4. Ответьте на вопросы.

1. What is a bank in the broadest sense of the word?

2. Who owns banks?

3. Where can we find noncorporate banks?

4. Do all countries subject their banks to government regulation and supervision?

5. How is government supervision implemented?

Text 2

THE BASIS FOR BANKING OPERATIONS

Seventeenth-century English goldsmiths provided the model for contemporary banking. Gold stored with these artisans for safekeeping was expected to be returned to the owners on demand. The goldsmiths soon discovered that the amount of gold actually removed by owners was only a fraction of the total stored. Thus, they could temporarily lend out some of this gold to others, obtaining a promissory note for principal and interest. In time, paper certificates redeemable in gold coin were circulated instead of gold. Consequently, the total value of these banknotes in circulation exceeded the value of the gold that was exchangeable for the notes.

Two characteristics of this fractional reserve banking remain the basis for present-day operations. First, the banking system's monetary liabilities exceed its reserves. This feature was responsible in part for Western industrialization, and it still remains important for economic expansion. The excessive creation of money, however, may lead to inflation. Second, liabilities of the banks (deposits and borrowed money) are more liquid — that is, more readily convertible to cash-than are the assets (loans and investments) included on the banks' balance sheets. This characteristic enables consumers, businesses, and governments to finance activities that otherwise would be deferred or cancelled; however, it underlies banking's recurrent liquidity crises. When too many depositors request payment, the banking system is unable to respond because it lacks sufficient liquidity. The lack of liquidity means that banks must either abandon their promises to pay depositors or pay depositors until the bank runs out of money and fails. The advent of deposit insurance in the United States in 1935 did much to alleviate the fear of deposit losses due to bank failure and has been primarily responsible for the virtual absence of runs on U.S banks.

Notes

artisan — ремесленник

promissory note — простой вексель

principal - номинальная или основная сумма кредита, займа;

184

interest - процентные платежи

redeemable — выкупаемый, погашаемый

fractional reserve banking — банковская система, основанная на

том, что часть депозитов банка долж­на поддерживаться в качестве уста­новленных законом резервных требований.

monetary liabilities - денежные обязательства

liquid assets - ликвидные активы: наличные деньги и активы, которые могут быть превращены в наличные

defer - уоткладывать

underlie - лежать в основе

recurrent - повторяющийся

advent — появление

alleviate - смягчать

run on a bank - "набег на банк" - массовое изъятие вкладчиками депозитов из банка в связи с сомнениями в его финансовом положении

Упражнения

*5. Найдите в тексте английские эквиваленты данных словосочетаний.

1. предоставлять займы; 2. переводить деньги; 3. по требованию; 4. со временем; 5. оставаться основой; 6. отказаться от обяза­тельств.

*6. Соотнесите слова в левой колонке с их определениями в правой.

1. promissory note a. debts, sums of money that must be paid

2. liquidity b. coming or arrival

3. liability с the state of being able to raise funds easily

4. advent d. money lent on which interest is payable

5. principal e. a signed promise to pay a stated sum of money

to a specified person on a specified date or on demand

*7. Выразите согласие или несогласие со следующими утверждениями.

1. The total value of paper certificates redeemable in gold coin never exceeded the value of the gold exchangeable for the notes.

2. The banking system's monetary,liabilities exceed its reserves.

3. The excessive creation of money does not lead to inflation.

4. Liabilities of the banks are less liquid than assets.

5. When too many depositors request payment, the banking system is unable to respond.

6. The advent of deposit insurance in 1935 did nothing to prevent runs on US banks.