Currency, banking and finance

The pound sterling (£1), of 100 new pence, is the basic unit of currency (£ 0.6551 equals US $ 1; 1996). In 1968 Britain took the first step in a three-year conversion of its currency to the decimal system of coinage by introducing the first two new coins, the 5-pence piece (equal to one old shilling) and the 10-pence piece. In 1969 the 50-pence coin was introduced, replacing the old 10-shilling note. The conversion was completed in 1971. The pound was permitted to float against the dollar and other world currencies beginning in June 1972.

The Bank of England, chartered in 1694, was nationalized in 1946, and it is the sole bank of issue in England and Wales. Several banks in Scotland and Northern Ireland may also issue currencies in limited amounts. Great Britain has, in addition, some 13 major commercial banks with more than 10,000 domestic and overseas branches, most of which are offices of the four leading banks: Lloyds, Barclays, National Westminster, and Midland. Some banking services are provided by the postal system, saving banks, and co-operative and building societies.

There are also a number of domestic clearing banks, discount houses, and other financial institutions, such as the London Stock Exchange, and Lloyd’s insurance market, linked to Britain’s role as one of the world’s leading financial centres. In 1994 there were come 486 banks registered in the United Kingdom, as well as many other banking and non-banking institutions. Banking, finance, insurance and leasing services accounted for about 20 per cent of Britain’s output, a substantial rise over a decade earlier, and 13 per cent of employment. In the mid-1990s about 16 per cent of the workforce were employed in the banking and finance sectors. Net overseas earnings were some US$25 billion (£15.6 billion). Historically, the financial services industry has been based in the famous “Square Mile” in the City of London. This remains very much the case today, even though Manchester, Cardiff, Liverpool, Leeds, Edinburg and Glasgow have developed as financial centres in recent years. The City of London, however, has the greatest concentration of foreign banks in the world and accounts for 20 per cent of total international bank lending. It is also has one of the world’s largest insurance markets, is the world’s top centre for trading overseas equities, has one of the world’s largest financial derivatives markets, and is a leading market for trading commodities such as copper, gold, cocoa and coffee.

READ AND DRAMATIZE THE FOLLOWING DIALOGUES:

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A. Here is a bank. When does it close?

B. It closes at half past three. Some banks are not closed until six o’clock on Tuesday, but not this bank. Now look for this foreign exchange counter.

A. These are the paying-in counters. Is that the foreign exchange counter?

B. No, it isn’t. That’s inquiries. This is the foreign exchange counter. Change your Swiss money first.

A. I can’t change my money.

B. Why not?

A. Because I haven’t got it. It’s in my blue handbag. There’s nothing in this handbag.

B. Oh, we can’t go to the hotel again. It’s late. But don’t worry.

A. Can I change it tomorrow?

B. Yes, you can.

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WOMAN: I’d like to cash this traveller’s cheque, please.

BANK CLERK: Have you got your passport with you, madam?

WOMAN: Yes, here it is.

BANK CLERK: Thank you. Would you sign the cheque just here?

WOMAN: Yes.

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