bilderberg meetings before they were appointed. Informal and private networks like Bilderberg have helped to oil the wheels of global politics and globalisation for the past half a century.

Bilderberg mystery: Why do people believe in cabals?

2011-06-07, BBC News

The secretive Bilderberg Group ... is bringing together the world's financial and political elite this week. Conspiracy theories abound. It's only recently that the media has picked up on the Bilderbergers. Meetings are closed to the public and the media, and no press releases are issued. In the manner of a James Bond plot, up to 150 leading politicians and business people are to gather in a ski resort in Switzerland for four days of discussion about the future of the world. Meetings often feature future political leaders shortly before they become household names. Under the group's leadership of former US Secretary of State Henry Kissinger and one-time EU vice president, Viscount Davignon, the aim is purportedly to allow Western elites to share ideas. But conspiracy theorists have accused it of everything from deliberately engineering the credit crunch to planning to kill 80% of the world population. Denis Healey, co-founder of the group, told the journalist Jon Ronson in his book Them that ... "The confidentiality enabled people to speak honestly without fear of repercussions." Secret cabals extend beyond the Bilderberg Group. The Illuminati ... is alleged to be an all powerful secret society. The Freemasons is another secret fraternity society. The conspiracy theorists may get overexcited, but they have a point, says Prof Andrew Kakabadse. The group has genuine power that far outranks the World Economic Forum, which meets in

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Davos, he argues. And with no transparency, it is easy to see why people are worried about its influence. The theme at Bilderberg is to bolster a consensus around free market Western capitalism and its interests around the globe, he says. "There's a very strong move to have a One World government in the mould of free market Western capitalism."

Are the following sentences true or false:

1.Nine members of the elite society are holding their names in secret.

2.Derivatives are used to protect the economy from risk

3.Banks of the secret group prevent other banks from entering the market.

4.Every future political leader has to attend the meetings of Bilderberg.

You are a financial journalist on a British newspaper

You are going to have an interview with one of Bilderberg’s group

Think about questions you may ask

Refer back to the article and write a summary of the article

№2

Read the following text. Translate this text from English into Russian

Collection

When banks handle documents in order to obtain acceptance and/or payment, following the instructions given to them, this is called «collection». The exporter presents to his bank an application form with the documents attached. This bank makes out a collection order and passes it over to its correspondent bank in the country of the importer. The correspondent bank or some other bank may present the documents to the importer or pass them over to another collecting bank. This presenting bank presents the documents to the importer. Collecting banks do not take responsibility for acceptance or payment.

There exist two types of collections. Collections may be documentary or clean. The documentary collection is the collection of

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commercial documents or the collection of financial documents together with commercial documents. The collection of only financial documents is called clean. Commercial documents are: invoices, bills of lading, waybills and certificates. Financial documents are: bills of exchange, promissory notes, cheques and payment receipts.

Documentary letter of credit

When a buyer in one country wants to pay a seller abroad he asks his bank to «issue» or to «open» a letter of credit. It means that the buyer's bank issues a documentary letter of credit. It is an agreement with banks, made by a buyer, provided certain conditions are fulfilled.

The issuing bank asks its correspondent bank — usually in the seller's country — to advise and confirm the credit. The advising bank informs the seller that the credit has been opened. As soon as the seller receives the credit, he checks it and if he can meet its requirements, the seller ships the goods. At the same time the seller sends the documents which prove shipment of the goods to the bank where the credit is available. The bank checks the documents against the credit. If the documents comply with the requirements of the credit, then the nominated bank will make payment. The bank which made payment to the seller sends the documents to the issuing bank for reimbursement. The issuing bank after checking the documents reimburses the bank that has paid. The documents are then released to the buyer against payment.

There are many types of documentary credits. A revocable credit can be amended or cancelled at any time without prior warning or notification to the seller. An irrevocable credit can be amended or cancelled only with the agreement of all parties thereto. As there are often two banks involved, the issuing bank and the advising bank, the buyer can ask for an irrevocable credit to be confirmed by the advising bank. If the advising bank agrees, the credit becomes a confirmed credit.

Credit

Credit is a term used to denote transactions involving the transfer of money or other property on promise of repayment, usually at a fixed future date. The transferor thereby becomes a creditor, and the

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transferee becomes a debtor. Hence, credit and debt are simply terms describing the same operation viewed from opposite sides.

Types of Credit

The principal classes of credit are the following:

- commercial credit, which merchants extend to one another to finance production and distribution of goods.

- investment credit, used by business firms to finance the acquisition of plant and equipment and represented by corporate bonds, long-term notes, and other proofs of indebtedness.

•bank credit, consisting of the deposits, loans, and discounts of depository institutions.

•consumer or personal credit, which comprises advances made to individuals to enable them to meet expenses or to purchase, on a deferred - payment basis, goods or service for personal consumption.

•real-estate credit, composed of loans secured by land and buildings.

•public or government credit, represented by the bond issues of national governments.

•nternational credit, which is extended to particular governments by other governments, by the nationals of foreign countries, or by international banking institutions, such as the International Bank for Reconstruction and Development.

Function of Credit

The principal function of credit is to transfer property from those who own it to those who wish to use it, as in the granting of loans by banks to individuals who plan to initiate or expand a business venture. The transfer is temporary and is made for a price, known as interest, which varies with the risk involved and also with the demand for, and supply of, credit.

Credit puts to use property that would otherwise lie idle, thus enabling a country to more fully employ its resources. Without credit, the tremendous investments required for the development of the largescale enterprise on which the high living standards of the industrialized world are based would have been impossible.

The use of credit also makes feasible the performance of the complex operations involved in modern business without the constant handling of money. Credit operations are carried out by means of documents known as credit instruments, which include bills of exchange,

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money orders, cheques, drafts, promissory notes, and bonds. These are usually negotiable instruments; they may legally be transferred in the same way as money. When the party issuing the instrument desires to prevent its use by anyone other than the party to whom it is issued, he or she may do so by inscribing the words «not negotiable» on the instrument.

Collateral

Collateral is a security that a borrower gives to a creditor to guarantee repayment of a loan. This security may be in the form of a mortgage on buildings, physical property such as consumer goods and business inventories, stocks and bonds, negotiable instruments, bills of lading, or certain intangible properties such as patents and copyrights. It is usually necessary to supply some kind of collateral in business transactions, especially when loans are being made by banks or other financial institutions.

Complete the following sentences:

1.This bank makes out a……….and passes it over to its correspondent bank in the country of the importer.

2.……….. banks do not take responsibility for…………….

3.Commercial documents are: ………………..

4.As soon as the seller receives the credit, he checks it and if he can meet…………., the seller………….

5.A…………….. can be amended or cancelled at any time without prior warning or notification to the seller.

6.Credit is a term used to…………………or other property on promise of repayment, usually at a……….future date.

7.……………used by business firms to finance the acquisition of plant and equipment and represented by corporate bonds, longterm notes, and other proofs of indebtedness.

8.Credit puts to use property that……………, thus enabling a country to more fully……… its resources.

9.……… operations are carried out by means of documents known as ………….., which include…………, money orders,……….., drafts,…………, and bonds.

10.………. is a security that a borrower gives to a creditor to……………...

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