Banking system in Ukraine

A. DIALOGUE

D) Federal Reserve System

C) National Bank of Ukraine

B) main functions of the central banks

A) the central banking system

monetary system; fiscal policy; government; private sector; central banks; implementation; monetary policy; supervision.

to control; money supply; to fix; interest rate; lender; liquidity problems; to issue coins and bank notes; exchange rate; to intervent; to ensure the safety; to oblige; to deposit; amount of money zero interest; “prudential ratios”.

market reforms; to pursue; monetary policy; inflation; budget deficit crediting; to use instruments; fixed targets; refinancing; interest rates; reserve requirements; foreign currency; quantity restrictions.

agency of Congress; reserve banks; board of governors; headquarters; functions; to provide services; to stabilize; to control; quantity of money

— III. ORAL PRACTICE

1. Read and translate the dialogue in pairs:

Foreigner: What is characteristic of the Ukrainian banking system these days?

Ukrainian: The banking system in Ukraine is organized as a 2-tier system. The first tier is represented by the National Bank of Ukraine. The second tier consists of commercial banks as well as branches and representations of foreign banks.

Foreigner: Has the NBU supported the economic and financial transformation of the country, the ongoing reforms?

Ukrainian: Definitely. By implementing monetary policy the NBU has contributed to controlling the money supply and combating inflation.

Foreigner: The interest rate policy has become more dynamic, hasn’t it?

Ukrainian: Yes? The NBU has introduced lombard operations, created a new system of refinancing commercial banks and reduced the share of special-purpose credits.

Foreigner: what about the legal base? Is it adequate?

Ukrainian: More or less. The Law on Banking specifies rules for banking activities, for example, types of operations, operations with hard currency, etc.

Foreigner: So, foreign banks can be set up and can operate in Ukraine, can’t they?

Ukrainian: They can have branches and representation offices.

Foreigner: Your National bank is exempt from taxes. And what tax treatment is applied to your commercial banks? What taxes are paid by commercial banks?

Ukrainian: Tax on profit, tax on property, tax on income from securities and charges to the Pension Fund, to list the main.

Vocabulary:

2-tier system – дворівнева система

to be represented (by) – бути представленим (ким-небудь)

lombard operations – операції з ломбардними кредитами

legal base – законодавча база

specify – встановлювати, обмовляти

to exempt from taxes – бути звільненим від податків

tax treatment – податковий режим

apply – застосовувати

charges – відрахування

2. Read the dialogue, translate the Ukrainian remarks into English and act it out:

Foreigne r: Western bankers unanimously admit that your banking system has changed rapidly since Ukraine embarked on economic reforms.

Ukrainian: Так, це так. Я радий почути таку оцінку. Наша банківська система змінилась, і вона є дворівневою системою. Перший рівень представлений Національним Банком, а другий – комерційними банками.

Foreigner: Undoubtedly, your National Bank has contributed to the process and supported the reforms.

Ukrainian: Я особисто вважаю, що зусилля НБУ по здійсненню кредитно-грошової політики в нових умовах, в особливості по контролю за грошовою масою у боротьбі з інфляцією, важко переоцінити.

Foreigner: Central banks in market oriented economies are “lenders of last resort” for banks. Does your National Bank help banks with liquidity problems?

Ukrainian: Хочу перш за все зазначити, що НБУ, контролюючи роботу комерційних банків, прагне забезпечити надійність та стабільність банківської системи. Він видає та відкликає банківські ліцензії, вводить резервні вимоги, що зобов’язують комерційні банки депонувати частину своїх активів у цінні папери під нульові відсотки.

Foreigner: Recent years saw a rapid growth in the activities of foreign banks in the US. What about Ukraine?

Ukrainian: Наші банки поки що в певні мірі захищені від конкуренції іноземних банків, хоча іноземні банки мають свої філіали та представництва в Україні.

3. Make up a dialogue on the following:

a) Imagine that your friend works in a bank in Russia. On holidays he arrived to Kiev. Ask him about the banking system in Russia.

b) You have an opportunity to ask some questions to the chairman of the NBU on the straight line. What main questions would you ask him?

¨ READ AND DISCUSS

Дата добавления: 2014-11-29