NOTESзаймати місце Federal Deposit Insurance Corporation

dual banking system or 2-tier system - (FDIC) - Федеральна корпорація по

дворівнева банківська система страхуванню депозитів

state bank - тут банк штату to merge - поглинати (шляхом

national bank - національний банк придбання цінних паперів чи основного
(категорія комерційних банків у СІЛА) капіталу)

PART III. BANKING

branch banking - банківська діяльність savings and loan association - позичково-

на основі філіалів ощадна асоціація (СІЛА)

to prohibit - забороняти mutual savings bank - взаємно-ощадний

to drive out - витісняти банк (США)

bank holding companies - банківська thrift institutions - ощадні установи

холдингова компанія mortgage - застава, іпотека

consumer loan - споживчий кредит

EXERCISES I. Answer the following questions.

1. Who supervises banks in the USA?

2. What is the difference between National and State banks in the USA?

3. What is FDIC?

4. What are the regulations concerning branch banking in the USA?

5. What financial institutions compete with commercial banks in the USA?

6. What does savings and loan associations and savings banks specialise in?

II. Early Banking History in the USA. Fill in each space with the appropriate word from the box.

1.	a) services	b) facilities	c) functions	d) operations
2.	a) policy	b)exchange	c) relations	d) trade
3.	a) society	b) banking	c) economics	d) economy
4.	a) banks	b) coins	c) people	d)goods
5.	a) barter	b) fight	c) negotiate	d) exchange
6.	a) issued	b) draw	c) made	d) designed
7.	a) borrow	b) manufacture	c) lend	d) deposit
8.	a) support	b) launch	c) finance	d) begin
9.	a) government	b) office	c) authority	d) bank
10.	a) banking	b) financing	c) management	d) auditing
11.	a) activity	b) system	c) transaction	d) business
12.	a)cheques	b) currencies	c) bills of exchange	d)bonds
13.	a) issued	b) minted	c) accumulated d) hoarded
14.	a) price	b) rate	c) value id) cost
15.	a) depositors	b) customers	c) managers id)emloyees

The history of banking goes back thousands of years. The Babylonians performed

many of the banking (1)_____ of today, taking deposits, engaging in foreign (2)_______, and

issuing paper with the same function as checks. Over time, banks grew and prospered and
became a vital part of the (3)____ throughout the world.

In the United States, however, there were no banks at first; and strict laws limited the

number of (4)____ that could be brought to the colonies. Thus, colonists were forced to (5)

__, that is. to trade goods for goods (for example, cotton and tobacco for shoes and

lumber).

The demand for money was so great that Massachusetts (6)______ its own paper money

in 1690, and other colonies soon followed suit. Land banks were established to (7)__________

money to farmers. Britain ended both practices by 1741. Remember, the country was
under the rule of Britain back then. In fact, a new bank was formed in Pennsylvania
during the American Revolution to (8)______ the War against England.

Alexander Hamilton persuaded Congress to form central (9) ________ in 1781 over the

objections of Thomas Jefferson and others. It closed in 1811, only to be replaced in 1816 because state-chartered banks couldn't support the War of 1812. Throughout this period,

there was serious debate about the role and function of (10)_____ in this country. The battle

between the Second (Central) Bank of the United States and state banks got really hot in

UNIT 1. BANKING SYSTEMS 147

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the 1830s. Several banks in President Andrew Jackson's home state were hurt by pressure from the Central Bank. The fight ended when the Central Bank was closed in 1836.

By the time of the Civil War, the banking (11)______ was a mess. Many different banks

issued different kinds of (12)____. During the war, coins were (13)_____ because they were

worth more as gold and silver than as coins. The government began printing money
("greenbacks") that was money only because the government declared it so, not because
the material it was made from had any (14)____ of its own.

Eventually, the government established federally chartered and state-chartered banks.
The chaos continued and reached something of a climax in 1907, when many banks failed.
People got nervous about their money and went to the bank to withdraw their funds.
Shortly thereafter, the cash ran out and some banks had to refuse money to (15)______.

III. Match the terms and definitions.

1. commercial bank	a) the central bank of the UK.
2. mutual savings bank	b) when a transaction is initiated at a foreign branch of a bank, the home branch to which the instructions are sent to this bank.
3. thrift institution (thrifts)	c) bank that carries out government economic policy, influences interest and exchange rates and monitors the activities of commercial and merchant banks, functions as the government's banker and is the lender of the last resort to the banking system.
4. Federal Reserve Banks	d) bank in which money may be deposited and interest received.
5. Girobank	e) institution that specializes in raising capital, particularly for use in business or industry.
6. Bank of England	f) bank owned and administered by the government as in some European countries, or a bank charted by the US government.
7. correspondent bank	g) corporation that provides deposit insurance for US banks.7
8. merchant bank	h) in the US, thrift institutions which have no stockholders but are owned by the depositors.
9. discounting bank	i) bank that concentrates on cash deposit and transfer services to the general public. It may be a join-stock bank or a private bank.
10. savings bank	j) government department that deals with national finance and government funding, and is responsible for the execution of the government's economic policy
11. national bank	k) bank that specializes in discounting bills of exchange.
12. clearing bank	1) central banks of the USA, each of which is controlled by a state government.
13. central bank	m) a savings and loan association, savings bank or credit union.
14. Treasury	n) bank that is a member of a clearing house
15. FDIC	o) banking system whereby money may be transferred from one bank account to another without a cheque being written.

IV Short-term Investment. Fill in each space with the appropriate word or words from the box.

tax	invest	fixed	notice
interest	access	cheque-book	disposal
sum	investment	block	entitled

If you want to (1) ____ money at short term, you've got several possibilities: first, a

current account. This gives you the possibility of having all your money at your immediate
(2)___. It also entitles you to a (3)____. However, it only gives 0.5% (4)_____.

PART III. BANKING

Second, you've got a deposit account, which usually pays about 3.5% interest, less (5)

__. In that respect, a deposit account is a better (6)_____ than a current account. However,

though you are (7)____ to a cheque-book, you can only withdraw up to a certain (8)_______

each month. For larger amounts you must give the bank a few months' (9)______.

Finally, you have certificates of deposit. These pay in the order of 6.5% interest.
However, they (10)____ your capital for a (11)____ period of 3, 4 or 5 years.

Your choice of short-term investment, therefore, will depend largely on how quickly
you'd like to have (12)____ to your money.

V Synonyms. Complete the sets of synonyms from the list.

a) agreement - e) repay -

b) company - f) creditworthiness -c)approved - g)expenses -

d) bought -

authorized, venture, pay back, trustworthiness, costs, purchased, enterprise, sanctioned, procured, contract, contracted for. arrangement, pay over, partnership, solvency, reimburse, paid for, credit standing corporation, expenditures, deal, licensed, understanding, allowed, confirmed, acquired, input, firm, business, refund, credit capacity, disburse, bargain, solvability, ratified, о editability. outlay, recompense, transaction, settle up with, permitted, obtained.

VI. Technical Words I. Choose the correct answer.

1. What does it mean when a company has an AAA rating?

a) It means that the company is a first class company. You can lend it lots of money.

b) It means that it is a first class company with cashflow problems.

c) It means that the company is a bank.

d) It means that the company is backed by the government.

2. What is the meaning of 'acceptance'?

a) It is a guarantee from the central bank that another bank has money.

b) It is a guarantee from a bank that payment will come.

c) It is another word for a banker's draft.

d) It is a banking word which is no longer used.

3. What does Acceptance House Committee' mean?

a) It is a club in London whose members are aristocrats.

b) It is a club in London, which guarantees traders bills. It is a very exclusive club.

c) It is a committee which represents all the banks in the world.

d) It is a committee which gives banks permission to make loans.

4. In banking, what is the meaning of 'an advance'?

a) A loan.

b) Progress.

c) A win.

d) The money you get when you retire.

5. Which of the following companies might have 'an administrator'?

a) A company which decides to sell a totally different product.

b) An AAA company.

c) A company which has gone bankrupt.

d) A bank which decides to enter the real estate market.

6. Which of the following is an 'agent bank'?

a) It is the bank which monitors the repayments when there is a syndicated loan.

b) It is the borrower of a syndicated loan.

c) It is a subsidiary of another financial institution.

d) It is the borrower's bank.

7 What is the meaning of AGM'?

a) It means a type of meeting which happens every week.

b) It is a meeting which takes place monthly.

c) It is a shareholders' meeting which takes place every month.

\IT 1. BANKING SYSTEMS

d) It is the shareholders' meeting which takes place every year.

8. What does APR' mean?

a) Annual Percentage Rise.

b) Annualised Percentage Raise.

c) Annual Parentage Rise.

d) Annual Percentage Rate.

9. What does ASR stand for?

a) All signs required.

b) All senders required.

c) All signatures ready.

d) All signatures required.

10. Which of the situations below describes a 'barter'?

a) A country buys oil from another and pays in dollars.

b) A country buys oil from another and borrows the money to pay for it.

c) A country buys oil from another and sends the oil exporter military equipment a; payment for the oil.

d) A country buys oil from another and then refuses to pay.

11. What is a 'building society' (in Britain)?

a) It is a company which specializes in making buildings.

b) It is a construction company.

c) It is a financial institution which specialises in mortgages.

d) It is a financial institution which does not specialise in mortgages.

12. What do we call institutions which have a very wide variety of financial services?

a) Finance Houses.

b) Financial Superpowers.

c) Financial Supermarkets.

d) Merchant Banks.

VII. Cash. Choose the correct definition.

1. to cash a cheque is to...

a) exchange a cheque for cash

b) pay money into your account

c) pay money into someone else's account

2. to cash in is to...

a) sell something (shares/traveller's cheques)

b) pay cash for something (shares/traveller's cheques)

c) open the cash register

3. to cash in on is to...

a) forecast the receipt of cash

b) profit from something

c) calculate money spent

4. a cashier is a...

a) dealer in foreign currency

b) book in which payments are recorded

c) person who pays and receives money

5. to cash up is to...

a) add up cash at the end of the day

b) obtain cash from a bank

c) get a reimbursement

6. a cash crop is...

a) the commission charged on foreign exchange

b) something that is grown in order to be sold

c) a company's reserves in cash for emergencies

7. cash flow is...

a) the conversion rate between currencies

b) money which is immediately available

c) the movement of money into and out of a business

PART III. BANKIN:

8. petty cash is...

a) small denomination bank notes

b) money held in a business to cover small expenses

c) small denomination coins

VIII. Banks and Payments. Find the words in these three conversations which fit the definitions. The first one has been done for you as an example.

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