Money and banks

Money is a very important factor in the economy and economics. Goods are produced to be sold. They are sold to meet the needs of consumers or customers. Services are rendered to make life easier. People earn money to be able to pay for both goods and services. Banks cannot operate without money. That is why people say that: "Money makes the world go round".

Money makes the world go round and so profit is the driving force underlying most business activities. Producers, wholesalers, forwarders, retailers and advertisers do not usually work for some idealistic reason. They work to earn a profit. When we talk about money we do riot only mean cash (notes and coins), we also mean cheques, credit cards and debit cards, cash cards, certificates of deposit, treasury bond and shares.

There are things like health, true love or friendship that have no price. They can neither be bought nor sold. Money has nothing to do with them and neither has business. We are interested in business and that cannot exist without money.

Banks are institutions dealing with money. In developed countries banking systems usually consist of a central bank, clearing banks and commercial banks.

The central bank is responsible for the monetary policy of the country. It also acts as the banker for the government and keeps the country's reserves in gold and other currencies. It issues notes and coins, controls inflation and supervises all banking institutions in the country.

Clearing banks clear cheques and settle the difference in the banks' accounts with the central bank.

Commercial banks constitute the largest group of banks. They are usually limited companies which have the license to accept deposits and to store and transfer money on behalf of their customers. Commercial banks are businesses rendering services to the general public and to companies at a profit. The main functions of these banks include accepting deposits, granting credits and transferring money. As for deposits, they are kept on personal accounts and on business accounts. Commercial banks also provide a variety of other financial and advisory services.

For these services banks charge fees and commissions. But the main part of the profit generated by commercial banks comes from credits extended to individual customers and to companies. A person or institution obtaining a loan must pay a price for it interest. When calculating interest rates banks must consider not only their profits but also inflation and competition from other banks. On the other hand, when granting loans banks must also assess the creditworthiness of the borrower.

Ukraine

Ukraine, a state in South-Eastern Europe, proclaimed its independence on August 24, 1991 and confirmed this status the same year on the 1st of December.

The territory of Ukraine is 603,700 square kilometers. The total length of boundaries is 6,500 kilometers.

Ukraine consists of 24 oblasts and the Autonomous Republic of Crimea. The capital of Ukraine is Kyiv. The largest cities of Ukraine are Kyiv, Dnipropetrovs'k, Donetsk, Odessa, Lviv, Luhansk, Zaporizhzhia, Kryvyi Rih, Simferopol.

The population of Ukraine is more than 46 million people. Ukraine is inhabited by people belonging to more than 110 ethnic groups. The most numerous of these are Ukrainians (about 36 mln) and Russians. More than 14 mln of ethnic Ukrainians live in other countries.

Ukraine borders on Poland, Slovakia and Hungary in the west, and on Romania and Moldova in the south-west. Its northern neighbour is Byelorussia and the eastern one is Russia.

The main river of Ukraine is Dnipro, the third longest river in Europe, which divides Ukraine into right-bank and left-bank territories.

Ukraine is rich in many mineral resources.

Ukraine is one of the founding members of UNO and is recognized by all the states of the world.