A) Bank Loans and Overdrafts

B) Discuss the services provided by banks.

A) Explain the difference between loans and overdrafts.

Ex. 12. Read and discuss the texts that follow.

DISCUSSION

B) Sum up the text in 5-7 sentences and present your summary in class.

Ex. 11. a) Fill each gap with a suitable word from the box.

level	mergers	competition
brought	shows	survey
cause	per	number
single	spread	across

Mergers and Acquisitions to Reduce Europe's Overbanking

Europe is vastly overbanked and overbranched, according to a recent_______of 100 European banks from 13 countries.

The survey_______that the UK is the least overbanked country in Europe, with two banks _______ million people, while central Europe is the most overbanked, that is, Germany (44), Switzerland (58) and Austria (131). Southern Europe – Italy, Portugal and Spain is overbranched rather than overbanked. Europe as a whole has 23 banks per million population.

The survey concludes that the_______of banks in Europe is set to fall by over a quarter in the next 10 years, or by about 2,300, of which 1,300 will be in Central Europe, since the bank extinction rate of the last 10 years is likely to continue.

The survey concludes that_______in banking has forced down the rate of return on assets to an uneconomic_______. The main competitors have been the securities and insurance industries. The decline in overbanking will be _______ about mainly through mergers and acquisitions.

Other conclusions include the prediction that there will be more domestic than cross-border_______many of which will involve small savings and mutual banks, merging in some cases with commercial banks.

Bankers see European economic and monetary union (EMU) as the single most important_______of the decline in the number of banks, linked with competition and technology.

The Euro will bring down the barriers to the_______banking market and make bank interest rates lower, more transparent and more competitive. The_______of telephone and electronic banking will reduce the need for branches and accentuate competition both within and_______borders.

Words you may need:

acquisition n приобретение, поглощение

extinction n вымирание

force down v снижать

the rate of return норма прибыли

prediction n предсказание; (зд.) прогноз

transparent adj прозрачный

accentuate v подчеркивать

There are two principal ways in which a businessman can borrow money from his bank: by means of a loan and by means of an overdraft.

An overdraft is "a sum of money drawn from a bank by a customer that is more than the amount he holds in his account with the bank". Permission of the bank has to be obtained for this facility, and interest is charged on the outstanding amount.

Here is an extract from Statement of Terms and Conditions for Non-U.S. Banks of Citibank, N.Y.:

"Customer? will receive overdraft interest statements monthy. However, under exceptional temporary circumstances, statements may be issued daily. Charges for overdrafts will be calculated in accordance with normal backing practice at Citibank, New York."

When the bank makes a loan, a separate loan account is opened at the bank in the borrower's name. The amount of the loan is debited in the loan account and credited in the customer's current account. Interest is charged on the full amount of the loan even though the borrower might not draw on the full amount immediately.

Because bank funds must be kept fluid, loans are nearly always short term, and a bank will not lend money to a customer unless it knows that the money can be repaid quickly. Normally the bank likes to have its loans repaid or its overdrafts charged, within a year.

Words you may need:

to charge interest взимать проценты

outstanding amount (зд.) сумма превышения

extract n выдержка, отрывок

terms and conditions условия

statement n выписка

temporary adj временный

charges n pl расходы, издержки

calculate v рассчитывать

separate adj отдельный

to keep fluid (зд.) работать (о деньгах)

Дата добавления: 2014-11-29