Banking appears to have been started when a man first deposited gold with a goldsmith having a vault in order to keep it safe till it was needed to make payments

Loans make up the bigger share of clearing bank lending.

8. A lender is a person or institution that makes a loan to a borrower in order to finance the latter’s consumption or investment.

Exercise VI. Прочитайте текст, не пользуясь словарем. Догадайтесь о значении термина liquidity. Найдите в тексте слова с таким же корнем и переведите их на русский язык.

LIQUIDITY

Liquidity is determined by the speed and certainty which as an asset can be converted into cash (notes and coins) in order to be used as a means of payment. The quicker as an asset can be converted into cash, the more liquid it is. Therefore, money is sure to be the most liquid asset of all since it is widely accepted as a medium of exchange, while durable and highly specific assets such as machinery are the least liquid as such asset cannot be converted into money without finding a buyer and determining the value of the asset to be sold.

A bank’s assets can also be characterized in terms of the liquidity.

Loans to households and firms do not appear to be very liquid forms of bank lending, for the borrower may not be able to repay the sum owed to the bank whenever the bank demands.

Securities including government bonds and shares of firms, though traded on the stock exchange, cannot be relied upon for a certain amount of cash as their prices are known to fluctuate from day to day. Therefore, financial investment in securities seems also to be liquid.