Word Study

Ex.1 Make nouns from the following verbs.

To borrow

To deposit

To hold

To secure

To lend

To supervise

To govern

To nationalize

To maintain

To promote

Ex.2 Make verbs from the following nouns.

Credit

Investment

Payment

Shift

Supervision

Government

Organization

Dependence

Maintenance

Circulation

Deposit

Derivation

Facilitation

Imposition

Stimulation

Fund

Ex.3 Choose the words with similar meaning from the two groups and arrange them in pairs.

1. Account, supervision, current, holder, profit, security, to circulate, to invest, to seek, to shift, liabilities, to trade in, to derive from, significant, to facilitate, funds, to set, payment.

2. To transfer, fees, to obtain from, to look for, to fix, to put, to spread, bill, important, owner, benefit, safety, control, debts, modern, to help, capital, to deal in.

Ex. 4 What are the opposites?

Lender, profitless, danger, cheap, high-interest, to open an account, unimportant, irresponsible, internal, income, deficit.

Ex.5 Form all possible word combinations using the words of both columns and translate them into Russian. Use prepositions and articles if necessary.

current intermediary

financial income

chequing funds

savings deposit

interest exchange

facilitate loan(s)

derive expenditures

make reserve

withdraw policy

maintain money

overdraw rate

cash profit

external account

Ex. 6 Match the words with their definitions.

1. Expenditure, reserve, income, account, intermediary, deposit, interest, loan, fund, surplus

1) a sum of money that you borrow

2) a person who comes between groups of people in order to bring them into agreement

3) a quantity of something kept for future use, store

4) a sum of money kept in a bank which may be added to and taken from

5) a sum of money which you put in a bank account or other savings account

6) a supply or sum of money set apart for a special purpose

7) a charge made for the borrowing money

8) the total amount of money you spend

9) an amount additional to what is needed or used

10) the money a person earns or receives regularly

2. to deposit, to overdraw, to circulate, to maintain, to facilitate, to withdraw, to impose, to deal in, to shift

1. to establish (e. g. an additional payment) officially

2. to place in a bank or safe

3. to take money away or to take money back

4. to take more money from one’s bank account than it contains

5. to make easy or easier

6. to move from one place to another

7. to support with money

8. to buy and sell, to trade in

9. to move in a closed system, always remaining within that system

Ex. 7 Find the closest synonym for the word combinations on the left selecting it from the right column.

To create money

To set a rate

To make loan

To meet a loan

To get a loan

To credit money to an account

To open an account

to hold a deposit

to withdraw from an account

to issue a deposit

to receive a loan

to have a deposit with a bank

to deposit money in an account

to fix a rate

to repay a loan

to grant a loan

to draw money from an account

to issue money

Ex. 8 Fill the gaps using the following words and their derivatives and translate the sentences into Russian.

Surplus, impose, income, intermediary, interest, expenditure, borrower, maintain, fund(s), withdraw, account, overdraw, circulate, fees, rate, depositor(s), liabilities

1. Money__________ in the economy.

2. The government has reduced the number of 5$ notes in _________.

3. My account is 300$ ------------.

4. They lent me the money at 6% ---------------.

5. She sold her __________ in the company.

6. Some banks make it difficult to open an___________.

7. She ________50$ from her bank account.

8. Banks charge _________for their services.

9. My friend is in ___________ now.

10. This organization is ____________ by the government.

11. I’m short of _______ at the moment.

12. He is too poor to __________ his family.

13. The bank reduced their _________ to attract customers.

14. The government _________ tax on hard drinks.

15. The bank went broke and its ___________ lost their money.

16. The borrower wasn’t able to meet his__________.

17. A bank is an_______between a ________ and a __________.

18. We restricted our_______ on food.

19. Half of our _______ goes on rent.

20. Mexico has a large______ of oil.

Ex.9 Fill the gaps with the following prepositions: among, from, to, for, on, in, with.

1. A bank borrows money ____ the public, crediting them ____ a deposit.

2. Banks lend money ____ firms, households, governments.

3. Most banks do not pay interest _____ sight deposits.

4. A Central Bank is responsible _____ the government’s monetary policy.

5. A Central bank is involved ____ the issue of money.

6. The activity of commercial banks is subject ____ government control.

7. Most banks derive a profit _____ the difference in the interest rate.

8. Banks offer financial services that facilitate the exchange of funds _____ individuals and institutions.

Ex.10 Translate the following words, phrases and statements from Russian into English.

Торговать ценными бумагами, сберегательный вклад на неопределенный срок под процент, способствовать обмену денежных средств, начислять комиссионные, валютная политика, последний кредитор в критической ситуации, денежная система, вклад в банк, ссуда, извлекать прибыль, процентная ставка.

1)Банк торгует деньгами и их заменителями. 2) Банк обеспечивает различные финансовые услуги. 3) Банк принимает депозиты. 4) Банки предоставляют займы. 5) Банки получают прибыль из разницы в процентных ставках. 6) Банки могут быть независимы от правительственного контроля.

Text

No population centre, even the smallest one, is conceivable without a bank building. A small town may have several banks, and in a big city there are tens of them.

Like any business, a bank is after a profit, above all. Money is the commodity it sells. To put it simply, a bank seeks to buy money cheaply and to sell it dearly.

Naturally, the banks put their money where it brings them the highest profit. That is why they always keep up to date with the market situation. By shifting money at various costs from sphere to sphere, from one geographical region to another, the banks activities stimulate progress in industry, construction and agriculture. Besides this the banks promote growth or cause the demise of individual population centres or even whole regions.

A bank is an institution that deals in money and its substitutes and provides financial services. Banks accept deposits and make loans and derive a profit from the difference in the interest rates. They also have the power to create money.

Banks are financial intermediaries that interact with two types of individuals or institutions in the economy: (1) deficit-spending individuals or institutions whose current expenditures for consumption exceed their current income and who, therefore, need to raise funds externally by negotiating loans; and (2) surplus-spending individuals and institutions, whose current income exceed their current expenditures on goods and services so they have surplus funds to save and invest. Banks perform the indispensable task of intermediating between these two groups, offering convenient financial services to surplus-spending individuals and institutions in order to raise funds and then loaning those funds to deficit-spending individuals and institutions.

The two major classes of banks are commercial and central banks.

A commercial bank borrows money from the public, crediting them with a deposit. The deposit is a liability of the bank. It is the money owed to depositors. In turn the bank lends money to firms, households, or governments wishing to borrow. In addition to the profit derived from the difference in the interest rates, commercial banks charge fees for various services.

Commercial banks are financial intermediaries with a government license to make loans and issue deposits, and offer financial services that facilitate the exchange of funds among individuals and institutions.

The most important kinds of deposits are time deposits and sight deposits. Sight deposits can be withdrawn on sight whenever the depositor wishes. These are the accounts against which we write cheques, thus withdrawing money without giving the bank any warning. Therefore, most banks do not pay any interest on sight deposits, or chequing accounts.

Before time deposits can be withdrawn, a minimum period of notification must be given within which banks can sell off some of their high-interest securities or call in some of their high-interest loans in order to have the money to pay out depositors. Therefore, banks usually pay interest on time deposits.

Today every country has a Central Bank. It acts as a lender to commercial banks and supervises their activities. It is the lender of last resort to commercial banks in the case of financial crisis. It acts as a banker to the government.

The Central Bank controls the quantity of currency in private circulation and the one held by the banks through purchases and sales of government securities. It can impose the minimum ratio of cash reserves to deposits that banks must hold. The Central Bank also sets discount rate which is the interest rate commercial banks have to pay when they want to borrow money. So it controls the money market. It is responsible for the government’s monetary policy. Central banks also play a significant psychological role as guarantors of the monetary system.

Central banks are involved in the issue of money and maintain the country’s foreign currency reserves.

Central banks may be nationalized organizations and are subject to government control, but some of them can have independence from governmental supervision.

Notes:

On sight – по предъявлении( без предварительного уведомления)

Demise – сдача недвижимости в аренду

Conceivable – мыслимый, возможный