Metodichka_-_Anglysky_yazyk

10.Crowdfunders _____________ (access) the project site remotely every Monday from May to September to become an active investor in decision making.

11.How long _____________ (he attract) new distributors before an effective supply-chain was formed? How many distributors_________ (he attract)?

12.We ____________ (not talk) to him since he __________

(specify) his requirements.

Used to/Be used to/Get used to/ Would

Ex.15 Choose the correct alternative.

1.In the beginning they used to rely/relying on friends and family or own savings but now twenty years later they are used to/used to raise/raising finance through sponsored events.

2.It took him some time to be used to/to get used to corporate requirements in his new job.

3.He would/used to/ was used to/got used to access investors again and again to show the benefits of his innovative idea.

4.He would/used to believe/believing that entrepreneurs making use of crowdfunding would never disclose their ideas to the crowd.

5.He would/used to have/having no collateral to take out a bank loan.

Ex.16 Choose the correct answer (a, b, c, d).

1.As they ____________ to venture capitalists they got to know

alot about fundraising.

a.talked

b.were talking

c.had talked

d.had been talking

2.Investors were not comfortable until the entrepreneur

___________ the innovative character of his idea.

a.didn’t explain

b.was explaining

c.had explained

d.had been explaining

3.He explained that he ___________ the company for 10 years and they _________ so many trivial complaints.

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a.had run ….had never been having

b.ran ……….were not having

c.had been running …..had never had

d.was running ….had never been having

4.Two years ……. (= It’s two years) since I …….the effectiveness of the approach.

a.have passed …….have realized

b.passed …….realized

c.have passed …….realized

d.passed ……….have realized

5.I ……to foreign countries, so different languages don’t worry me at all.

a.am used to travelling

b.used to travel

c.would to travel

d.used to travelling

6.It ……… a poor country before they discovered oil.

a.used to be

b.would be

c.was used to being

d.had been used to being

Exam practice

Text 2

Ex. 17 Read the text.

For questions 1-5, choose the correct answer (A, B, C or D).

Credit Rating Agencies

Ratings seem increasingly central to the regulatory system of modern capitalism and therefore to governments everywhere. Getting credit ratings “right” therefore seems vitally important to many

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observers. But in pursuing improvement in the rating system one needs to appreciate the challenges and limits to rating.

Rating agencies emerged after the Civil War in the United States. Two major American agencies dominate the market in ratings. Both Moody's and Standard & Poor's are headquartered in the lower Manhattan financial district of New York City. Both agencies have numerous branches in the US, in other developed countries, and in several emerging markets. Both firms have fee incomes of several hundred million dollars a year, making it difficult for even the largest bond or share issuer to manipulate them through their revenues. Moreover, inflated ratings would diminish the reputation of the major agencies, and reputation is the very basis of their franchise.

Globalization has led to unprecedented financial volatility. The role of knowledge in investment decision making is at the heart of any business activity. Market actors are overwhelmed with data about prices, business activity, and political risk. A typical form of knowledge output is some sort of recommendation, ranking, or rating. This knowledge output becomes a benchmark around which market players subsequently organize their affairs. Market actors can and do depart from benchmarks, but these still set the standard for the work of other actors, providing a measure of market success or failure. In this way, knowledge network outputs play a crucial role in constructing markets in a context of less than perfect information and considerable uncertainty about the future. Rating agencies and what they do have become of much greater interest to the regulatory state and to those of us concerned with the dynamics of global finance. On the one hand, the demand for the work of the agencies has grown with the expansion of capital markets and international financing. This has made the agencies more important than ever before, granting them significant power in some circumstances over those seeking bond financing. On the other, risks have grown for the agencies too. Financial innovation means the rule book is being reinvented continuously. Although change in global finance has

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increased the importance of the bond rating agencies, they are more vulnerable now to a sudden collapse in their franchise.

Three main types of challenge to the power and authority of rating agencies can be identified. The first challenge— problems in rating organization—is the public discussion of problems that market actors (including government officials and financial reporters) see in how the agencies are organized, and in how they do their business. The two key elements are perceived: conflicts of interest in how ratings are paid for, and the question of uninvited ratings. The second sort of challenge—performance issues—is a more serious challenge than the organizational problems. The major issues here concern the lagging nature of rating, specific concerns about “split” ratings, and the lack of quantitative analysis models in the rating process. The last sort of challenge to the power and authority of rating—rating crises—emerges from a series of high profile failures to predict sudden bankruptcies or collapses of credit quality.

Bond traders and pension fund managers have seemingly contradictory views on rating agencies. They are at times critical of the work of the rating agencies. But most financial market actors take the rating agencies seriously. Market participants usually treat the rating agencies and their views as matters of considerable interest. Rating agencies, especially Moody's and S&P, have worked hard at creating their reputation for impartiality over the last century or so. In addition to respect for the reputation of the agencies, there is also an awareness of the market influence of the rating agencies. Even if a trader or bond issuer does not respect a particular judgment of the rating agencies, they might anticipate the effect the judgment will have on others, and may act on that expectation. Rating agencies serve as “reputational intermediaries” like accountants, analysts, and lawyers, who are essential to the functioning of the system. [22]

1.What is the main explanation why rating agencies tend to be impartial in their judgment?

A.High revenues because of their multimillion fee incomes make them independent.

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B.Agencies have numerous branches in developed countries and in emerging markets.

C.Agencies aim to build and to guard excellent reputation of their own.

D.Agencies emerged after the Civil War, have a long history and a lot of experience.

2.Knowledge outputs play a crucial role in constructing markets because

A.market players have to perform in volatile uncertain financial markets with a lack of perfect information.

B.market players do not have enough data about prices, business activity, and political risk.

C.there is no other measure of market success or failure.

D.big and small companies are more vulnerable now to a sudden collapse.

3.Which type of challenge to the authority of rating agencies was not mentioned in the text?

A.Ratings could be ordered and paid for by the companies examined.

B.There is a lack of qualitative analysis models in the rating process.

C.Ratings often fall behind and become out-of- date.

D.Rating agencies failed to foretell some high-profile situations of insolvency.

4.According to the text “reputational intermediaries” are

A.accountants, analysts, and lawyers, who are essential to the functioning of the system.

B.rating agencies which have worked hard at creating their reputation.

C.rating agencies because their judgment serves as a benchmark in investment decision making.

D.established rating agencies Moody's and S&P.

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5.The main aim of the text is

A.to advertise the activity of rating agencies.

B.to show the role of rating agencies in the era of globalization.

C.to describe the public attitude to rating agencies.

D.to provide a general overview of rating agencies.

Lesson 3

Text 1

Pre-reading

Ex. 1 Read the title of the text. Make a list of at least 4 questions that you think the text will answer. Work in pairs to compare your questions.

Reading

Ex.2 a) Read the text to find the answers to your questions. b) Read the text and choose the best word (A-D) to fill

each gap.

STRATEGY POINT

1.Read the whole text quickly to get a general idea of what it is about.

2.As you read, try to predict the words that might fill the gaps.

3.Look at the four possible answers for each gap and cross out any obviously incorrect words.

4.Read both before and after each gap to decide which word should go in it. The word needs to fit both the meaning and the grammar.

5.After completing all the gaps, read the whole text again to check your answers.

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Central banking

Central banks perform several tasks. They provide settlement services to large-value payments, oversee banks for the sake of financial stability, act as lenders of last resort, and implement monetary policy. These tasks and their mode of operations have been repeatedly redefined in order to resolve specific monetary and financial crises.

Lending in last resort is an extraordinary operation that (1)

____ market rules. It is a unilateral and discretionary decision to provide potentially unlimited amounts of the ultimate (2)____ of payment to the money markets. It escapes market contracts and is therefore an act of sovereignty that keeps afloat debtors who otherwise would have failed to settle their debts. This operation allows other perfectly sound liabilities to perpetuate, whereas they would have been destroyed by the spillover of the failed debts. Therefore the economic impact of LOLR interventions is (3) _____. On the one hand, it forestalls systemic risk, because the social cost of letting insolvency spread is higher than the private cost of the original failure. On the other hand, it can induce moral hazard if it strengthens reckless behavior against which it provides collective insurance.

The implementation of monetary policy since World War II is fundamentally different in the sense that money has effectively lost its physical reference. E-money poses several new forms of risk because it uses open networks to communicate instructions and transfer value in contrast to the closed nature of the interbank market. The growing (4)_____ of money takes the form of new means of payments and savings instruments that become nearly as liquid as the more traditional deposits that are used for payments. This (5) ______

of operational definitions of money reflects the increasing difficulty of identifying the relevant set of financial instruments that best reflect the liquidity available in the economy.

Central banks use mainly three instruments to influence the

(6) ____ of money creation in the economy. Reserve requirements 48

are a first type of instrument. By law, central banks stipulate that all banks keep a fraction of their balance sheets (typically a specified money aggregate) in reserve at their account at the central bank. The reserve requirement ratio can be used to affect the cost of issuing deposits. Given that the central banks often choose to pay no or low interest on the reserve, the cost of issuing any liability subject to reserve is directly affected by the level of reserve and their opportunity cost.

The second type of monetary policy instruments is standing facilities (also called ‘discount windows’) for banks to obtain liquidity in a bilateral (7) _____ with the central bank. The interest rate of these transactions is typically called the discount rate. This rate can be superior to the money market interest rate so that these standing facilities are essentially (8) _____ in case of unforeseen liquidity shortages. However, the discount window has been and still can be the foremost channel of central bank liquidity to the banking sector in countries where decentralized money markets are not mature.

The last major instrument of monetary policy is open-market operations as a primary way of influencing inflation and economic growth. Government securities are sold at certain interest rates as a way of controlling the money supply. These operations take (9)

_____ forms. The European Central Bank organizes regular auctions where it provides reserve at a target interest rate. The Federal Reserve directly purchases and sells public sector securities against central bank money so as to achieve a certain overnight interest rate. These three instruments are used to a various degree to (10) ______

money supply. [1]

Ex. 3 Answer the questions.

1.What are the main functions of a central bank?

2.What does ‘to act as a lender of last resort’ mean?

3.What is the economic impact of LOLR interventions in the economy? Is it positive or negative?

4.What difficulty does the implementation of monetary policy face? Why?

5.How many instruments do central banks have at their disposal to manage the money supply? What are they?

6.What do banks have to do to comply with reserve requirements? How does the reserve requirement affect the cost of issuing deposits?

7.What is the discount window? What is the function of the discount rate?

8.What forms of open-market operations are mentioned in the paragraph?

Ex.4 Complete the notes below to show the main points of the text. Use the notes to make a summary of the text.

Central banking

Tasks performed by a central bank:

1._______________________

2._______________________

3.to act as a lender of last resort

it means____________________________

its positive impact:____________________

its negative impact: ___________________

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