UNIT 1 Central Banking System

канд. экон. наук, доцент НФУ, г. Новосибирск

Е-mail: [email protected]

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Список литературы:

1. Березовин Н. А. Основы менеджмента: учеб. пособие. Мн.: Новое знание, 2004.-336с.

2. Мижериков В. А., Юзефавичус Т. А. Введение в управление предприятием: учеб. пособие. М.: Педагогическое общество России, 2005.-352с.

3. Сабиров В. Ш. Предмет экономического исследования // Менеджмент в Сибири. 2004. № 6. [электронный ресурс] – Режим доступа. - URL: http://www.manag.ru/article.php?no=317

Информационное письмо и дополнительная информация о конференции доступна на сайте: http://sibac.info

Министерство экономического развития и торговли Российской Федерации

Российский Государственный Торгово-Экономический Университет

Кафедра английского языка

Старший преподаватель Попова М.Г.

ECONOMY AND FINANCE

(учебно-методическое пособие для студентов экономического факультета 2 курса)

Москва – 2008

Contents

Unit 1. Central Banking System……………………………………………………………2

Unit 2. Commercial Banks………………………………………………………………….6

Unit 3. Money Supply……………………………………………………………..……….10

Unit 4. Business Organizations………………………………………..……………………13

Unit 5. Taxation………………………………………………………….…………………17

Unit 6. The Stock Exchange, Shares………………………………………………………..20

Unit 7. The Stock Exchange, Bonds………………………………………………..………25

Unit 8. The Foreign Exchange Market…………………………………………….………. 29

Words and expressions……………………………………………………………………. 33

UNIT 1 Central Banking System

The central banking system is a major sector of any modern monetary system. Central banks such as The Bank of England, The Federal Reserve System (the Fed) in the USA, the Central Bank of Russia work together with the governments to control their countries’ economy. They are responsible for the implementation of monetary policy and supervision over the banking system.

Central banks have a number of different functions. They act as bankers for the government and for other banks, function as lenders of last resort to commercial banks with liquidity problems. To ensure the safety of the banking system, central banks impose reserve requirements, obliging commercial banks to deposit a certain amount of money with the central bank at zero interest.

Central banks look after the countries’gold reserves, issue banknotes and coins, the countries’ currency. These notes and coins are legal tender in the country where they are produced; this means that traders in that country may not refuse them when they are offered as payment. Banks also make sure that the countries` currency keeps its value.

Central banks keep inflation under control. Inflation happens when there is a lot more money (in the form of banknotes and credit) available than there are goods for sale. In other words, when demand for the goods exceeds supply. When this happens, prices increase sharply and often. To stop it, the central bank needs to take money out of circulation, for example by increasing interest rates. This method makes borrowing more expensive and means that fewer people will apply for credit. And the central bank can increase the amount of money that all banks have to deposit with it.

central banking system - система центрального банка

retail banking - операции банков с широкой клиентурой

wholesale banking - операции банков с крупными промышленными предприятиями

banking services, facilities - банковские услуги

major (adj) - значительный, главный

be responsible for smth. - отвечать за что-либо

e.g. He is directly responsible for the efficient running of the office. - Он напрямую отвечает за эффективную работу офиса.

responsibility (n) - ответственность

to accept responsibility for smth. - взять на себя ответственность за что-либо

implementation (n) - выполнение, осуществление, проведение

supervision (n) - надзор, наблюдение, контроль

under smb.'s supervision - под чьим-либо контролем

lender of last resort - кредитор последней инстанции (к кому можно обратиться за деньгами в критической ситуации)

liquidity (n) - ликвидность (степень, в которой активы какой-либо организации являются ликвидными, т.е. могут быть быстро проданы)

ensure (v) - гарантировать, обеспечивать

impose reserve requirements - налагать резервные требования

oblige (v) - обязывать, заставлять

be obliged to smb. - быть обязанным кому-либо

deposit - (v) класть, размещать

to deposit money with a bank – внести (депонировать) деньги в банк

to deposit funds on a 90-day basis in pound sterling – разместить средства сроком на 90 дней в фунтах стерлинга

amount (n) - сумма, syn: sum

interest (n) - процент

to pay interest on - выплачивать процент по

interest on a deposit - процент по вкладу

to earn interest - приносить процент

issue (v) - пускать в обращение (деньги и т. п.); осуществлять эмиссию

e.g. A new coin was issued. - Была пущена в обращение новая монета.

currency (n) - валюта

domestic (national) currency - местная (национальная) валюта

foreign currency - иностранная валюта

free currency - свободно конвертируемая валюта

legal tender - законное платежное средство

value (n) - стоимость, цена

at a certain value - по определенной цене

contract value of the goods - стоимость товаров по контракту

to place, put, set a value on - назначить цену

e.g.They paid him the value of his lost property. - Они возместили ему стоимость его пропавшего имущества.

available (adj) - доступный; имеющийся в распоряжении, наличный

demand (n) -спрос

demand for smth. - спрос на что-либо

e.g. They sound out the demand for securities. – Они изучают спрос на ценные бумаги.

exceed (v) - превышать

supply (n) – предложение

money supply – денежная масса, денежное предложение (количество денег, выпущенное в стране, обычно центральным банком

demand exceeds supply - спрос превышает предложение

increase (v) - возрастать, увеличивать(ся)

to increase by 10% - увеличиться на 10%

to increase in number, in size, in volume - увеличиваться в числе, размере, объеме circulation (n) - обращение

interest rate - процентная ставка

borrowing (n) - ссуда, заем, кредит

to borrow (v)-занимать, брать ссуду, кредит

to borrow (v) smth. from smb. - занимать что-либо у кого-либо

to borrow money - брать заем (ссуду)

to borrow short - брать краткосрочную ссуду

to borrow at high (low) interest - брать ссуду под высокий (низкий) процент

borrower (n) - заемщик

to stick to safe borrowers - отдавать предпочтение, ориентироваться на надежных заемщиков

apply (v) - обращаться

to apply to smb. for smth. - обращаться к кому-либо за чем-либо

e.g. We applied to the authorities for assistance. - Мы обратились к властям за помощью.

1. Answer the questions.

1) What is the central banking system?

2) What are central banks responsible for?

3) What are central banks’ main functions?

4) How do central banks ensure the safety of the banking system?

5) What is legal tender?

6) When does inflation happen?

7) How can central banks stop it?

2. Translate into English.

Центральный банк; современная денежная система; работать вместе с правительством; быть ответственным за проведение денежной политики; действовать в качестве банкиров для других банков, имеющих проблемы с ликвидностью; обеспечивать безопасность; обязывать банки вкладывать деньги в центральный банк под нулевой процент; следить за запасами золота; осуществлять эмиссию денег; предлагать в качестве платежа; сохранять свою стоимость; контролировать инфляцию; спрос на товары; намного больше денег в наличии, чем товаров; изъять деньги из обращения, повысив процентные ставки; сделать заем более дорогим; обратиться за кредитом.

3. Find proper definitions.

1) Supply - a) the ease with which an asset can be spent or sold

2) Interest rate - b) the money used in a particular country

3) Demand - c) the central bank, that lends to commercial banks if they

have no other means of borrowing

4) Currency - d) the cost of borrowing money, expressed as a

percentage of a loan per period of time

5) Lender of last resort - e) the willingness and ability of consumers to buy goods

and services

6) Liquidity - f) the willingness and ability to offer goods and services

for sale

4. Complete the text using the words:

reserve requirements, advice, supply, sells, buys, central bank, circulation, increases, decreases, by borrowing, lends, prevents, keep, requires

The Federal Reserve System

There is a 1) … for all states in the USA called the Federal Reserve System (the Fed) which controls various financial functions. All national banks are members of the Fed. They have a right to obtain funds 2) … from their district reserve banks, to use various services, which the system provides and to get financial 3) … and assistance.

The Fed controls the money 4) … and 5) … the economy from crisis. Its most powerful tool in controlling the money supply is the 6) …. It is the percentage of all deposits that a bank must 7)...with the Fed. If the Fed 8) … banks to keep 20% of all funds on deposit, then they can loan out the other 80% to individuals and companies.

The Fed also 9) … and 10) … government securities (bonds). When it buys government securities, it 11) … the money supply by putting more money in 12) …. When the Fed sells securities, it 13) … the money supply.

The Fed is the banker for other banks because it 14) … money to them.

5. Read the text and translate it into Russian.

The Bank of England

The Bank of England is Britain’s central bank. Founded in 1694, it is the world’s second oldest central bank, being six years younger than Sweden’s Riksbank. It was privately owned until it was nationalized in 1946.

The Governor, Deputy Governor, and 16 Directors who form the Court of Directors are appointed by the sovereign on the recommendation of the Prime Minister.

The Bank of England is responsible for the control of the banking system in the interests of the nation. Its main function is to act as the Government’s bank in the widest possible sense. It looks after the bank account of the Government just like an ordinary bank does for its customers. Into the account go all tax receipts and any other transfers of money from various banks, and out of it go all payments.

The Bank of England is a banker for the commercial banks and other financial institutions. The ordinary commercial banks keep about half of their cash assets on current accounts with the Bank of England which uses them for the day-to-day settlement of indebtedness between the banks. A lot of overseas central banks have accounts with the Bank of England to facilitate a wide variety of international transactions.

The Bank is the central note-issuing authority. New notes are issued and worn notes are withdrawn in very large numbers every day.

The Bank acts as the Government’s agent for the administration of exchange control and protects the gold and foreign exchange reserves.

It implements the Government policy in the money market and the loan market by raising or lowering Bank Rate.

Because of its important position in the financial affairs of the country the Bank gives useful financial advice to the Treasury to assist it in forecasts of the economic situation. The Bank also advises companies on capital structure and finance.

The style of work of the Bank of England is much admired in the world and gives the credit for the safe and successful growth of London as the world’s number one international centre.

6. Summarize the information of the unit and speak on the topic: Central Banking System