2. A) Fill each gap with a suitable word from the box.

b) Sum up the text in 5-7 sentences. Present your sentences to the class.

c) Describe the basic functions of the Eurocurrency markets.

f unction operating conducted

try client need

borrow perform offer

deal organized leading

bank restrictions borrowers

The Eurocurrency Market

One of the most well-developed sectors of the Global Financial Market is the Eurocurrency Market. The Market refers to funds channelled via financial intermediaries from international lenders to international _________ . The large multinational banks dominate this business and have played a _________ role in the development and growth of these "offshore" markets.

The Eurocurrency markets __________ the short to medium term debt required by banks, corporate customers, and government borrowers. The sources of these funds are domestic _________ deposits whose ownership is transferred to banks outside the controlled domestic monetary systems.

The Eurocurrency market is therefore ________ and sustained by the large international banks and operates at two levels. Firstly, there is the very competitive wholesale market _________ in London, in which these banks sell their funds to each other at the London interbank offering rate (LIBOR). This business is mainly ________ via telephone, and thus only the highest quality banks can __________ in the wholesale market. Secondly, smaller banks, corporate borrowers, national governments (in the late 1970s from Eastern Europe or developing countries and now primarily the Western industrilized countries) can loans from this market. In

this large-scale "retail" loan market the large international banks only lend the offshore deposits alter detailed credit, investigation of the _________.

The Eurocurrency markets _________ three basic functions. Firstly, they are extensively used for foreign exchange hedging purposes as the banks _________ to balance out their foreign assets and liabilities. The banks therefore take positions in the Eurocurrency market to cover the forward commitments they have made with their customers. Secondly, Eurocurrency markets can at times bypass domestic channels of financial intermediation, especially when governments impose tight credit . For example, US corporations can acquire Eurodollars in London. These deposits may be US domestic dollar deposits that have been transferred abroad, during a US domestic predit squeeze. The third ___________ is the full international intermediation role of channelling surplus liquid resources from, say, OPEC countries to those countries or corporations who to borrow.

Words you may need:

via – за допомогою, через

to take position – встановлювати позицію

at times – час від часу

bypass – обходити

credit squeeze – „стиснення кредиту” (заходи держави по обмеженню кредиту споживачам)