SPEAKING. Gabriel Mangano is an economics research student, specializing in monetary policy

Ex. 3.

Central Banking

LISTENING

Gabriel Mangano is an economics research student, specializing in monetary policy. You will hear him outlining the functions of a central bank, and discussing whether it should be independent from the government, and run by bankers, or under the control of the government.

Ex. 1. Match the central bank and the country?

– the Bank of England – the Federal Reserve Board (USA) – the Bundesbank (Germany) – the Japanese central bank – the Chinese central bank – the National Bank

Germany Belarus China the United Kingdom the USA Japan

Ex. 2. Make sure that you understand the following words and word combinations.

to implement monetary policy

interest rate ceilings and floors

a fluctuation of interest rate

upswing /downswing of the exchange rate

a bank run = a run on the bank

A. Listen to Part One of the interview about the functions of a central bank, and fill in the gaps.

The first one is actually to implement monetary policy. There are roughly three ways to do it. First (1a)……………, which means limiting, upwards or downwards, the fluctuations of the interest rate.

The second way to implement monetary policy is simply (1 b)…………… coins, banknotes.

The third one, which is a bit more modern, is those (1 c)……………, which are simply buying and selling government bonds to and from commercial banks.

So that was the first main task of a central bank. The second one is (2) …………… I would say. [...]

The third main task, yes,(3) ……………., I would say — make sure that the commercial banks have enough liquidities, for instance, to avoid any bank run. [...]

The fourth main task of the central bank would be to (4)………………………, in case, actually, one of these commercial banks goes bankrupt and the investors, the people putting money in the bank, have to get back their money.

B. Read the six sentences below, which also summarize central banking functions, but slightly differently, and match them up with the six expressions you have written in A.

a) controlling the amount of banknotes in circulation;

b) establishing maximum and minimum lending rates, thereby controlling the credit system;

c) ensuring that banks have a sufficient liquidity ratio to allow customers to withdraw their deposits when they want;

d) intervening on foreign exchange markets, buying or selling large amounts of the national currency, to prevent major fluctuations;

e) lending money to a commercial bank in danger of going bankrupt;

f) selling government bonds to commercial banks or buying them back, in order to alter the amount of credit the banks can offer (and thereby alter the money supply).

C. Listen to Part Two of the interview and answer the following question:

What is Gabriel Manganos opinion concerning central bank independence, and why?

Look through the following statements. Listen to the extract again, and decide whether the statements are TRUE or FALSE. Correct them if they are false.

1. Gabriel Mangano says that governments tend to increase the money supply in the months before an election, which helps reduce unemployment.

2. Mangano states that the central bank should be the branch of the government that implements monetary policy.

3. Mangano considers that the central bank should be the branch of the government that implements budgetary policy.

4. Mangano suggests that governments always have a budget deficit.

5. Mangano points out that the US Federal Reserve is not concerned with price stability.

6. Mangano is of the opinion that there should be a limit to the central bank's independence.

Дата добавления: 2014-11-16