- •Предисловие
- •Unit 1. Economic environment a. Text what is economics all about?
- •B. Dialogue business climate in russia
- •Vocabulary list
- •Exercises
- •Discussion
- •In order to get prepared for participation in the class discussion of the above questions, write several paragraphs on the following:
- •Reading practice
- •Unit 2. Public finance a. Text finance and financial system
- •B. Dialogue budget organization and budget process
- •Vocabulary list
- •Exercises
- •Discussion
- •A) The Budget Message of the Mayor
- •April 27, 1995
- •In order to get prepared for participation in the class discussion of these questions, write several paragraphs on the following:
- •Reading practice
- •Unit 3. Fiscal management a. Text financial policy. Fiscal sphere
- •B. Dialogue effective fiscal policy
- •Vocabulary list
- •Exercises
- •A) Financial Policy
- •B) Fiscal Policy in the uk
- •Discussion
- •A) Multiyear Budgeting
- •B) Types of Budget Classification
- •A) Fiscal Policy in Transition Economies: a Major Challenge
- •B) On Macro- and Microeconomics
- •In order to get prepared for participation in the discussion of the questions, write a short essay on the following:
- •Reading practice
- •Transition Economies Need to Reform Social Safety Nets
- •Unit 4. Central banking. Monetary policy a. Text central banking system
- •B. Dialogue banking system in russia
- •Vocabulary list
- •Exercises
- •Us Activities of Foreign Banking Organizations
- •Discussion
- •A) Is Monetary Policy Needed?
- •B) Payment Systems
- •In order to get prepared for participation in the class discussion of the questions, write a summary of the interview in Ex. 13. Follow the plan suggested below:
- •Reading pra ctice
- •Unit 5. Banking system a. Text commercial banks
- •B. Dialogue
- •Interview With a Bank Manager
- •Vocabulary list
- •Exercises
- •B) Bank Accounts
- •B) The Nature of Banking
- •Discussion
- •A) Bank Loans and Overdrafts
- •In order to get prepared for participation in the class discussion of the questions, write a short essay on:
- •Reading practice
- •Unit 6. Taxation a. Text what are taxes?
- •B. Dialogue taxation in russia
- •Vocabulary list
- •Exercises
- •What Is an Excise Duty?
- •Tax Reform in Developing Countries
- •Discussion
- •In order to get prepared for participation in the class discussion of the questions, write a short essay on the following:
- •Reading practice
- •Unit 7. International monetary system a. Text
- •International monetary institutions
- •B. Dialogue
- •Imf's support for russian reforms
- •Vocabulary list
- •Exercises
- •International Monetary Fund
- •Your Partner ebrd
- •World Bank – International Bank for Reconstruction and Development (ibrd)
- •Discussion
- •In order to get prepared for participation in the class discussion of the questions, write a short essay on:
- •Reading practice
- •Unit 8. Financial markets. The bond market a. Text trading in the bond market
- •B. Dialogue the bond market
- •Vocabulary list
- •Exercises
- •Discussion
- •In order to get prepared for participation in the class discussion of the above questions, write a short essay on the following:
- •Reading practice
- •Unit 9. Financial markets. The stock market a. Text stocks and markets
- •B. Dialogue the corporate securities market in russia
- •Vocabulary list
- •Exercises
- •Discussion
- •A) Bulls, Bears and Stags
- •B) Options and Short Selling
- •In order to get prepared for participation in the class discussion of the questions, write a short essay on the following:
- •Reading practice
- •The New Issue Market
- •Unit 10. Investment activity a. Text
- •Investments
- •B. Dialogue
- •Investment climate
- •Vocabulary list
- •Exercises
- •Investment Companies
- •3 Food Giants Build Local Yogurt Plants
- •Discussion
- •B) Brazil Attracts Foreign Investors
- •C) Investment in the uk
- •In order to get prepared for participation in the class discussion of the questions, write a short essay on the following:
- •Reading practice
- •Investment Skill Is a Rare Commodity
- •Investment Trusts
- •Unit 11. Foreign exchange market. Global financial markets a. Text trading in the foreign exchange market
- •B. Dialogue cornerstone of the global financial market
- •Vocabulary list
- •Exercises
- •The Eurocurrency Market
- •Discussion
- •In order to get prepared for participation in the class discussion of the questions, write several short paragraphs about:
- •Reading practice
- •Unit 12. Financial management a. Text finance function
- •B. Text financial ratios
- •C. Dialogue ratio analysis
- •Vocabulary list
- •Exercises
- •Discussion
- •A) Corporate Governance
- •B) Investment Management
- •A) Investment Decision Making
- •B) Investment Project Appraisal
- •In order to get prepared for participation in the class discussion of these questions, write a short paragraph on the following:
- •Reading practice
- •Unit 13. Accounting a. Text accounting principles and concepts
- •B. Dialogue accountancy in a free-market economy
- •C. Dialogue public and private accountants
- •Vocabulary list
- •Exercises
- •Discussion
- •In order to get prepared for participation in the class discussion of the questions, write a short paragraph, explaining:
- •Reading practice
- •Balance Sheet
- •A. Balance sheet
- •Unit 14. Auditing a. Text performing an audit
- •B. Dialogue auditing in russia
- •Vocabulary list
- •Exercises
- •Ex. 4. Say in a few words what the main text is about. Use the opening phrases from
- •Sweden.
- •Independent Auditors' Report to the Board of Directors and Stockholders of_______Company
- •Discussion
- •In order to get prepared for participation in the class discussion of the questions, write several paragraphs on the following:
- •Reading practice
- •Banking correspondence
- •Dictionary of key words
- •Contents
B) Payment Systems
Public policy responsibility for the payment system usually rests with central banks. Central banks are naturally interested in the payment system because it is a key component of the operation of financial markets and has important implications for the trading efficiency of the real economy. Of particular concern to central banks is clearing and settlement in financial markets where trading results in large payment obligations, such as the securities, commodity, interbank funds, and foreign exchange markets.
The central bank also participates in the payment system as a provider of interbank payment services. The role of the central bank in operating the interbank system depends on the development of a nation's payment system.
The Central Bank of Russia, with the assistance of international experts, has taken steps to draft legislation and oversee the decentralized expansion of Russia's domestic payments system. Progress has included improvements in the Interbank Payments System, involving the use of computer-generated instructions with specialized software. An electronic payments system for cash settlement was installed in Moscow, where 65 per cent of total document turnover in Russia occurs. The so-called automatic payments system began with eight banks in September 1993. As of July 1994, about 60 banks and two cash settlement centers (all in the Moscow area) participated in the automatic payments system. Eventually, all banks will be part of this system. Efficiency at other cash settlement centers was improved, and growth was recorded in the number of both interbank settlement centers and networks of banks with cross-connecting correspondent accounts that act as settlements agents for associated groups of smaller banks.
Words you may need:
rest v (зд.) возлагаться (об обязательствах)
software n компьютерное программное обеспечение
document turnover документооборот
cash settlement center расчетно-кассовый центр
cross-connecting correspondent accounts перекрестные корреспондентские счета
Ex. 13. Read the dialogue, sum up its content and act it out;
Correspondent: Mr. President, your government austerity program has been painful and controversial but it has transformed the country's financies, hasn't it?
President of the Central Bank: Yes, two years ago we embarked on stabilization program. As a result, the forint was devalued and a gradual "crawling peg" exchange rate mechanism was introduced. At the same time, we imposed additional taxation. All this was not very popular, you know.
Cor.: I remember that your labour unions were outraged.
Pr.: Not only. Many government supporters joined the opposition. But judging by recent developments, exports are surging, imports are going down and industrial output is rising. Besides, we have negotiated a standby facility with the IMF and received credit ratings from international credit rating agencies.
Cor.: True, but despite the economic progress, analysts are worried that you may not succeed in reducing your current-account deficit this year as planned.
Pr.: The most recent data on the current-account deficit reflect considerable improvement. The figures are in line with the projected trend. So we have no doubt that we'll meet our target for the year as a whole.
Cor.: How was the first quarter current-account deficit financed?
Pr.: It was covered by foreign direct investment and privatization revenues.
Cor.: You got more than $13 billion. Such large capital inflows can cause problems. What have you done to neutralize their negative impact or, as financial specialists put it, to "sterilize" them?
Pr.: The revenues from privatization are mainly used to reduce our external-debt burden. So they are fully sterilized without any problem. The situation regarding FDI is more complicated, because the money does not come into the state's hands. But we reduced quite substantially the net REPO position of the banking community. Next, we became more active players on the open market, selling huge amounts of government securities, and then we increased the banks' minimum reserve requirements.
Cor.: Interest rates for short-term Treasury bills in late May were about 24 per cent, compared with 32 to 34 per cent a year ago. Aren't you worried that rates are coming down too quickly, given the need to curb inflation and support your exchange rate policy?
Pr.: We can comfortably live with that drop, because the offered yields on government securities are still higher than the expected rate of inflation.
Cor.: Now that you have joined the OECD, your securities look very attractive. Are there any other financial benefits that came with your OECD membership?
Pr.: I'm sure you know, don't you, that many investment funds aren't authorized to invest in countries that are riot OECD members. So our membership has expanded the number of investors interested in us. What's more, they are all high-quality investors.
Cor.: International investors have long had a soft spot for Hungary. Yields on government securities are high, the secondary market is liquid, you have never even breathed the word "rescheduling". You were also able to lengthen your maturities and reduce interest rate spreads last year. What are your plans on the funding front for the coming year?
Pr.: Our average maturity is now longer than seven years. We are confident that spreads will come down further. Since the beginning of the year they have already fallen quickly on the secondary market from about 200 basis points to 100 over LIBOR.
Cor.: Government finances may have improved, but funding the social security system is still a real problem, isn't it?
Pr.: It consumes about 14 or 15 per cent of the GDP, which is far too much. We can manage that for the time being. But it's obvious we need to deeply restructure the pension system, health care and other social security programs.
Cor.: You need a far-reaching reform because your government is unlikely to be able to contain the social security deficit. Given the precarious financial situation of many Hungarian companies, you will have problems collecting the social security arrears.
Pr.: You see the picture darker than it is, I'm afraid. It's true that the austerity program has had a negative impact on living standards, more than that we'll have to have further spending cuts to bring the budget deficit below 4 per cent of the GDP. But at the same time we can't deny the fact that our companies are investing more now, their profitability is improving and the stock market is doing well.
Cor.: Despite all these improvements, however, inflation at 24 per cent remains a big problem, isn't if?
Pr.: Undoubtedly, but it is coming down because of market forces and not as a result of administrative measures. Our policies are working.
Words you may need:
austerity program программа жесткой экономии
controversial adj противоречивый
embark (on) v приступать (к чему-л.)
forint n форинт (денежная единица Венгрии)
devalue v девальвировать
"crawling peg" «ползущая привязка» (система фиксации уровня валютного курса с регулярным его изменением на определенную величину)
to be outraged быть возмущенным
surge v подниматься
standby facility резервный кредит
credit rating показатель кредитоспособности заемщика или уровня кредитного и инвестиционного риска по его обязательствам
succeed (in) v преуспевать (в чём-л.)
FDI (Foreign Direct Investments) прямые иностранные инвестиции
current-account deficit дефицит по текущим операциям
net REPO position нетто РЕПО позиция
yield n доход по ценным бумагам
OECD – Organization of Economic Cooperation and Development Организация экономического сотрудничества и развития
to lengthen maturities удлинить срок погашения ценной бумаги
interest rate spread процентный спред (разница между средними процентными ставками по активам и пассивам, приносящим проценты)
basis point базисный пункт
LIBOR – London Interbank Offered Rate ставка предложения (продавца) на лондонском межбанковском рынке депозитов
precarious adj ненадежный, сомнительный
arrears n pl задолженность
Ex. 14. Give extensive answers to these discussion questions:
What role does the central bank play in any country?
What is monetary policy? Why is monetary policy necessary?
What banking system exists in Russia?
How does the CBR ensure the banking system stability?
What monetary policy does the CBR pursue?
What market-oriented instruments does the CBR use?
Is the entry of foreign banks welcome in Russia? What about other countries?
What are the shortcomings of the financial system in Russia?
What happens when a country pursues a "tight" or an "easy" monetary policy?
How can money supply be regulated?
Is the international financial community concerned about banking crises?
Why do many countries experience banking problems?
What money aggregates are used to measure and control money in circulation?
How do Central and East European countries solve their banking problems?
Do industrialized countries face banking problems?