Text-based Exercises

Ex. 1 The text contains a number of common verb-noun partnerships (e.g. to loan funds). Match up the verbs and nouns below to make such collocations which have been used in the text. Translate them into Russian.

To provide

To raise

To derive

To issue

To exceed

To facilitate

To withdraw

To pay

To sell

To set

To maintain

To negotiate

a profit

reserves of foreign currency

securities

discount rate

money

interest

the exchange of funds

deposits

loans

funds

financial services

expenditures

Ex. 2 Which of the following adjectives from the text are used with the nouns given below? Consult the text if necessary.

Commercial, financial, indispensable, sight, interest, high-interest, current, various, major, monetary, significant, governmental, foreign, private.

Supervision, system, expenditures, deposit, costs, loans, circulation, intermediary, banks, rate, role, classes, currency, task.

Ex. 3 Say whether the following statements are true or false. Correct the false ones.

1. A bank seeks to buy money dearly and to sell it cheaply.

2. By shifting money at the same cost from sphere to sphere, the banks activity stimulates progress in industry, construction, agriculture.

3. A bank is an institution that deals in various commodities and their substitutes.

4. Banks accept deposits, make loans and derive a profit from the difference in the interest rates.

5. Banks seek deficit-spending individuals and surplus-spending individuals.

6. The two major classes of banks are private and public banks.

7. A Central Bank charges fees for its services.

8. Commercial banks offer financial services that facilitate the exchange of funds among individuals and institutions.

9. Time deposits can be withdrawn on sight whenever the depositor wishes.

10. Most banks pay no interest on sight deposits, or chequing accounts.

11. Before sight deposits can be withdrawn, a minimum period of notification must be given to a bank.

12. Banks usually do not pay interest on time deposits.

13. Central banks act as lenders of last resort to counterfeiters.

14. A commercial bank acts as a banker to the government.

15. One of the responsibilities of a Central Bank is to control the quantity of currency in private circulation and the one held by commercial banks.

16. A Central Bank sets discount rates which commercial banks have to pay when they want to lend money.

17. Central banks play a significant role as guarantors of high economic development of a country.

18. Both commercial and central banks are involved in the issue of money.

19. Central banks are nationalized organizations and are subject to government control.

Ex. 4 Join the beginnings and the ends to make meaningful statements reflecting the information from the text.

1. No population centre is_______

2. Money is_______

3. Banks put their money_______

4. A bank deals in ______

5. A commercial bank borrows_______

6. The most important kinds of deposits are_______

7. Most banks do not pay________

8. Banks usually pay_______

9. A Central Bank controls _______

10. A Central Bank imposes _______

11. Central Banks maintain______

1. _____the country’s foreign currency reserves.

2. _____the minimum ratio of cash reserves to deposits that banks must hold.

3. _____conceivable without a bank building.

4. _____ the commodity a bank sells.

5. _____the quantity of currency in private circulation.

6. _____interest on time deposits.

7. _____any interest on sight deposits.

8. _____time deposits and sight deposits.

9. _____money from the public, crediting them with a deposit.

10. _____money and its substitutes.

11. _____where it brings them the highest profit.

Ex. 5 Re-read the first three paragraphs of the text and say why no population centre is conceivable without a bank building.

Ex. 6 Use the information from the text to complete the sentences. Use your own words as much as possible.

1. A bank is an institution______.

2. Banks are financial intermediaries________.

3. A commercial bank borrows money from________.

4. The deposit is______.

5. Commercial banks are financial intermediaries ________.

6. The most important kinds of deposits are________.

7. Sight deposits can be withdrawn________.

8. Time deposits can be withdrawn_______.

9. A Central Bank acts as _____, ______, ______.

10. A Central Bank controls_________.

Ex. 7 Divide the text into logical parts. Make up a plan of the text.

Ex. 8 Check yourself. If you are ready to answer all these questions, you know the basic notions and ideas of the topic.

1. Why is a bank compared to any other business?

2. How does a bank buy and sell its commodity?

3. What is the role of banks in the economy?

4. What does the term “bank” mean?

5. What do banks derive their profit from?

6. Why are banks considered to be financial intermediaries?

7. What groups of individuals and institutions do banks intermediate between?

8. What classes of banks do you know?

9. What financial services do commercial banks offer?

10. What deposits do commercial banks issue to their clients?

11. How can sight deposits be withdrawn?

12. How can time deposits be withdrawn?

13. Do banks pay interest on sight and time deposits?

14. Who supervises the activity of commercial banks?

15. What are the functions of a Central Bank?

16. How does a Central Bank control the activity of commercial banks?

17. What is a Central Bank responsible for?

18. Are central or commercial banks involved in the issue of money?

19. Are central banks subject to any control?

Ex. 9 Be ready to speak about the following issues. (Credit Situations)

1. The role of banks in the economy.

2. Banks as financial intermediaries.

3. Financial services offered by commercial banks.

4. Types of deposits.

5. Functions of a Central Bank.