AN ENGLISH COURSE FOR STUDENTS OF FINANCE. Учебно-методический комплекс

BLOCK 1

nancial system, determining the volume of credit available, attracting savings, and setting interests rates and security prices.

The definition of savings differs depending upon what type of unit in the economy is doing the saving. *For households, saving is what is left over out of current income after current consumption expenditures are made. In the business sector, savings include current net earnings retained in the business after payment of taxes, stockholder dividends, and all other cash expenses. Government saving arises when there is a surplus of revenues over expenditures.

Most of the funds set aside as savings flow through the financial markets to support investment by business firms and governments. Investment generally refers to the acquisition of capital goods, such as buildings and equipment, and the purchase of inventories of raw materials and goods to sell. The makeup of investment varies with the particular unit doing the investing. For a business firm, expenditures on fixed assets, such as buildings, equipment, and inventories are investment expenditures. Households invest when they buy a new home. However, household purchases of furniture, automobiles, and other durable consumer goods are generally classified as consumption spending (i.e., expenditures on current account) and not investment (i.e., expenditures on capital account). Government spending for public facilities is another form of investment.

Modern economies require enormous amounts of investment in capital goods - drill presses, warehouses, schools, airports, and thousands of similar items – in order to produce goods and services for consumers. Investment in new equipment increases the productivity of labor and ultimately leads to a higher standard of living. However, investment often requires huge amounts of funds, often far beyond the resources available to a single firm or government. By selling financial claims (i.e., stocks, bonds, etc.) in the financial markets, though, large amounts of funds can be raised quickly, and the loan repaid out of future income. Indeed, the financial markets operating within the financial system make possible the exchange of current income for future income.

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AN ENGLISH COURSE FOR STUDENTS OF FINANCE

Those who supply funds in the financial markets receive only promises in return for the loan of their money. *These promises are packaged in the form of attractive financial claims and financial services, such as stocks, bonds, deposits, and insurance policies. Financial claims promise the supplier of funds a future flow of income, which may consist of dividends, interest, capital gains, or other returns. But there is no guarantee that the expected flow of future income will ever materialize. However, suppliers of funds to the financial system expect not only to recover their original commitment of funds but also to earn additional income as a reward for waiting and for the assumption of risk.

Vocabulary Notes

1.financial claims – финансовые претензии;

2.low-risk – низкий риск сбыта;

3.means of converting – конвертируемое средство;

4.financial assets – финансовые активы;

5.tax revenues – налоговые поступления;

6.checking accounts – проверка счетов;

7.means of payment – средства платежа;

8.debit-card – расчетная карта (дебетовая карта);

9.electronic means of payments – электронное средство платежа;

10.spendable cash – свободная наличность;

11.long-term capital investments – долгосрочные капиталь-

ные инвестиции;

12.financial market – финансовый рынок;

13.acquisition of capital goods – приобретение капитала;

14.fixed assets – основные активы;

15.consumer goods – потребительские товары;

16.productivity of labor – производительность труда;

17.vulnerable to collapse – расположен (уязвимый) для крушения;

18.bill is said to be dishonored – говорят, что вексель не оп-

лачен.

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EXERCISES

1.Выпишите выделенные термины из текстов А и В, пе- реведите их и запомните,

2.Найдите в словаре перевод следующих глаголов, за- пишите их и запомните.

3.В отмеченных звездочкой предложениях определите время и залог сказуемых и переведите эти предложения пись- менно на русский язык (см. Грамматический справочник131 стр.

4.Прочтите текст А и переведите его на русский язык.

5.Запишите определения своими словами на англий- ском языке каждой функции денежной системы, используя новые слова.

6.Прочтите текст В и найдите в нем предложения, ко-

торые характеризуют "Financial Markets".

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AN ENGLISH COURSE FOR STUDENTS OF FINANCE

TEST

1. Дополните следующие предложения, выбрав соответ- ствующее по смыслу слово из колонки справа.

3.Those savings … through the financial 6. supplier markets into investment so that more 7. access goods and services can be produced in

the future.

4.Consumers frequently need credit to … a home.

5.Plastic credit cards issued by many banks give the customer instant … to short-term credit.

6.For a business firm, … on fixed assets, such as buildings are investment expenditures.

7.Financial claims promise the … of funds a future flow of income.

2.Выберите русские эквиваленты к английским словам в колонке слева.

Во всех тестах нужно записывать ответы в виде комбинации цифр, например, 2–5.

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3. Выберите английские эквиваленты к русским словам в колонке слева.

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AN ENGLISH COURSE FOR STUDENTS OF FINANCE

Additional Practice 1.1

US meets the challenge of globalization

Pre – reading questions:

(a)Is America as confident now of dominating the world banking system as it was ten years ago?

(b)What aspect of globalization, the theory or the detail, now needs more work?

Ten years ago US bankers and brokers talked almost messianically about globalization. Capital barriers would fall, there would be seamless 24-hour trading across time zones and fullservice institutions would serve farmers and car workers in Osaka.

As the US capital markets enter the 1990s, the reality is that globalization is still in its early stages and that it will be as much a trend of the next decade as it was in the last. There has, however a qualitative change in the rhetoric.

Then, globalization was seen in the US as on opportunity. Now the US is far less confident of its ability to dominate the global market and is showing signs of falling behind its competitors. Globalization is now an urgent challenge.

Mr. Curtis Welling, managing director in charge of equities at First Boston, says, 'The US has had a very geocentric view. Our hegemony over world capital flows was almost regarded as a birthright. As far as important capital flows are concerned, there was a real danger of the world passing us by. The US was in danger of becoming irrelevant.'

While the US was once slow to realise its competitive position in the world financial markets could be eroded. Mr. Welling believes that there is a growing awareness of the need to act quick-

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ly to position the nation's markets and financial institutions for the future.

This concern has been crystallised in regulatory initiatives, legislative proposals and product innovations. Progressive attitudes at both the US Federal Reserve and the Securities and Exchange Commission (SEC) are central to these efforts.

The SEC, which has just formed an Office of International Affairs, has shifted into top gear to harmonise regulations with overseas counterparts to promote the free and efficient flow of capital. The nuts and bolts of clearance and settlement, for example, are a priority.

Mr. Welling of First Boston, puts the challenge in graphic terms: "We have gone about as far as we can go with broadbrush conceptual descriptions of the global market. We can see the house, it looks great but nobody can live in it until the plumbing and electricity is in place.'

In spite of all the talk of the global markets, it is starting that US pension funds have committed less than 3% of their $2,600 billion in assets to non-US securities. One key reason for this is that investors and traders have to negotiate a minefield of different regulations when operating in overseas markets.

Comprehension

In giving your answers to the following questions note the line(s) in the text where you found your answer.

1. (a) What was the American view of globalization ten years

ago?

1)That it was a Utopian idea, impossible to achieve.

2)They thought it would soon create a single world banking system.

3)Different areas of the world would still require different banks.

4)Difference in time around the world would still cause problems.

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AN ENGLISH COURSE FOR STUDENTS OF FINANCE

(b) How does the second paragraph indicate that American ideas about globalization were incorrect?

2.In what ways were the American attitudes to globalization mistaken? (more than one answer).

1)The US believed it had an automatic right to lead the world banking system.

2)The US did not act competitively enough.

3)The US thought the rest of the world was irrelevant.

4)America looked at globalization too much from its own viewpoint

3.Are the following statements True or False? Identity the lines in the text where you find your answers.

1)The SEC has set up a special body to work on institutional matters.

2)Details on how to move capital between countries are finalized.

3)Mr. Welling feels more work is needed on the global market concept.

4)'nuts and bolts' and 'plumbing and electricity/ have similar meanings.

Vocabulary

In English (and other languages) words originating in one area, e.g. sport, often are used in a different area, e.g. business, with a new meaning. When words are used like this we call them metaphors,

4. See if you can match the words with the area they were first used in. (One has been done for you.)

messianically seamless

shifted into top gear nuts and bolts minefield

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5. Questions 1-5 show examples of metaphors used in the

text.

1.'messianically' means:

1)casually

2)uncertainly

3)passionately

4)knowledgably

2.'seamless' means:

1)continual

2)uncontrolled

3)without boundaries

4)hectic

3.'shifted into top gear' means:

1)adopted a new attitude

2)began to work hard

3)reviewed its ideas

4)moved its offices

4'nuts and bolts' means:

1)theories

2)documents

3)agreements

4)detailed rules

5.'minefield' means:

1)discovered situation

2)complex situation

3)dangerous area

4)newly created field

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AN ENGLISH COURSE FOR STUDENTS OF FINANCE

BLOCK 2

INFORMATION FOR STUDY

A. The Study of Money and Capital Markets

*The money and capital markets are the mechanism for converting the public's savings into investments in buildings, machinery and equipment, public facilities, and inventories of goods and services that make it possible for the economy to grow, for new jobs to be created, and for living standards to rise. *It is the financial system that handles most of the payments made for purchases of food, clothing, shelter, automobiles, and tens of thousands of other goods and services. That system also generates credit to sustain the public's spending and standard of living and stores future purchasing power in the form of stocks, bonds, and other securities. And the money and capital markets make possible the liquidation of those securities whenever cash is needed for immediate spending.

The financial system offers risk protection to businesses and individuals through sales of insurance policies and hedging instruments such as options, futures, and swaps. And both domestic and international financial systems today carry the great burden of public policy, serving as the conduit for government actions designed to promote economic growth, a stable international economy, low unemployment, and stable prices of goods and services.

B. The Money Market versus the Capital Market

The flow of funds through the financial markets may be divided into different segments, depending upon the characteristics

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