London: World's Largest Financial Centre

London is the world's largest financial centre, with financial services based around two districts: 'The City' (the City of London) and the Docklands (particularly around Canary Wharf). The City houses the London Stock Exchange (shares and bonds), London Metal Exchange (base metal and plastic futures), Lloyds of London (insurance), and the Bank of England. The Docklands began development in the 1980s and is now home to the Financial Services Authority, as well as several important financial institutions (such as Barclays Bank, Citigroup and HSBC). There are now over 500 banks with offices in the City and Docklands, with the majority of business in London being conducted on an international basis, with established leads in areas such as Eurobonds, foreign exchange markets, energy futures and global insurance.

The UK has had an expanding export business in financial service, which has been influenced by a mixture of unique institutions, light regulation, and a highly skilled workforce.

The City of London is a geographically small city within Greater London in England. It is the historic core of London around which, along with Southwark and then Westminster, the modern conurbation grew. The City’s boundaries have remained almost constant since the Middle Ages, and hence it is now only a tiny part of the much larger London metropolis. It is often referred to as the City or the Square Mile, as it is just over one square mile in area. These terms are also often used as metonymies for the United Kingdom's financial services industry, which is based here.

The City is today a major business and financial centre, ranking on a par with New York City as the leading centre of global finance. In the 19th century the City served as the world's primary business centre. Today it has a resident population of under 10,000, whilst it employs 340,000 professional workers, mainly in the financial sector.

Text 8

1. Read the text and explain why the government of Great Britain abstains from joining the eurozone.

Great Britain and European Integration

The UK has had good relations with the rest of Europe since World War II. It became a member of the European Economic Community in 1973. The EEC eventually became the European Union through the Maastricht Treaty of the European Union in 1993. Although the UK does not use the euro and is not a member of the Eurozone, it still plays a leading role in the day to day workings of the EU.

As a member of the European Union, the United Kingdom could adopt the euro as its currency. However, the subject remains politically controversial. Gordon Brown, when Chancellor of the Exchequer, ruled out membership for the foreseeable future, saying that the decision not to join had been right for Britain and for Europe.

The government of former Prime Minister Tony Blair had pledged to hold a public referendum to decide on membership should "five economic tests" be met, to ensure that adoption of the euro would be in the national interest. In addition to these internal criteria, the UK would have to meet the EU's economic convergence criteria (Maastricht criteria), before being allowed to adopt the euro. Currently, the UK's annual government deficit, as a percentage of the GDP, is above the defined threshold. In February 2005, 55% of British citizens were against adopting the currency, with 30% in favour. The idea of replacing the pound with the euro has been controversial with the British public, partly because of its identity as a symbol of British sovereignty and because it would, according to critics, lead to suboptimal interest rates, harming the British economy. In December 2008 the results of a BBC poll of 1000 people suggested that 71% would vote "no", 23% would vote "yes" to joining the European single currency, while 6% said they were unsure. The pound did not join the Second European Exchange Rate Mechanism (ERM II) after the euro was created.

2. Answer the questions to the text:

1) When did the UK become a member state of the EU?

2) What is the national currency of the country?

3) Why does the government of Great Britain abstain from joining the eurozone?

4) What measures are taken by the government to ensure that adoption of the euro will be beneficial for the country?

5) What is the British public response to the idea of adopting the new currency?

3. Agree or disagree with the statements.

1) London is the world’s largest financial center with financial services based around three districts.

2) The UK has had an expanding export business in financial service.

3) The City of London is a geographically big city within Greater London.

4) The City is today a major business and financial center.

5) The UK became a member of the European Economic Community in 1983.

6) The UK uses the euro and is a member of the Eurozone.

7) The pound joined the Second European Exchange Rate Mechanism.

DEVELOPING VOCABULARY

1. Match up the words on the left with their definitions on the right:

1) expense 2) constituency 3) responsible 4) legislate 5) futures 6) competitive 7) stock exchange 8) revenue 9) authority 10) share 11) treaty

a) a place where securities are regularly traded b) a part or portion of something owned c) a person or group of people having the power or right to control, judge, or prohibit the actions of others d) to make or pass laws e) a formal agreement or contract between two or more parties f) the whole body of voters who elect one representative to a legislature or all the residents represented by one deputy g) being accountable for one's actions and decisions (to) h) income from a business enterprise, investment, property, etc i) a particular payment of money j) sufficiently low in price or high in quality to be successful against commercial rivals k) commodities or other financial products bought or sold at an agreed price for delivery at a specified future date

2. Complete the table with the derivatives of the given words.

Agent	Noun	Verb	Adjective
contractor
			consumptive
			cooperative
			deposited
	distribution
	estimation
extractor
governor
		manufacture
	performance
			productive
		supply

3. Insert the following words to complete the sentences:

taxation, labour force, estimate, launch, consumption, output, headquarters, commodity, contractor, bond.

1. Ethiopia has almost the lowest oil ________ per capita in the world.

2. The builders __________ the cost of repairing the roof at $600.

3. Foreign workers now compose 6% of the company's__________.

4. The _________of the company is located in Switzerland.

5. A person or firm that supplies materials or labour, esp. for building is known as a __________.

6. The industrial __________ is up 30% on last year.

7. Labour is bought and sold like any other __________.

8. Eurobond is a __________ issued in a eurocurrency.

9. In recent years, the UK economy has been managed in accordance with the principles of market liberalization, low _________ and regulation.

10. Great Britain is expected to _________ the building of new nuclear reactors to replace existing generators and to boost UK's energy reserves.

4. Match up the words from the left column with the words from the right one to make common collocations.

interest	sector
domestic	workforce
tertiary	euro
stock	authority
skilled	goods
join	energy
adopt	currency
single	euro zone
legislative	rate
renewable	exchange

5. Insert the appropriate prepositions where necessary.

1) It’ll allow the UK to be self-sufficient ____ coal for just over 6.5 years, although ____ present extraction rates it would take 20 years to mine.

2) The UK economy is the world's sixth largest ___ nominal GDP and the seventh largest ___ purchasing power parity.

3) Manufacturing remains a significant part of the economy, but accounts ____ only one-sixth of national output.

4) The service sector has grown substantially, and now makes ____ about 73% of GDP.

5) Agriculture is intensive, highly mechanised, and efficient ____ European standards, producing about 60% ____ food needs ____ less than 2% ___ the labour force.

6) However, following the severe shock of the 1973 oil crisis and the 1973–1974 stock market crash, the British economy went _____ recession in 1974.

7) According ____ the IMF, GDP rose ___ 5% ___ its peak in 1988.

8) In 2008 the United Kingdom entered ____ a recession brought ____ ____ the global financial crisis.

9) The City of London is often referred ____ as the City or the Square Mile, as it is just over one square mile ___ area.

10) The City is a major business and financial centre, ranking ____ a par ___ New York City as the leading centre of global finance.

DISCOVERING LANGUAGE

1. Choose the correct form of the predicates in brackets.

1) Blake worked without a contract which (prevented/had prevented) him from receiving a golden parachute pay.

2) Kay figured that Rolls-Royce’s prices (left/had left) plenty of room for low-price competitors.

3) Mr. Smith said that much of the apparent growth in profits that (occurred/had occurred) in the 80s (was/had been) the result of creative accounting.

4) Cray Research Inc reported surprisingly weak results for the second quarter which (indicated/had indicated) lower earnings for the year.

5) Dunhill was sitting on a share capital of £179 mln last year, then it (shrank/had shrunk) to £120 mln due to standings in Europe.

6) Pittard’s share price tumbled when the price of sheepskins (collapsed/had collapsed).

7) Howard Klein said that the fall in the Airtours share price(raised/had raised) serious concerns.

2. Complete the sentences using the verbs in brackets in the proper tense form (the Past Simple or the Past Perfect).

1) I couldn’t get into the office because I (to lose) my key.

2) We couldn’t use that logotype, because one of our competitors already (to choose) it.

3) I found about the vacancy too late. When my application form arrived, they (to appoint) another person.

4) By the time he sold off the shares, his original investment (to fall) by 13 per cent.

5) When I returned to the firm, I was surprised to hear that the boss (to put) my colleague in charge of the project.

6) The bank returned the cheque because I (not to sign) it.

7) The office was empty because everybody (to go) home.

3. Complete the sentences using the verbs in brackets in the proper tense form.

1) Managers in British companies needed to understand that they (to deal) with human beings and not machines.

2) They said that the UK business people (to lose) their way and the things (to go) downhill fast.

3) Many people claimed that Japanese companies (to make) products cheaper and better quality than UK ones.

4) Frank Farrant, a finance director, said the first task (to be) to increase Adidas’ profitability into about 10 per cent in two or three year’s time.

5) I wondered how much the model (to cost).

6) His colleagues knew the real reason for Sloan’s success: he (to be) a man who always (to put) business first.

7) LBS Ltd. researchers believed deregulation and technological advance (to add) to the concentration of the three main financial centers: London, New York and Tokyo.

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