Ex.10. Read the text, suggest an appropriate title, then prepare a 100- word presentation.

This reading describes the structure and function of retail banks, the services they provide, and the factors to be considered when selecting one. In the United Kingdom retail banks are also known as high street banks.

Retail banks offer a range of services to individual customers and small businesses, rather than to large companies and other banks. The services can include current accounts, savings accounts, investment advice and broking, and loans and mortgages. Retail banks perform two crucial functions for customers: firstly, they enable customers to bank their money securely, access it easily, and conduct transactions; and secondly, they provide access to additional money to fund large purchases, such as buying a home. In return for holding customers’ funds, which they can then invest, banks pay customers interest.

Traditionally, retail banks have provided these services directly to the customer via branches. While many still do this, retail banks now offer their services by telephone and the internet as well. Some operate solely via the internet and do not have facilities to serve customers at physical outlets. Other organizations, such as supermarkets, have now entered the banking sector and also offer a wide range of banking services.

It has become more difficult to identify the traditional retail bank—a bank that funds itself through customer deposits and lending—because retail banks now often combine retail and wholesale banking. It is therefore more relevant to today’s banking structure to regard retail banking as a series of processes rather than as an institution.

The intermediation services offered by retail banks (such as looking after customers’ money and making loans) and the payment services (allowing customers to make transactions using debit cards, checks, etc.) mean that they have to make funds available to customers at very short or immediate notice. This inevitably means that a retail bank has to manage the risk that more money will be requested by customers than it has available and of customers defaulting on loans. Banks do this by holding stocks of liquid assets, maintaining a cushion of capital, lending to different types of borrower, adjusting interest rates, and screening potential borrowers (credit scoring).

 

 

Ex.11. Complete the sentences using your own words:

 

1. The aim of commercial banks is …

2. The way in which a bank is organized and operated is determined …

3. Banks are classified according to …

4. Many banks offer a combination of …

5. The wholesale banking provides …

6. The retail banking provides …

7. Both types of banking have their essential functions which are …

8. It is difficult to identify traditional retail bank because …

9. They make it possible for banks to …

10. Banking is an evolutionary concept because …

11. Commercial banks diversify their services in order to …

 

Ex.12. Do you know what BBA stand for?

Read the text about the British Bankers’ Association and make a short presentation of it in 100 words.

What is the BBA?

The BBA is the leading trade association for the UK banking and financial services sector. They speak for over 200 member banks from 60 countries on the full range of UK and international banking issues.

Theypromote a legislative and regulatory system for banking and financial services - in the UK, Europe and internationally - which takes account of their members’ needs and concerns and provides an effective and competitive market place in which their businesses can prosper.

Theyengage with government, devolved administrations and Europe as well as the media and other key stakeholders to ensure the industry’s voice is heard and to highlight the strength and importance of UK banking.

The BBArepresents over 200 banks. These member banks collectively provide the full range of banking and financial services and make up the world’s largest international banking centre, operating some 150 million accounts and contributing £50 billion annually to the UK economy.

Thfey also represent 45 Professional Associate (PA) member firms. These firms enjoy many benefits of BBA membership, including access to up-to-the-minute information about key industry developments and also the ability to directly contact BBA policy directors should specialist help be required.

The BBA is governed by the Board, which meets 4 times per year and comprises the BBA Chief Executive and the Chief Executives of the largest banks operating in the UK, both retail, wholesale and from overseas. The Board represents the whole of the BBA membership. In addition to this the BBA Council meets twice yearly.

The BBA Board is made up of senior executives from: Barclays Bank plc; BNP Paribas; Citibank NA; Credit Suisse; Deutsche Bank AG; Hampshire Trust plc; HSBC Bank plc; J.P. Morgan Europe Limited; Lloyds Banking Group; Santander UK plc; Standard Chartered Bank; The Royal Bank of Scotland plc.

One of the aims of the association is to communicate their members’ views and to ensure the industry’s messages are accurately and speedily provided to the media. They speak on issues which affect the whole of the banking industry and not individual banks. The BBA provides information to help customers get the most out of their relationship with their bank.

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The BBA aims to provide leadership in developing solutions to the changing face of financial services in the UK. Their subject experts cover the full range of banking issues and work closely with member committees and key external third-parties to co-ordinate the industry’s response to policy initiatives and developments.

The BBA provides value-added industry data in a variety of forms. They collect and publish monthly statistics from the major high street banks setting out the figures for mortgage borrowing, unsecured credit, credit card use and deposits.They gather information for both personal customers and businesses and also produce figures on lending to small and medium sized enterprises (SMEs). The BBA publishes a wide-ranging portfolio of leaflets, books and reports for the banking and financial services industry.

 

 

Ex.13. Task1. Check the meaning of the words in the box in the dictionary and complete the text using these words:

accounts	bank loan	cheque	customers’
current account	debt	depositors	deposits
lend	liabilities	liquidity	optimize
overdraft	salary	spread	standing orders
returns	transfer	wages	withdraw

Commercial banks are businesses that trade in money. They receive and hold (1)..., pay money according to (2)... instructions, (3)... money, etc.

There are few people in Britain who do not have bank (4).... Traditionally, factory workers were paid (5)... in cash on Fridays. Non-manual workers, however, usually receive a monthly (6)... in the form of a cheque or a (7)... paid directly into their bank account.

A (8)... (US: checking account) usually pays little or no interest, but allows the holder to (9)... his or her cash with no restrictions. Deposit accounts (in the US also called time or notice accounts) pay interest. They do not usually provide (10)... (US: check) facilities and notice is often required to withdraw money. (11)... and direct debits are ways of paying regular bills at regular intervals.

Banks offer both loans and overdrafts. A (12)... is a fixed sum of money, lent for a fixed period, on which interest is paid; banks usually require some form of security or guarantee before lending. An (13)... is an arrangement by which a customer can overdraw an account, i.e. run up a debt to an agreed limit; interest on the (14)... is calculated daily.

Banks make a profit from the (15)... or differential between the interest rates they pay on deposits and those they charge on loans. They are also able to lend more money than they receive in deposits because (16)... rarely withdraw all their money at the same time. In order to (17)... the return on their assets (loans), bankers have to find a balance between yield and risk, and (18)... and different maturities, and to match these with their (19)... (deposits). The maturity of a loan is how long it will last; the yield of a loan is its annual (20)... – how much money it pays – expressed as a percentage.

 

Task 2.Read the text again and answer the following questions:

1. What have you learned about different types of accounts offered by banks?

2. What is the difference between a bank loan and an overdraft?

3. How do banks make their profit? What is necessary to optimize it?