Part A: Money and its Functions. The History of Money.

МИНИСТЕРСТВО ОБРАЗОВАНИЯ РЕСПУБЛИКИ БЕЛАРУСЬ

УО «Белорусский государственный экономический университет»

Н.И.Виршиц, Т.В.Платицина

 

 

MONEY and BANKING

ДЕНЬГИ и БАНКОВСКОЕ ДЕЛО

 

 

Минск 2009

Рецензент: старший преподаватель кафедры теории и практики английской речи БГЭУ Л.В.Лопато

 

 

Рекомендовано кафедрой теории и практики английской речи БГЭУ

 

 

Виршиц Н.И., Платицина Т.В.

Деньги и банковское дело = Money and Banking: Электронное учеб.-метод. пособие / Н.И. Виршиц, Т.В. Платицина – Минск: БГЭУ, 2009. – c. 48

 

Учебно-методическое пособие содержит тексты для изучающего и ознакомительного чтения, комплекс упражнений и заданий для формирования англоязычных коммуникативных навыков студентов на материале актуальной, профессионально значимой темы «Деньги и банковское дело». Предназначено для студентов БГЭУ дневной формы обучения.

 

 

Part A: Money and its Functions. The History of Money.

 

GETTING STARTED

 

“Savings is a very fine thing. Especially when your parents have done it for you.”-

Sir Winston Churchill(1874-1965), English statesman, writer, and Prime Minister.

 

1. Scan the extract below to get the gist of it and say why the role of money is so important.

Money is one of the most crucial elements of economic science. It is much more than a passive component of the economic system - a mere tool for facilitating the economy’s operation. When operating properly, the monetary system is the lifeblood of the circular flows of income and expenditure which typify all economies. A well-behaved money system is conducive to both full production and full employment. Conversely, a malfunctioning monetary system can make major contributions to severe fluctuations in the economy’s levels of output, employment, and prices, and can distort the allocation of resources.

USEFUL VOCABULARY

Nouns and noun phrases

 

unit of money - денежная единица

money in cash - наличные деньги; syn: effective money, hard money (Am), cash

paper money - бумажные деньги (банкноты); syn: soft money (Am)

odd money - мелочь, сдача; syn: small coins, change

counterfeit money - фальшивые деньги; syn: false money

commodity money - деньги-товар

money market - финансовый рынок

money order - денежный перевод

money changer - «меняла»

money box - копилка

mortgage – ипотека, заклад; ссуда под недвижимость

payment - плата, платеж, уплата (обычно единовременная)

salary - оклад, зарплата (месячная), salary of an engineer (teacher, manager)

wage(s) – заработная плата (рабочих)

a living wage - прожиточный минимум

fee -гонорар, вознаграждение; a fee of a doctor (lawyer, accountant)

bonus - премия, премиальные; a productivity bonus - премия за продуктивность

fare - плата за проезд

commission - комиссионное вознаграждение; to sell on commission

tip - чаевые

charge - цена, расходы

at any price - любой ценой

debt - долг (денежный), обязательство

rent - арендная плата, квартплата

currency – валюта; hard currency - твердая валюта; convertible currency - конвертируемая валюта

banknote - кредитный билет,банкнот; the face of a banknote; the back of a banknote

coin - монета; silver (gold, bronze) coin

mint -монетный двор, to mint coins - чеканить монеты;mint of money - куча денег

cost - цена, стоимость; cost price – себестоимость; cost of living- прожиточный минимум

value of money - ценность денег, to be of great (little, no) value

the value of a dollar - покупательная способность доллара

measure of value - мера стоимости

standard value — одинаковая стоимость

Adjectives

 

monetary - денежный, монетарный

monetary fund - валютный фонд

moneyed - богатый, денежный человек

reasonable - умеренный, приемлемый, недорогой (о цене)

broke - разоренный

hard up – сильнонуждающийся

well-off - состоятельный, зажиточный

permanent - постоянный, неизменный, долговременный

durable - прочный, надежный, длительный

Verbs and verb phrases

 

to fall/ get/ run into debt - влезть в долг

to settle a debt with smb — выплатить кому-л. долг

to accumulate money - накапливать, копить деньги

to borrow money (from) - брать деньги взаймы

to change money - разменивать деньги

to counterfeit money - подделывать деньги

to donate(to) - дарить, жертвовать; syn: to sponsor

to earn money - зарабатывать деньги

to inherit money - унаследовать деньги

to invest money - вкладывать деньги

to lend money - давать деньги взаймы

to owe money - быть должным

to raise money (for charity) - собирать деньги (на благотворительные цели)

to save (up) money - экономить деньги, собирать, копить; syn: to economize

to spend money (on) - тратить деньги (на)

to waste money - тратить попусту деньги

to steal money - красть деньги

to win money - выиграть деньги

to be short of money – иметь деньги в недостаточном количестве

to state a price - устанавливать цену

to specify a price - точно определять цену

to pay cash - платить наличными

to pay by cheque - расплачиваться чеком

to pay by credit card - расплачиваться кредитной карточкой

to pay in advance - оплатить заранее

to purchase - покупать

to afford - (быть в состоянии) позволить себе

to charge (for) - просить, назначать цену (за услуги, работу)

to rent - арендовать или сдавать внаем

Money and its Functions

medium of exchange -средство обмена; средство обращения (как функция денег)

exchange rate - обменный курс

the exchange rate of rouble against US dollar -обменный курс рубля по отношению к американскому доллару

store of value - средство сбережения, средство образования сокровища; средство «сохранения стоимости» (как функция денег)

account n - 1. расчет, подсчет; 2. счет; запись финансовых опера­ций

unit of account - расчетная единица

to keep an account - вести счет

defer v - откладывать, отсрочивать

deferred payment - отложенный, отсроченный платеж

distinguish v - (smth from smth/ between things) отличать, различать (одну вещь от другой)/ проводить различие (между двумя вещами)

accept v - принимать

barter п - бартер (способ торгов­ли, состоящий в обмене товарами и услугами, без использования денег)

trade v - 1. (in smth with smb / smth. for smth)- торговать чем-л. с кем-л. /

обменивать что-л. на что-л.; trade - n торговля

swap v - (smth for smth) -менять (что-л. на что-л.),(употребляется преимущественно для обозначения бартерных операций)

repay (repaid) v -возвращать (долг)

loan n- заем, ссуда

 

 

READING

Text 1

1. Read the text “The History of Money” and sum up what the text says about

· money in the past

· the way banknotes appeared

· the metals of which coins were and are made

· the silver coins and coppers

 

These days, money is hi-tech. We have notes and coins which are specially made. We use credit cards. Banks and stock exchanges can move millions at the touch of a button. But how did money develop? Where, for example, were notes and coins first produced? Why? What did people use as money before that? Let’s discover the answers to all these questions.

Early forms of Money

In the past most societies used objects as money. Some of these were valuable because they were rare and beautiful – others because they could be eaten or used.

animal skins……..Alaska/Canada/Russia/Scandinavia

beads........ ………Africa/Canada

cattle........ ……….East Africa

cocoa beans ……..Mexico

feathers.... ……….North America

fish hooks ……….Gilbert Islands

grain......... ……….India

knives…………….China

rats ………………Easter Island

salt……………….Nigeria

shells…………….Thailand/Paraguay

stones……………Yap (islands in the Pacific Ocean)

tobacco…………..America

whale teeth ………Fiji

Early forms of money like these were used to buy goods. They were also used to pay for marriages, fines, and debts. But although everyday objects were extremely practical kinds of cash in many ways, they had disadvantages, too. For example, it was difficult to

• measure their value accurately

• divide some of them into a wide range of amounts

• keep some of them for a long time

• use them to make financial plans for the future.

For reasons such as these, some societies began to use another kind of money. This consisted of precious metals which were cut into small pieces and weighed. People in Mesopotamia (now part of Iraq) began doing this about 4,500 years ago. Later, gold and silver money appeared in Ancient Egypt, China and elsewhere, too.

The new metal money was an important advance for four reasons:

1. It was easy to carry

2. It lasted a long time

3. It could be divided into lots of different values

4. It made planning for the future much easier.

But although pieces of silver or gold were an advance, they still weren't exactly coins. They had no fixed shape and weren't clearly marked so that everyone could recognise them.

Notes:

hi-tech - short for high technology, modern, well-designed and sophisticated

fines – sum of money which have to be paid by people who have broken the law

precious – valuable

Early Coins

The ancient kingdom of Lydia was in the country now known as Turkey. That's where the first coins – called staters –were produced around 2,700 years ago. They were made of electrum (a mixture of silver and gold) and had a lion's head stamped on them. This showed that they were official Lydian coins and made them easy to recognise. It also meant that each coin's value was guaranteed, so it didn’t need to be weighed. Not only that – there were lots of different values, too. Lydian people used coins worth one-sixth, one-twenty-fourth and even one-ninety-sixth of a stater.

The idea of a metal money system with... (a) fixed values, (b) a clear identity, was successful. So successful that it soon spread to other countries. By 600 ВС in fact, coins were used all around the Mediterranean region. Greek coins of this period are particularly beautiful. Some are marked with the heads of gods and scenes from ancient myths. Others have pictures of objects or animals on them, such as owls, vases or beetles. These show which part of Greece the coins came from. Athenian 'silver owl' coins, for example, soon became famous all over Europe.

The first king to have his portrait on a coin came from Gгеесе, too. Alexander the Great died in 33 ВС. Coins with his face on them appeared the following year.

Early notes

Today's paper money is produced and controlled by governments through a system of banks. That's why we talk about bank-notes. Originally, though, paper money had nothing to do with banks. It was started by Chinese goldsmiths and silversmiths 1,200 years ago. Why? Well, there were three main reasons.

1. Metal coins were heavy. It was difficult to carry and use large numbers of them.

2. They were easy to steal.

3. China only had limited amounts of precious metals. It couldn't use them all to make coins.

To solve these problems, goldsmiths and silversmiths of the T’ang dynasty (618-907) began to produce special receipts. These were printed notes which showed that their customers owned a certain amount of money. As a result it was possible to do business with paper instead of using metal coins.

The oldest Chinese notes which still survive come from the Ming dynasty (1368-1644). They're made of tree bark and some of them are very large. Take the оnе-kwan note, for example. It measured 22.8cm. x 33cm. and was worth the same as 1,000 copper coins weighing 3.5 kilos.

The introduction of notes like these changed economic history. And not just in China. Paper money soon became popular in Europe, too. For a long time, though, it wasn't made and controlled by governments. In fact the first official European bank notes (issued by the Swedish Stockholm Bank) didn't appear until 1661.

Notes:

BC – short for ‘before Christ’. Before the birth of Jesus

ancestors – members of a family who lived hundreds of years ago

goldsmith – people who make and sell objects made of gold (e.g. coins, jewellery, etc.)

dynasty – a series of leaders who all come from the same family

 

2. Do you think the following statements are true or false? Discuss your answers in pairs.

 

1. The first coins were made in China.

2. The first coins were called staters.

3. The first coins were made around 600 BC.

4. The first coins were made of silver and gold.

5. Salt, tobacco, whale teeth and stones were used as money many years ago.

6. People in Mesopotamia used small pieces of paper as money 4.500 years ago.

7. Early forms of money were used to buy goods.

8. Pieces of silver and gold were clearly marked so that everyone could recognise them.

9. The first paper notes appeared in the ancient Kingdom of Lydia.

10. The first king to have his portrait on a coin came from Ancient Rome.

11. The oldest Chinese notes were made of tree bark and were very large.

12. The ancient kingdom of Lydia was in the country now known as Turkey.

13. China had limited amounts of precious metals; it was one of the main reasons of appearing bank-notes.

14. The Lydia’s coins had a tiger’s head on them.

15. Metal coins were easy to carry and use large numbers of them.

16. Tobacco was used as a form of money in America.

17. Shells were used as a form of money in North America.

18. One of disadvantages of early forms of money was difficulty in measuring their value accurately.

19. The first gold and silver money appeared in Ancient Egypt about 4500 years ago.

20. The first gold and silver money had fixed shape and were clearly marked so that everyone could recognize them.

21. Early forms of money were used to pay for marriages, fines and debts.

Text 2

1. Read the text “Money and its Functions” and say what the main functions of money are.

Money has four functions: a medium of exchange or means of payment, a store of value, a unit of account and a standard of deferred payment. When used as a medium of exchange, money is considered to be distinguished from other assets.

Money as the medium of exchange is believed to be used in one half of almost all exchange. Workers exchange labour for money, people buy or sell goods in exchange for money as well.

People do not accept money to consume it directly but because it can subsequently be used to buy things they wish to consume. To see the advan­tages of a medium of exchange, imagine a barter economy, that is, an econ­omy having no medium of exchange. Goods are traded directly or swapped for other goods. The seller and the buyer eachmust want something the other has to offer. Trading is very expensive. People spend a lot of time and effort finding others with whom they can make swaps. Nowadays, there exist ac­tually no purely barter economies, but economies nearer to or farther from the barter type. The closer is the economy to the barter type, the more waste­ful it is.

Serving as a medium of exchange is presumed to have for centuries been an essential function of money.

The unit of account is the unit in which prices are quoted and accounts are kept. In Britain, for instance, prices are quoted in pounds sterling; in Europe, in еuros. It is usually convenient to use the same unit to measure the medium of exchange as well as to quote prices and keep ac­counts in. However, there may be exceptions. During the rapid German in­flation of 1922-23 when prices in marks were changing very quickly, German shopkeepers found it more convenient to use US dollars as the unit of ac­count. Prices were quoted in dollars though payment was made in marks. The same goes for Russia and other post-communist economies who used the US dollar as a unit of account, keeping their national currencies as means of actual payment. The higher is the inflation rate, the greater is the probability of introducing a temporary unit of account alongside the existing units for measuring medium of exchange.

Money is a store of value, for it can be used to make purchases in future. For money to be accepted in exchange, it has to be a store of value. Unless suitable for buying goods with tomorrow, money will not be accepted as payments for the goods supplied today. But money is neither the only nor necessarily the best store of value. Houses, stamp collections, and interest-bearing bank accounts all serve as stores of value.

Finally, money serves as a standard of deferred payment or a unit of account over time. When money is borrowed, the amount to be repaid next year is measured in units of national currency, pounds of sterling for the United Kingdom, for example. Although convenient, this is not an essential function of money. UK citizens can get bank loans specifying in dollars the amount that must be repaid next year.

Thus, the key feature of money is its use as a medium of exchange. For money to be used successfully as a means of exchange, it must be a store of value as well. And it is usually, though not always, convenient to make money the unit of account and standard of deferred payment.

Notes:

1. to quote — регистрировать, называть

2. the same goes for... — то же самое относится к...

 

2. Scan the text again to answer the following questions:

 

1. What are the main functions of money?

2. How important is the function of money as a medium of exchange?

3. Why do people accept money as a medium of exchange?

4. What is a barter economy?

5. Why are barter economies wasteful?

6. When don't national currencies serve as units of account? Give examples.

7. When is money used as a standard of deferred payment?

3. Match two halves of the sentences:

1. Classical economists considered money to be no more 2. Money is an asset 3. Money is used as a standard of de­ferred payment, 4. Loans provided by commercial banks, building societies, etc. 5. In addition to being a means of exchange money is also 6. Swap in a money market is a pro­cess 7. Exchange rate is 8. GNPs are measured in the coun­try's local monetary unit, 9. The foreign exchange market is a market where foreign currencies are sold and bought 10. Barter is a method of trading goods and services for other goods and services

a. either through private exchange dealers or a country's central bank. b. known to be a means of measuring the value of men's labour. c. of exchanging one kind of finan­cial asset or liability for another. d. than a medium of exchange. e. or currency. f. for it is an accepted measure of future payments in contracts. g. without the use of money. h. the price of one currency in terms of some other currency, for in­stance, the price at which dollars might be exchanged for pounds. i. are an essential source of money for everyday consumption and purchase of personal and business assets. j. that is accepted as a means of payment.

 

 

DEVELOPING VOCABULARY

1. Match the words with their definitions:

a) cash machine coin loan mortgage note salary tax

1______________A piece of paper money.

2______________A piece of money made of metal.

3______________Money a person gets for the work he / she does.

4______________Money that you pay to the government.

5______________Money that somebody (or a bank) lends you.

6______________Money that you borrow from a bank to buy a house.

7______________A machine inside or outside a bank where you can get money.

b) fees, bonus, taxes, wages, salary, rent, pension, fare, cash, change

1) money paid for a place to live

2) money paid to the government

3) money paid for the professional services

4) money in coins and notes, not cheques

5) money paid to workers by an hour’s or a week’s work

6) money paid as an extra payment to one's salary

7) money paid to workers for a month's or year's work

8) money paid to older people who no longer work

9) money returned to you after you pay too much

10) money paid for a journey by bus, train or plane

c) to save, to waste, to earn, to accumulate, to sponsor, to pay, to afford, to charge

1) to keep from being spent, lost or wasted

2) to ask for some money as a price for something done

3) to use without benefit or return

4) to receive as recompense for work

5) to make something grow into a mass

6) to give money for something

7) to donate money to

8) to have enough money for something

2. Find the closest synonym for the word combinations on the left selecting it from the right column.

 

1. a lot of money cost of living

2. monetary unit to buy

3. paper money a great deal of money

4. little money money in cash

5. a living wage to accumulate money

6. effective money a unit of money

7. false money soft money

8. to donate money counterfeit money

9. to save up money a small amount of money

10. purchase to sponsor

3. Match the words / expressions on the left with their opposites on the right.

 

1. profit to lend money

2. worth the back of a banknote

3. hard up expensive goods

4. to save up money to buy goods

5. the face of a banknote valueless things

6. to borrow money to find money

7. moneyed person to waste money

8. cheap goods well off

9. to lose money worthless

10. valuable things loss

11.to sell goods moneyless person

4. Use the following words to complete the sentences below:

DISCOVERING LANGUAGE

1. Fill in the missing prepositions to the following sentences:

1. I paid… the dinner last night.

2. When can you pay me… the money I lent you?

3. Would you like to pay… cash or… credit card?

4. I spent?50… books yesterday.

5. I don't like lending money… friends.

6. I borrowed a lot of money… the bank.

7. They charged us?60… a bottle of wine.

8. All bank-notes and coins must be accepted… their full nominal value without restriction.

9. Bank-note paper can easily be distinguished …ordinary paper.

10. We know a great variety … commodities to have been usedat one time or another as a medium of exchange.

11. Cheques and credit cards are known tohave becomemore popular … re­cent years than paper money and coins.

12. New technologies are said to haveallowedpeople with bank accounts to pay … their purchases in shops through videotext TV.

13. The Moscow Interbank Currency Exchange is known to have provideda basis for determining the exchange rate … rouble … other currencies in the 1990s.

14. Russia's gold reserves were reported to be constantly falling …the early 1990s.

2. Complete the sentences with the verbs given below in the correct tense.

LISTENING

1. You are going to watch an episode "Money, Currency, Banknotes” of the video film ” Economics made easy ”. Here are some words that might seem unfamiliar to you:

 

• tender -средство платежа, legal tender -законное платежное средство

• minter - чеканщик, монетный мастер; mint of money -куча денег

• shopkeeper - лавочник

• currency - деньги, валюта, средство обращения

• rate -курс, цена; at the rate of - в размере, по курсу; foreign exchange rate - курс иностранной валюты

• revalue -переоценивать, повышать стоимость; revaluation - повышение стоимости, ревальвация

2. As you watch the episode, note down some words and terms you'll hear and be ready to answer the following questions:

1. What kind of old money is mentioned in the text?

2. Does the shopkeeper accept a coin from the buyer?

3. Is this old coin a legal tender? What is the legal tender?

4. What types of currencies were shown in the episode? What is the currency of Germany nowadays?

5. What will a man do if he wants to buy a car, coming from another country?

6. Is the situation different when in one of the countries too much money is printed?

7. What does the term revaluation mean? By whom is this currency exchange normally provided?

 

FOCUS ON FUNCTIONS

1. Study the language of Money and Currencies:

· In Great Britain the currency used is the pound sterling. (£)

In the USA (and many other countries) the currency is the dollar. ($)

£1 = 100 pence (p): $1 = 100 cents (¢)

Note that the sign goes before the figure.

· When speaking about sums of money we say:

$1.35 - a dollar thirty five (or one thirty five)

$3,000 - three thousand dollars

five cent coins - nickels

ten cent coins - dimes

twenty-five cent coins - quarters

fifty cent coins - half dollars

50p - fifty p, fifty pence (not * pences)

£ 1.99 - one (pound) ninety nine

Note that we do not add 'and' between the figures representing pounds/dollars and pence/cents.

Nor do we mix figures and words; the following are wrong:

Not * £ 39 ninety nine £ Twenty five 457 dollars

· The separation of units of a thousand can be made by using a comma (,) or with a blank:

$ 365,027,968.80 = three hundred and sixty five million twenty seven thousand

nine hundred and sixty eight dollars eighty cents.

· A sum of money is used with a verb in the singular:

These days £50,000 is not a large sum of money.

Why was US $115.69 paid in addition to the ocean freight?

· It is now common to see the abbreviation K. (а hundred thousand dollars)

$ 100K (a hundred thousand dollars)

· Countries using dollars include:

USA Australia Canada Hong Kong New Zealand Singapore Taiwan

· Countries using pounds include:

UK Ireland Egypt Malta

· Countries using euro include:

Germany France Spain Belgium Switzerland Luxemburg etc.

2. Write these out as you would say them.

1. $ 1.45

2. £ 8.50

3. $ 199,000

4. £ 352.29

5. $75.50

6. £225,000,000

7. 89 p

8. $354.50

3. A British tour operator has costed a package holiday in Spain at £650. This calculation is based on £1 = 200 pesetas. However, as a result of a recent fluctuation in the exchange rate £1 now equals 190 pesetas.

· How much will the tour operator want to charge?

4. US firm agrees to purchase pharmaceutical products from West German supplier for?100,000, payment to be made 90 days after delivery. On the day of the agreement the exchange rate was $ 1 =? 0.76. Over the next 90 days the dollar falls to $1 =0.67.

· How much will the American firm have to pay?

SPEAKING

1. Write down the approximate price of six things in your country, e.g. daily newspaper, a short bus journey, a cup of coffee in a bar / cafe, a ticket for the cinema, a takeaway hamburger, a pair of jeans, etc. Do you think the price is expensive, reasonable or cheap? Compare your answers with someone from the same city, and if possible, someone from a different country.

2. Work in pairs. Discuss the following questions:

a. There are lots of different ways you can get money. Here are five: earn it, steal it, win it, inherit it, find it

Of these five, which are the most common?

b. There are also lots of things you can do with money. Here are six: spend it, give it away, invest it, save it, waste it

Of these six, which give you the most pleasure and happiness? Put them in order.

3. Interview each other with the questionnaire. Ask for more information.

e.g. -Have you ever wasted money on something you've never used?

-Yes, I bought an exercise bike.

-Why did you buy it?

The Money Questionnaire

Have you ever…?

(waste) money on something you've never used

(sell) anything on the Internet

(lose) a credit card or your wallet

(save) for something for a long time

(win) any money (e.g. in a lottery)

(be) robbed

(lend) money to someone who didn't pay you back

Have you…recently?

(buy) anything on the Internet

(be) to a shopping mall or a shopping centre

(buy) anyone a present

(use) a credit card

(take) money out of a cash machine

(borrow) money from someone in your family

 

4. British students spend their money on different things. Here are three of them: Susanne, Charlie and Matthew. Read the information and conduct a survey among your friends to see what Belarusian students spend their money on.

Susanne has been getting £10 every week from pocket money, presents a small weekend job. Charlie's been getting £12 - most of it from a weekend job. Matthew has been getting £4 pocket money.

Susanne: I don't spend anything on alcohol or cigarettes because I don't smoke or drink. I usually spend about £1.00 on make up and I put £2.50 toward to holiday. I love horse-riding and I go on a riding holiday each summer with a friend, go on holiday with my family too but they pay for it. The riding is an extra holiday so I pay for it myself. I spend about £3.50 when I go out to the cinema or the sport center. It's difficult to find something cheap to do at the weekend! I buy a CD every two weeks - they cost £6.00.

Charlie: My holiday is football - I play in a team and I go to watch big football matches; it costs about £2.50 a week. I usually spend something on clothes about £3.00 and I like to buy a CD every week. If I'm lucky I save something usually about 50p a week!

Matthew: I don't save anything. I spend everything on going out. My parents buy my clothes and pay for holidays and everything like that. I don't smoke or drink.

5. Think and share your impressions with your partner:

· Why are goods actually more expensive if the means of payment are different from the units of account?

· What measures can a seller take if money does not fulfill its function as a store of value properly?

WRITING

1. You have received a letter from your foreign friend. Write a reply to him answering all his questions.

 

1. What do you spend your money on?

2. How much does a doctor (teacher) earn in your country?

3. Do you save any money? If so, how (in a bank, cash)?

4. Is it easy to open a bank account in your country? How much do you need to start?

5. Do you owe money? Who to? When will you pay back the money?

6. Is there anything you want to do but can't afford doing?

7. Do you often lend money? Who do you lend it to?

8. Do you often borrow money? Who do you borrow it from?

9. Are you in debt/broke/hard-up/ or well-off?

10. How much do you need to make ends meet?

11. Do people in your country receive a state pension when they are old?

12. What bills do you have to pay?

13. How much pocket money did you receive when you were a pupil?

14. In your country, what percentage of a person's income is taken in taxes?

2. Write an essay on the topic ‘My attitude to money’. Which of these sentences best describe your attitude to money?

· All I want is enough money to enjoy life.

· Money is very important to me. I’d like to earn as much as possible.

· I would be happy to live with less money and fewer possessions.

GETTING STARTED

1. Do the quiz individually. Then compare answers with a partner.

1) How much cash do you have with you at the moment? Do you:

a) know exactly?

b) know approximately?

c) not know at all?

2) Do you normally check:

a) your change?

b) your bank statements and credit card bills?

c) restaurant bills?

d) your receipts when shopping?

e) prices in several shops before you buy something?

3) Do you:

a) give money to beggars?

b) give money to charities?

c) give away used items, such as clothing?

4) If you go for a meal with someone you don't know well, do you:

a) offer to pay the whole bill?

b) suggest dividing the bill into equal parts?

c) offer to pay the whole bill but expect them to pay next time?

d) try to avoid paying anything?

5) What do you think about people who do not pay the correct amount of tax? Is this:

a) a serious crime?

b) morally wrong but not a crime?

c) excellent business practice?

6) If you lend a colleague a small amount of money and they forget to pay it back, do you:

a) say nothing?

b) remind them that they owe you money?

c) arrange to go for a drink with them and say you've forgottenyour wallet or purse?

 

2. Write one more question to add to the quiz above. Ask a partner to answer it.

Discuss your answers to the quiz. What do they say about your attitude to money? What do they say about your culture?

USEFUL VOCABULARY

bank account - банковский счет

bank operation - банковская операция

savings account - сберегательный счет

current account - текущий счет

checking account - чековый счет

statement of account - выписка с банковского счета

holder of an account - владелец счета

open an account (at a bank) - открыть счет (в банке)

withdraw money from an account - снять деньги со счета; syn: to take out money

cash a check - получить по чеку наличными

transaction charge - плата за банковскую операцию

service charge - плата за банковские услуги

banking card - карточка для банковского автомата; syn: bank card, cash card

bank machine - банковский автомат

credit card - кредитная карточка

interest n - ссудный процент; to pay interest - платить проценты; rate of interest - процентная ставка

traveler's cheque - путевой (дорожный) чек

deposit - вклад в банке; депо­зит

deposit money in an account - положить деньги на счет; syn: to credit money to an account, to pay money into an account

to issue a deposit - открывать счет

to withdraw (withdrew, withdrawn) a deposit - изы­мать вклад; отозвать вклад,

взять вклад из банка

time deposit -срочный вклад; syn. demand deposit

sight deposit – счет до востребования, текущий счет; syn. chequing account – чековый вклад (депозит); syn. current account -текущий счет

to write a cheque against deposit / an account -выписывать чек противсчета deposit v - класть в банк, депонировать, отдавать на хранение

to deposit money with / in a bank — положить деньги в банк

liability n- обязательство; pl. долги; денежные обязательства; задолженность

to meet one's liabilities – покрыть свою задолженность

clearing n - клиринг; безналичные расчеты между банками

clearance n - производство расчетов через расчетную палату; оплата долга; урегулирование претензий

to handlе /to make / to undertake a transaction -производить сделку

net a - чистый; нетто; без вычетов; сальдо; окончательный;

to cash a cheque -получать наличные по чеку

short-term a – краткосрочный; ant. l ong-term a - долгосрочный (заем)

interest n - ссудный процент

interest-earning / interest-bearing а – приносящий проценты (доход)

bill n - вексель, тратта; Bill of Exchange (B/E) - переводной вексель; Bill of Loading (B/L) - коносамент, транспортная накладная

government securities — государственные ценные бумаги

bond n – облигации; долговое обязательство

share n - акция; пай

stock n – акция; pl.облигации; ценные бумаги; stock exchangе – фондовая биржа

fluctuate v - колебаться, fluctuation n- колебание

READING

Text 1

1. Scan through the text “Bank and its classes”.

A bank - is an institution that deals in money and its substitutes and provides other financial services. Banks accept deposits and make loans and derive a profit from the dif­ference in the interest rates. They also have the power to create money. The two major classes of banks are commercial and central banks. Commercial banks accept savings deposits, make loans and other investments, and offer financial services that facilitate the exchange of funds among individuals and institu­tions. In addition to the profit derived from the difference in the interest rates, commercial banks charge fees for various ser­vices. Central banks are involved in the issue of money and maintain the country's foreign currency reserves. Central banks maintain the accounts of other banks and supervise their activi­ties. Central banks act as bankers to governments, as the de­signers of monetary and credit policies, and as lenders of last resort to commercial banks in the case of a financial crisis. Cen­tral banks also play a significant psychological role as guaran­tors of the monetary system. Central banks may be nationalised organisations and are subject to government control, but some of them can have independence from governmental supervision.

Notes:

de­rive a profit - извлекать прибыль;

savings deposit -сберегательный вклад на неопределенный срок под процент;

issue - эмиссия;

lender of last resort - последний кредитор в критической ситуации

subject to – подчинять, подвергать(воздействию, влиянию и т.п.)

2. Restore the word order in the questions and answer them.

1) What meant by the term "bank" is? 2) What banks do accept? 3) What banks make do? 4) What banks derive a profit do from? 5) What do power banks have? 6) What the two major classes of are banks? 7) What commercial banks accept do? 8) What do make commercial banks? 9) What commercial banks offer do? 10) What central banks are involved in? 11What central banks do maintain? 12) What central banks supervise do? 13) What central banks do act as? 14) What role central banks do play? 15) Are subject to central banks govern­ment control or not?

3. Agree or disagree to the following statements.

1) A bank trades in money. 2) A bank gives various financial ser­vices. 3) Banks receive deposits. 4) Banks don't make loans. 5) Banks derive a profit by skilfully deceiving people. 6) Com­mercial banks aid the exchange of funds among individuals and institutions. 7) Central banks act as bankers to organized crime. 8) Central banks act as the designers of default. 9) Central banks act as the designers of foreign policy.

10) Central banks act as lenders of last resort to counterfeiters. 11) Central banks play an important role as guarantors of the monetary system. 12) Central banks have the right to issue money. 13) Central banks keep the country's foreign currency reserves. 14) Central banks back up the accounts of other banks. 15) Central banks oversee the activities of other banks. 16) Central banks may be privately owned organisations.

17) Central banks are subject to shadow ministers. 18) Central banks are totally dependent on their bank customers.

Text 2

1. Read the text “ Introduction to Banking and Financial Markets ” and find the information to answer the questions:

- What are cash assets?

- What does the balance sheet of a bank include?

A commercial bank borrows money from the public, crediting them with a deposit. The deposit is a liability of the bank. It is the money owed to depos­itors. In turn the bank lends money to firms, households, or governments wishing to borrow.

Commercial banks are financial intermediaries with a government license to make loans and issue deposits, including deposits against which cheques can be written¹.

Major important banks in most countries are included in the clearing sys­tem in which debts between banks are settled by adding up all the transac­tions in a given period and paying only the net amounts needed to balance inter-bank accounts².

The balance sheet of a bank includes assets and liabilities. We begin by discussing the asset side of the balance sheet.

Cash assets are notes and coins kept in their vaults and deposited with the Central Bank. The balance sheet also shows money lent out or used to pur­chase short-term interest-earning assets such as loans and bills. Bills are fi­nancial assets to be repurchased by the original borrower within a year or less. Loans refer to lending to households and firms and are to be repaid by a cer­tain date. Loans appear to be the major share of bank lending. Securities show bank purchases of interest-bearing long-term financial assets. These can be government bonds or industrial shares. Since these assets are traded daily on the Stock Exchange, these securities seem to be easy to cash whenever the bank wishes, though their price fluctuates from day to day.

We now examine the liability side of the balance sheet which includes, mainly, deposits. The two most important kinds of deposits are sure to be sight deposits and time deposits. Sight deposits can be withdrawn on sight³ whenever the depositor wishes. These are the accounts against which we write cheques, thus withdrawing money without giving the bank any warning. Therefore, most banks do not pay interest on sight deposits, or chequing accounts.

Before time deposits can be withdrawn, a minimum period of notification must be given within which banks can sell off some of their high-interest se­curities or call in some of their high-interest loans in order to have the money to pay out depositors. Therefore, banks usually pay interest on time deposits. Apart from deposits banks usually have some other liabilities as, for instance, deposits in foreign currency, cheques in the process of clearance and others.

Notes:

1. to write cheques against the account – выписывать чеки против счета

2. to balance an account – уравнять, погасить счет; сбалансировать статьи расходов

3. on sight– по предъявлении (без предварительного уведомления)

2. Complete the sentences according to the text:

1.Banks borrow money from the public in order to...

2.The clearing system lets banks...

3.The asset side of the bank balance sheet includes...

4.The liability side of the balance sheet includes...

5.The two most important kinds of deposits are known as...

6.Cheques can be written against...

7.Interest is usually paid on...

8.To withdraw a time deposit one must give the bank a period of notifica­tion for the bank...

Text 3

1. Scan through the text “Credit card and credit cardholders”.

A credit card is a piece of plastic about 85mm by 54mm, bearing the name and computer number of the holder and the period of availability. The holder must sign it. The best known cards in the UK are the VISA card and ACCESS; the American Express and Diners' Club (intro­duced by the Diners' Club, Inc., in 1950) are leisure or enter­tainment cards as no credit is permitted. VISA is an interna­tional credit card scheme which has worldwide representation. Major banks in a number of countries have issued cards through VISA. ACCESS is the name given to a credit card company jointly owned by three banks, namely, Lloyds, Midland and National Westminster.

The American Express Company issues American Express card whose holders have no limit placed on the sum they spend, but all outstanding debts must be settled by a given date. Any creditworthy mature person can be a credit card holder. Before a card is issued, certain details are supplied and references are given. On approval a credit card is given to the holder and the cardholder is at the same time notified of the maximum credit available to him / her. The credit card can be used at any retail outlet displaying the credit card company symbol. It is usual for settlement or partial settlement to be made by the credit cardholder within 25 days of receipt of the statement.

Notes:

availability - годность

access - доступ

outstanding - неупла­ченный

retail outlet - розничная торговая точка

settlement - расчет

receipt - получение

statement – отчет

reference (a letter written by someone who knows you well, usually to a new employer, giving information about you)- рекомендация

2. Work in pairs to answer the questions that follow.

1) What does a credit card bear?

2) What must the holder sign?

3) What credit cards are the best known ones in the UK?

4) What credit cards are leisure cards and why?

5) What are VISA, ACCESS and American Express cards known for?

6) Who can be a credit card holder?

7) What is supplied and given before a card is issued?

8) What is the cardholder notified of?

9) Where can a credit card be used?

10) What is to be made by the cardholder within 25 days of the receipt of the

statement?

 

3. Agree or disagree to the following statements.

1)A credit card is a piece of wood.

2) A credit card bears the name of the owner.

3) A credit card bears the computer number оf the possessor.

4) A credit card bears the period of serviceable life.

5) The holder must subscribe to a credit card.

6) Holders have limit placed on the sum they can spend.

7) All debts must be settled by a given date.

7) Any solvent person can be a credit card holder.

8) Recommendations are to be given before a card is issued.

9) The cardholder is announced of the minimum сredit available to him.

10) A credit card can be used far and near.

11)A retailer is someone who sells things in a shop.

 

4. Complete the following statements.

1) A credit card is... 2) A credit card bears... 3) The holder must… 4) The best known cards in the UK are... 5) VISA is... 6)ACCESS is... 7) American Express card is known for its holders have... 8) Any creditworthy person can... 9) Before a card is issued... 10) The cardholder is notified of... 11) A credit card can be used... 12) The credit cardholder should make... within 25 days...

5. Translate the following text from Russian into English.

Кредитная карточка - это выпускаемая организацией кар­точка, которая даёт её владельцу возможность делать по­купки в кредит в тех предприятиях торговли, которые за­ключили с данной организацией соглашение (например, кредитная карта «Эксон» может использоваться на автозаправочных станциях). Существуют одноцелевые карточки, выпускаемые конкретными фирмами, многоцелевые кар ­ точки (например, «Америкен экспресс», «Карт-бланш») и банковские карточки (например, «Мастеркард» и «Виза»). Владелец карточки - это лицо, которому выдана кредитная карта для использования в личных, семейных, домашних или коммерческих расчётах.

Text 4

Text 5

1. Read the text ”Counterfeiting”. Sum up what the text says about the security features of American banknotes.

 

Counterfeiting of money is one of the oldest crimes in history. In the United States, for example, it was a serious problem in the past, when each bank issued its own currency. Therefore they adopted a national currency in 1863. But it did not solve the counterfeiting problem. The national currency, or the dollar, was soon counterfeited so widely, that it became necessary for the US Government to take special measures. In 1865 the United States Secret Service was established to suppress counterfeiting. It curtailed counterfeiting to a certain extent but this crime still exists.

The US dollars are now the most counterfeited currency in the world. Modern photographic and printing devices, colour copies, laser scanners have made the production of counterfeit money relatively easy. A lot of special security features are usually used in making banknotes of every country.

In making American dollars, for example, the following security features are used:

- red and blue fibres, embedded in the paper

- the intaglio printing of some features and many others.

Besides, not long ago, a few more new security features were added to US dollars. These features are as follows:

- invisible thread embedded in the paper

- micro printing and others.

These new features appeared first in banknotes of certain denominations only. Other denominations will be gradually made with the same security features.

Notes:

curtail - сокращать, урезывать

embed - запечатлеть

intaglio printing - глубокая печать

thread - нить

2. Complete the sentences with the following words: crime(s), currency, counterfeiting, established, features.

 

1)… of money is one of oldest... in history.

2) Thеу adopted a national... in 1863.

3) In 1865 the United States Secret Service was... to suppress...

4) It curtailed … to a certain extent but this... still exists.

5) The US dollar is now the most counterfeited... in the world.

6) New security... is added to the dollar from time to time.

 

3. Give the English equivalents for the following:

метод защиты, глубокая печать; волокна, вкрапленные в бумагу; невидимая нить, микропечать, современные ксероксы, цветные принтеры, лазерный сканер, подделывать деньги, средства защиты денег, национальная валюта

Text 6

1. Scan through the text “ Money laundering”.

 

Criminals use the financial system to put money which has been obtained illegally into legal business and bank accounts, so that they can hide it or use it. These activities are commonly referred to as money laundering. In January 1989 the Basle Statement of Principles on Money Laundering was circulated to all institutions authorised under the Banking Act. The Statement of Principles does not restrict itself to drug related money laundering, but extends to all aspects of laundering through the banking system, i.e. the deposit, transfer and / or concealment of money derived from illicit activities whether robbery, terrorism, fraud or drugs. The Statement of Principles seeks to deny to those who involved money laundering by the application of the following principles:

(a) Know your customer - banks should make reasonable efforts to determine the customer's true identity, and have effective procedures for verifying the bona fides of new customers, that is, they are who they say they are.

(b) Compliance with laws - banks should ensure that business is conducted in conformity with high ethical standards and laws; that a servic