The banking system of Ukraine

XIV. The following are some of the more obvious and important differences in terminology between British and American English in the area of finance.

British	American
Annual General Meeting (AGM)	Annual Stockholders Meeting
Articles of Association	Bylaws
authorized share capital	authorized capital stock
barometer stock	bellwether stock
base rate	prime rate
bonus or scrip or capitalization issue	stock dividend or stock split
bridging loan	bridge loan
building society	savings and loan association or "thrift"
cheque	check
company	corporation
creditors	accounts payable
current account	checking account
debtors	accounts receivable
gilts or gilt-edged stock	Treasury bonds
labour	labor
Memorandum of Association	Certificate of Incorporation
merchant bank	investment bank
ordinary share	common stock
overheads	overhead
profit and loss account	income statement
property	real estate
quoted company	listed company
retail price index (RPI)	consumer price index (CPI)
share	stock
share premium	paid-in surplus
shareholder	stockholder
shareholders' equity	stockholders' equity
stock	inventory
trade union	labor union
unit trusts	mutual funds
visible trade	merchandise trade

XV. Speak on the following topics:

a) Current account.

b) Deposit account.

c) Taking money out of the current account.

d) Taking money out of the deposit account.

e) Deposit accounts and a good form of investment.

Unit VII

Text A

STRUCTURE OF THE BANKING SYSTEM OF UKRAINE

The evolution of the national banking system in Ukraine started in March, 1991, after the adoption of the Law of Ukraine "On Banks and Banking" by the Ukrainian Verhovna Rada. The Ukrainian banking system is a two-tier structure consisting of the National Bank of Ukraine and commercial banks of various types and forms of ownership including the state-owned Export-Import Bank and a specialized commercial Savings Bank.

The National Bank of Ukraine serves as the country's central bank which pursues a uniform state monetary policy to ensure the national currency stability.

Commercial banks are formed as joint-stock companies or as companies on an equal footing with both legal and natural persons involved. The range of commercial banks activities includes: receiving deposits of enterprizes, institutions and households, crediting of economic entities and households, investments in securities, formation of cash balance and reserves, as well as other assets, cash and settlement servicing of the economy, foreign exchange operations and other services to natural persons and legal bodies.

The banks act in accordance with the Constitution of Ukraine, the Law of Ukraine "On the National Bank of Ukraine", "On Banks and Banking", the Ukrainian legislation on joint-stock companies and other economic entities, as well as with the normative regulations of the National Bank of Ukraine and their Statutes.

According to the data available as of 1st of January, 2003, 182 commercial banks were registered in Ukraine. 20 banks out of this number have foreign capital share (7 banks having a 100 % foreign capital). 157 banks are actually functioning in Ukraine with a total authorized capital of UAH 6.003 billion. The authorized capital per one bank amounts to UAH 38.2 million.

The major banks are Prominvestbank, the "Privat" Bank, the Export-Import Bank, "Aval", the Savings Bank of Ukraine and Ukrsotsbank.

Five of the commercial banks are the former specialised state banks: one is a savings bank (Oschadnybank), two are specialised lending banks (Prominvestbank and Ukrsotsbank), and one is the Export-Import Bank of Ukraine (Ukreximbank). Oschadnybank and Ukreximbank are still state owned. Prominvestbank and Ukrsotsbank receive concessionary treatment from the NBU and are responsible for the vast majority of corporate lending. There are also 'new banks'. Most of these are based in the major industrial centres. They were generally formed by groups of companies to manage their treasury and payment systems. Some of these banks have grown significantly (e.g. Pravexbank, Privatbank and Aval). There are currently six main banking companies in Ukraine with foreign ownership: Credit Lyonnais, Citibank, Bank Austria Creditanstalt, ING, Raiffeisenbank and First Ukrainian International Bank.

Notwithstanding the banking sector's difficulties, the procedures for settlements, particularly relating to domestic transfers, have proven efficient. Foreign investors no longer encounter delays in converting currency and remitting profits in foreign currency as a result of the banking system.

Numerous Ukrainian commercial banks have joined the Society for Worldwide Interbank Financial Telecommunications (SWIFT). SWIFT provides financial data communication and processing services supporting the business activities of banks around the world. Participating Ukrainian banks can instantly settle transactions with other banks on-line with SWIFT. Western Union also has a funds transfer service between Ukraine and other countries. Currently the banking system of Ukraine is demonstrating signs of stabilisation after the 1998 financial crisis (following on from that in Russia). Since January 1999 the NBU has decreased its prime rate from 82% to 15%.

Starting from January 1, 1998, the banking system of Ukraine has transfered to the international accounting and statistics standards.

I. Key terms:

Settlement	- розрахунок - payment of an obligation, e.g. payment in cash for securities;
Authorised capital	- статутний фонд - the amount of share capital fixed in the memorandum of association of a company as required by the company acts. US = authorized capital stock.

II. Answer the following questions:

1. Describe the structure of the Ukrainian banking system.

2. What are the forms of ownership of commercial banks?

3. Name the range of commercial banks activities.

4. What is the legislative basis of commercial banks in Ukraine?

5. Name the main banking companies with foreign ownership in Ukraine.

6. What is the role of SWIFT for numerous Ukrainian commercial banks that have joined it?

III. Study the following information:

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