Language practice. I. Mind the use of the words: requirements, deposit, check clearing, reserves, assets

I. Mind the use of the words: requirements, deposit, check clearing, reserves, assets.

1. Central bank imposes reserverequirements. 2. Commercial banks promise to pay depositors the full amount of their deposits. 3. The most important service of the Fed is checkclearing (клиринг чеков). 4. The Fed’s power as an economic policymaker comes from its ability to control bankreserves. 5. The ordinary commercial banks keep about half of their cash assets on current accounts with the Bank of England.

II. Complete the blanks.

1. Most of central banks function for … not for private customers. 2. Central banks are into the … of money. 3. In the countries with the developed market economy there … bank systems. 4. Central banks carry out … … functions. 5. Central banks store official … … reserves, regulate … and … sphere and … relations. 6. In modern conditions commercial banks managed to expand … of urgent and savings …. 7. Commercial banks are created on the share or … … beginnings. 8. The bank system of Belarus is …. 9. The National Bank of Belarus maintains safe functioning of …. 10. The National Bank of Belarus establishes and exercises … … …. 11. There are three important groups of customers at the Bank of England: … … …. 12. The government keeps its … at the Bank of England. 13. Fed is indipendent agency of … founded in 1913. 14. Fed provides … to the banking system.

III. In these sentences certain nouns are printed in bold. Give derivatives of them and fill in the blanks.

1. Central banks act as bankers to government. Their … earns profit to the … system. 2. Central banks lend money to commercial banks. They act as … of last resort to commercial banks. 3. Commercial banks invest deposited money in profitable securities. These … bring them high profit. The low level of commercial banks include some financial institutions – like … companies, … funds, etc. 4. Some people borrow money at the banks and others deposit their savings. The primary function of a bank today is to act as an intermediary between … who wish to make interest on their savings and … who wish to obtain their capital. 5. Banks contribute some part of deposited money into different projects. In modern conditions commercial banks managed to expand essentially reception of urgent and savings ….

IV. Say whether these statements are true or false, and if they are false say why.

1. The central banking system is greatly important for fiscal policy of the national government. 2. Central banks function for private customers. 3. Central banks issue money. 4. Central banks do not act as lenders of last resort to commercial banks in the case of financial crisis. 5. In the countries with the developed market economy there are one-level bank systems. 6. The system top level is presented by commercial banks. 7. Commercial banks are subdivided into universal and specialized. 8. The central bank in majority of the countries belongs to the state. 9. Commercial banks store official gold-currency reserves. 10. Central banks give loans to commercial banks. 11. Commercial banks carry out a very limited range of operations. 12. Central banks are created on the share or joint-stock beginnings. 13. The National Bank of Belarus carries out foreign exchange regulations, establishts and exercises foreign exchange control.

V. Answer these question.

1. What role does the central bank play in any country? 2. What is monetary policy? 3. What services do banks offer? 4. Do commercial banks play a very important role in an economy? 5. What bank systems are there in the countries with the developed market economy? 6. How are commercial banks subdivided? 7. What historically developed operations do commercial banks carry out? 8. What base are commercial banks created on? 9. What services do modern joint-stock banks supply? 10. What is the characteristic of modern bank system of Belarus? 11. What functions does the National Bank of Belarus perform? 12. When was the Bank of England founded? 13. Why is the Bank of England called the “government bank”? 14. What are the functions of Fed?

Unit 6

MARKETS

Word list

Market – рынок; variety – разнообразие; procedure – процесс; whereby – посредством чего; party – сторона (участник); engage – вовлекать; barter – бартер; rely on – полагаться на; offer – предлагать; establish – устанавливать; compete – конкурировать; competitive – конкурентный; suggest – предполагать; trade – торговать; monopoly – монополия; monopsony – монопсония (рынок одного покупателя); extreme – крайняя степень; perfect – совершенный; vary – различать; scale – масштаб; location – расположение; participant – участник; retail – розничный; hold (held) – проводить, располагать; parking lot – стоянка для автомашин; ongoing – постоянный; occasional – от случая к случаю; ad hoc – организованный по конкретному случаю; intermediate goods – промежуточные товары; stock market – фондовый рынок; mainstream (economy) – чисто рыночная экономика; transaction – сделка; price – цена; facilitate – ускорять; allocation – размещение; originate – возникать; assist – сопутствовать; define – определять; liquid assets – ликвидные активы, оборотный капитал; bond market – рынок облигаций; future market – фьючерсный рынок; lend – кредитовать, давать взаймы; borrow – занимать; origin – происхождение, начало, зарождение; inter meditation – посредническая деятельность; turnover – оборот; transferable securities – ценные бумаги, которые могут быть переуступлены другому лицу; expansion – расширение; facilities – услуги; increasingly – все больше и больше; sophisticated – сложный, более современный; force – вынуждать, заставлять; cross-border trading – международная торговля; equity – обыкновенная акция; arbitrage – арбитражные операции; emerge – возникать; advanced countries – развитые страны.

Text study

A market is any one of a variety of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labor) in exchange for money from buyers. It can be said that a market is the process in which the prices of goods and services are established.

For a market to be competitive, there must be more than a single buyer or seller. It has been suggested that two people may trade, but it takes at least three persons to have a market, so that there is competition on at least one of its two sides. However, competitive markets rely on much larger numbers of both buyers and sellers. A market with single seller and multiple buyers is a monopoly. A market with a single buyer and multiple sellers is a monopsony. These are the extremes of imperfect competition.

Markets vary in form, scale (volume and geographic reach), location, and types of participants, as well as the types of goods and services traded. Examples include:

· physical retail markets, such as local farmers' markets (which are usually held in town squares or parking lots on an ongoing or occasional basis), shopping centers;

· (non-physical) internet markets (see electronic commerce);

· ad hoc auction markets;

· markets for intermediate goods used in production of other goods and services;

· labor markets;

· international currency and commodity markets;

· stock markets, for the exchange of shares in corporations.

In mainstream economics, the concept of a market is any structure that allows buyers and sellers to exchange any type of goods, services and information. The exchange of goods or services for money is a transaction. Market participants consist of all the buyers and sellers of a good who influence its price. This influence is a major study of economics and has given rise to several theories and models concerning the basic market forces of supply and demand. There are two roles in markets, buyers and sellers. The market facilitates trade and enables the distribution and allocation of resources in a society.

Historically, markets originated in physical marketplaces which would often develop into − or from − small communities, towns and cities. Although many markets exist in the traditional sense − such as a marketplace − there are various other types of markets and various organizational structures to assist their functions. The nature of business transactions could define markets.

Financial markets facilitate the exchange of liquid assets. Most investors prefer investing in two markets, the stock markets and the bond markets. NYSE, AMEX, and the NASDAQ are the most common stock markets in the US. Futures markets, where contracts are exchanged regarding the future delivery of goods are often an outgrowth of general commodity markets.

Currency markets are used to trade one currency for another, and are often used for speculation on currency exchange rates.

The money market is the name for the global market for lending and borrowing.

Stock Markets are the means through which securities are bought and sold. The origin of stock markets goes back to medieval Italy. During the 17th and 18th centuries Amsterdam was the principal centre for securities trading in the world. The appearance of formal stock markets and professional intermediation resulted from the supply of, demand for and turnover in transferable securities. The 19th century saw a great expansion in issues of transferable securities.

The popularity of transferable instruments as a means of finance continued to grow and at the beginning of the 20th century there was an increasing demand for the facilities provided by stock exchanges, with both new ones appearing around the world and old ones becoming larger, more organized and increasingly sophisticated.

The largest, most active and best organized markets were
established in Western Europe and the United States. Despite their
common European origins there was no single model which every
country copied.

The rapid development of communications allowed stock exchanges to attract orders more easily from all over the country and later the barriers that had preserved the independence and isolation of national exchanges were progressively removed, leading to the creation of a world market for securities. The 1980s saw the growing internationalization of the world securities markets, forcing stock exchanges to compete with each other. Cross-border trading of international equities expanded.

Although many securities were of interest to only a small and localized group, others came to attract investors throughout the world. Increasingly, arbitrage between different stock exchanges ensured that the same security commanded the same price on whatever market it was traded. London, Paris, New York became dominant stock exchanges.

Buying and selling in well-structured markets creates a price that satisfies both buyers and sellers. For example, trade unions are sometimes accused of spoiling the market mechanims of a labour markets, in reality it is the opposite: blue collar trade unions make the buyer and seller more equally powerful when they negotiate the price for a working hour. When the buyer and seller are equally powerful, then the price for a commodity is acceptable to both parties.