Words you

establishment - заклад

on deposit - на депозит

on demand - на вимогу

to negotiate - вести переговори

bill - вексель

bill of exchange - переказний вексель

repayable - належний до оплати

promissory note - простий вексель

financial standing - фінансовий стан

to issue a letter of credit - виставляти/

виписувати акредитив

draft - тратта, переказний вексель

VI. International banks.

a) Open the brackets putting the verbs in the correct form.

b) Say what you have learnt from the text about international banks.

Basic principles of commercial banking best (to demonstrate) in the case of international banks. These institutions are the dominant traders in the Euromarkets and the foreign exchange markets and are very active in some domestic credit and bond markets. The Eurocurrency market (to consist) of banks, commonly referred to as 'Eurobanks', which accept deposits and (to lend) in foreign currencies. Most of the banks active in the Eurocurrency market also (to trade) extensively in the foreign exchange markets. The Eurobanks concerned include some of the largest banks in the world.

Eurobanks are typically London branches of these large international banks and primarily (to engage) in intermediation in short-term deposits denominated in currencies other than Sterling. Eurosterling dealing (to take) place outside of British jurisdiction. The large American and Japanese banks (to dominate) the Eurocurrency business, but major British banks also (to be) very active throughout the 1980's. Some of the large world commercial banks also (to form) 'consortium' banks as special purpose joint ventures set up to deal in the Eurocurrency market. From the parent bank's point of view, the Eurobank branch or consortium (to be) able to operate outside the range of domestic banking regulations and therefore (to achieve) considerable cost economies due to the absence of reserve requirements and other regulatory costs. International co-operation on capital adequacy standards (to begin) to erode this privileged position. As a result, the global financial intermediation activities of international banks are now increasingly subject to some form of international control. A further advantage of Eurobanking (to stem) from the scale of borrowing and lending in this market. This means that major economies of scale can be realized by banks. These factors explain why Eurocurrency deposit and lending rates fall within the equivalent domestic values. Thus the Eurosterling loan rate (to be) lower than the British domestic bank loan rate and the Eurosterling deposit rate (to be) higher than the British deposit rate. The resulting very narrow profit margin in the Eurocurrency market is only possible due to the transaction and regulatory cost savings achievable in this market compared with equivalent domestic markets.

184 PART III. BANKING

VII. Match the abbreviations and their definitions.

1. FCR

a) Special drawing rights

2. SAD

b) Capital, asset, management, earnings, liquidity

3. SDR

c) International Bank for Reconstruction and Development; usually referred to as The World Bank.

4. CAD

d) The London Interbank Offered Rate: the key rate in international lending.

5. CAMEL

e) European Monetary System: a monetary arrangement of the EU to provide exchange rate stability and stimulate economic cooperation and trade.

6. EMS

f) Cash Against Documents: a payment which is made upon presentation of a full set of documents, i. e. an L/C.

7. IBRD

g) Forwarder's Certificate of Receipt: a slip given by a forwarder to confirm that he or she has received goods for transportation.

8. LIBOR

h) Repurchase agreement

9. NOW

i) Negotiable of withdrawal account

10. REPO

j) Single Administrative Document: one multi-purpose document used in EU countries for the transportation of goods.

VIII. Pair-work. Prepare a short talk on the following:

If you have a bank account and heard that your bank was not honouring its obligations towards depositors, what would you do about your account?

UNIT 4. COMMERCIAL BANKS

2J—4-7SP

185

Дата добавления: 2014-12-23