ТОП 10:

BANKING. CENTRAL BANKING. EXCHANGE RATES.



Money is a means of payment or medium of exchange. It also serves as a standart of value, a unit of account, a store of value and as standart of different payment. Money as or medium of exchange is used in one-half of almost all exchange. Workers exchange labour service for money. People buy and sell goods in exchange for money. A barter economy has no medium of exchange. Goods are traded directly or swapped for other goods. In a barter economy, the seller and the buyer each must want something the other has to offer. Each person is simultaneously a seller and a buyer. In order to see a film, you must hand over in exchange a good or service that the cinema manager wants. There has to be a double coincidence of wants.

Kinds of money: In prisoner-of-war camps, cigarettes served as money. In the 19th century money was mainly gold and silver coins. These are examples of commodity money (деньги, представленные каким-л. товаром и имеющие реальную внутреннюю стоимость; являются товаром сами по себе, в отличие от бумажных денег, разменных на какой-л. товар; напр., золотые или серебряные деньги, соль, мех, скот) ordinary goods with industrial uses (gold) and consumption (потребление) uses (cigarettes), which also serve as a medium of exchange. A token money (денежные знаки) is a means of payment whose value or purchasing power as money greatly exceeds its cost of production or value in uses other than as money. An IOU money is a medium of exchange based on the debt of a private firm or individual. A bank deposit is IOU money because it is a debt of the bank.

There were the times when people use gold or gold bullion as money. Those were dangerous times, and people wanted a safe place to keep their gold. So they deposited it with goldsmiths,people who worked with gold fox jewelleryand so on and also had a guarded vaultto keep it safe in. And when people wanted some of their gold to pay for things with, they went and fetchedit from the goldsmith. Two developments turned these goldsmiths into bankers. The first was that people found it a lot easier to give the seller a letter than it was to fetch some gold and then physically hand it over to him. This letter transferredsome of the gold they had at the goldsmith's to the seller. This letter we would nowadays call a cheque. And, of course, once these letters or cheques, beeame acceptable as a way of paying for goods,people felt that the gold they had deposited with the goldsmith, was just as good as gold in their own pockets. And as letters or cheques, were easier to carry around than gold, and a lot less dangerous, people started to say that their money holdingswere what they had with them plus their deposits. So a system of deposits was started. The second development was that goldsmiths realized they had a great deal of unused gold lying in their vaults doing nothing. This development was actually of greater importance than the first.

There are two kinds of deposits: sight deposits and time deposits. Whereas sight deposits can be withdrawn on sight whenever the depositor wishes, a minimum period of notification must be given before time deposits can be withdrawn.

Nowadays banks are closely concerned with the flow of money into and out of the economy. They often cooperate with government in efforts to stabilize economies and to prevent inflation. They are spesialists in the business of providing capital and allocating funds and credit. They are financial intermediaries or institutions that specialized in bringing lenders and borrowwers together.

The reserve ratiois the ratio of reserves to deposits.A run on the bank is a financial panic, leads to exactly what people fear, the bank cannot pay them, goes bankrupt, and they go bankrupt as well.

Different types of banks: Commercial banks are the businesses that trade in money. They receive and hold deposits in current and saving accounts, pay money according to customers’ instructions, lend money, and investment advice, foreign exchange facilities, and so on. Investment banks:raise funds for industry on the variouse financial market; finance international trade; issue and underwrite securities; deal with takeovers and mwergers; issue government bonds; make a profit from the fees and commision. Universal banks:combining deposit and loan banking with share and bond dealing and investment services.Central banks: set interest rates; print money or destroy it; control the money supply; do open market operations, which are simply buying and selling government bonds to and from commercial banks.; do the exchange rate supervision.; act as a lender of last resort. Foreign bank: largerly doing Eurocurrency business. Eurocurrency is any currency held outside its country of origin.

Modern bank services: overdraft – an arrangment by which a customer can withdraw more from a bank account than has been deposit in it, up to an agreement limit; credit card - a card which guarantees payment for goods and services purchased by the cardholder, who pays back or finance company at a later date; cash card – a plastic card issued to bank customers for use in cash dispenser; homebanking – doing banking transactions by telephone or personal computer; and ets.

EXCHANGE RATES

An exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency.

The Bretton Wood agreement of 1944 established fixed exchange rates. Defined in terms of gold and the US dollar. Main features of the Bretton Wood system are:

1) Currencies were pegged against the US dollar (US dollar was a promissory note issued by the United States Treasury)

2) Gold convertibility. $35 could be could be exchanged for one ounce of gold.

3) Overvalued or undervalued currencies could only be adjusted with the agreement of the International Monetary Fund, Such adjustments are called devaluation and revaluation.

 

In 1971 the Bretton Wood system was replaced by a system of floating exchange rates because the Federal Reserve didn’t have enough gold to guarantee the American currency due to huge inflation. A freely floating exchange rate is determined by supply and demand only. There are economists who think that, in most circumstances, floating exchange rates are preferable to fixed exchange rates. As floating exchange rates automatically adjust, they enable a country to dampen the impact of shocks and foreign business cycles, and to preempt the possibility of having a balance of payments crisis. Proponents of floating exchange rates claimed that currencies would automatically establish stable exchange rates which would reflect true economic realities. However speculation has a great impact, and companies and investors often follow short-term money market trends even if these are contrary to their own long-term interests.

In the late 1970s and early 1980s all exchanged controls were abolished which led to the current situation when most of currency transactions are purely speculative. Huge amounts of money move around the world, chasing high interest rates or capital gains.

However most governments do not leave exchange rates without any control at all. When necessary, most of them influence of their currency. Managed (dirty) floating exchange rates are more common than freely floating ones.

In reality speculators can be much more powerful than governments which was proved in 1992 when British currency was withdrawn from the ERM and allowed to float, losing about 15% its value against the D-mark because of actions of speculators. The next year again because of actions of speculators the European Monetary System was suspended and introduced again later in a looser form.

Many business people in fact would prefer a single currency because it would make planning future contracts much more easier. It would help business a lot if a random element such as currency fluctuations was removed because it greatly influence profits.

The example of attempts to make a single currency may be the euro. The euro came into existence as a real currency in 2002, when the old notes and coins in the twelve member countries were withdrawn. Although the beginning of the euro was somewhat glorious, it’s not feeling so well now.

In the long term, living with a fixed exchange rate demands wage and price flexibility. Fiscal policy can help. Under fixed exchange rates, governments should tighten fiscal policy when money floods in, in order to dampen aggregate demand. But rigid exchange-rate rules do not always promote fiscal prudence. Indeed, Brazil’s currency regime may have made much-needed fiscal adjustment harder: now that Brazilians have conquered inflation, they are loth to push through painful budgetary reforms. And therein lies the rub. Fixed exchange rates make fiscal prudence that much more important. If a country does not improve its fiscal policy, a fixed-rate system may simply store up trouble.

But surely, their fans may say, fixed exchange rates have one important advantage: they are less volatile than floating rates. And this matters especially in the thin currency markets of emerging economies. However, this risk can be overblown. In industrial countries, remarkably little evidence exists to suggest that the volatility of floating exchange rates does in fact harm trade or investment. Both traders and investors can learn to hedge. Indeed, a forced devaluation may do much more harm to investor confidence than continuous exchange-rate fluctuations. And “pure” floating is rare: central-bank intervention can limit volatility and yet allow more flexibility than a fixed system.

Neither fixed nor floating rates are substitutes for sound macroeconomic policies. Either can work if a country shows sufficient commitment. And for countries with an acute history of inflation, the rigour of a currency board may be the best medicine. But for those with less historical baggage, more flexibility may make sense. Flexible rates will not eliminate the volatility that emerging economies face. But they may make it easier to deal with.

 

 

Motivation

Motivation is the combination of internal process and external forces that direct and sustain behaviour toward a goal.

Motive is a general term applying to the entire class of drivers, desires, needs, wishes and similar forces that cause people to do things

The motivation process centers on needs which are caused by imbalances. We can look at motivation as a chain reaction. It starts out with an unsatisfied need.Need-want-satisfaction chain. Needs give rise to wants which cause tensions which give rise to actions which result in satisfaction.

The traditional theory of motivation is based on the assumption that money is the primary motivator – employees will produce more for greater financial gain.

Content theories focus on the wants and needs that individuals are trying to satisfy within the situation. Maslow’s needs hierarchy-Maslow identified certain basic human needs and classified them in an ascending order of importance. The needs of an individual are said to exist in a hierarchy as follows: physiological (pay, pleasant work environment, welfare, nourishment), safety (job security, pension, and safe working conditions), social needs (acceptance by work groups, clients or wider associations), esteem (recognition, status, job title and responsibilities), and self-actualization (challenge, creativity, personal development). Herzberg’s Two Factor Theory- Herzberg conducted a number of studies and concluded that the degree of satisfaction and the degree of dissatisfaction felt by an organisation member as a result of performing a job are two different variables that are determined by two different sets of items.

The set of items that influences the degree of job dissatisfaction is called hygiene or maintenance factors. They concern the work environment and include interpersonal relations, supervision, company policy and administration, job security, working conditions, salary, status and personal life. The group of factors bringing about satisfaction is called motivators.

Only if both the hygiene factors and motivators are properly maintained will motivation occur.

Hygiene factors are essential if workers are to be motivated and they deal with the question “Why work here?”, while motivators deal with the question “Why work harder?”

If Herzberg’s theory is true, it means that managers must pay great attention to job content. They must find ways of making jobs more challenging and interesting. As a result, managers show great interest in job enrichment programmes.

Process Theories try to explain and describe the process of how behaviour is energized, directed, sustained and stopped. These theories are necessary for explaining choice, effort and persistence. Equity theory is based on the belief that employees will take whatever actions are necessary to produce feelings of equity with respect to their jobs. All employees bring a certain set of inputs to their jobs in the form of education, previous work experience, etc., and all employees receive certain outcomes in the form of pay, benefits, job satisfaction, prestige, etc.

Preference-Expectancy Theory -Vroom suggested that an employee’s performance is based on individual factors such as personality, skills, knowledge, experience, and abilities.

The effort-performance expectancy is a belief that effort will lead to the successful performance of some task. In other words, “If I try to hard enough, can I do it?”

The performance-outcome expectancy is the belief that a certain outcome, usually a reward, will follow performance. “If I do it, will I be rewarded?”

Reinforcement theory Reinforcement is any effect that causes behavior to be repeated or inhibited.

1)Do not reward everyone in the same way. Give more rewards to the better performers.2)Recognize that lack of reward can also influence behavior.3)Tell people what they must do to be rewarded. Employees should have standards against which to measure the job.4)Tell people what they are doing wrong. A manager should give them a clear idea of why the rewards are not forthcoming.5)Do not punish anyone in front of others because it lowers the individual’s self – respect and self – esteem.6)Be fair. Make the consequences equal to the behavior.

Job Design is the identification and arrangement of tasks, which together form a job. There are 2 basic approaches to achieving a balance- matching people to jobs and matching jobs to people.

-Job rotation is periodically rotating work assignments. Job rotation entails moving a worker from job to job, thus it does not require the worker to perform only one simple and specialised job over the long run.

Matching jobs to people

The limitations of adapting people to jobs have led many to the reverse view. Jobs must match people`s capabilities and the nature and boundaries of the job must be considered alongside the needs of the people. Productivities and needs satisfaction are dual aims of the two policies- enlargement and enrichment.

-Job enlargement is a strategy developed to overcome the boredom of more simple and specialised jobs.

-Job enrichment- аdding responsibility is one of the most common ways of «enriching» a job. It means redesigning the job with the express intention of increasing its motivational content. Job design is placed at the core of motivation and key all job characterized can be changed.

Skill variety: the range of skills in use can be increased. (For example, planning, leading, communicating, recording, monitoring).

Task identity: enabling a person to complete a whole task with a meaning outcome.

Task significant: designing the job so that its outputs are important to the work of others.

Autonomy: allowing over job pace, sequence, checking, and so on.

Feedback from job: proving information on how well a person is doing.

-Flextime is the fact that job s have been performed within a fixed eight-hour workday.

 

Packing and Marking.

P&M arevery important in overseas trade because goods transported by sea are exposed to greater risks than in home trade when they travel by land or air transport. In some companies-special departments for export packing (control and regulate the problem). P may be doneby a firm of export packers (charge a commission). Packing –larger quantities packed for transport( crates of machinery, barrels of wine). Packaging-wrapping of products for display in shops such as packets of biscuits.

Packing: external (crate or bag) and internal (box, packet, flask, etc.).P must be appropriate to the type of goods to be carried. P materials must accord with a number of considerations: climatic conditions in the foreign country, ease of handling, etc. additional shock-absorbent materials, tissue paper, hay, straw, wood shavings, cork waste, etc.

Containers are steel boxes of different sizes but usually 8 by 8 by 20 or 40 feet (2.4 by 2.4 by 5.9 or 12 metres).

Old Style Handling still many ports and ships which use the old kind of packing. This means goods are packed separately and not in bulk quantities. Many goods are palletised when old-style methods of loading and unloading are used. The sacks or cartons are stacked on pallets which are then lifted by crane or fork-lift truck. Larger crates and cases may be lifted over the ship’s rails individually.

The capital cost of containerisingports is enormous. So the majority of ports still use traditional methods. + Containers : Handling at docks can be done mostly by machines; Very few stevedores are needed; Unloading and loading a container ship is very fast and turnaround is much shorter; Packing can be done in suppliers’ factories; Warehouses are unnecessary.

The stowage factor is the weight of 40 cubic feet of the goods.If 1 ton of the goods takes up less space in the ship than 40 cubic feet (1.1323m), freight is charged according to weight. If one ton of the goods takes up more space than 40 cubic feet, freight is calculated according to volume.

Recent Developments in Packing and Carrying Goods.the methods of packing and shipping cargoes have totally changed, new technologies. packaging system - used for carrying general cargo in large assortment. The goods are consolidated into a certain number of cargo places called packages. goods are packaged with the help of platforms, flats (platforms which may be handled by fork-lift trucks) or roll-trailers (wheeled platforms which are towed by trucks to the place of loading onto the vehicle). The container system - transportation of general cargo of different types as well as valuable goods. goods are delivered according to the door-to-door transport scheme without any transshipment en route from container to container. trailer system is used only in terms of marine transport for carrying packaged or non-packaged general cargoes loaded into the trailers and roll-trailers which are towed by trucks. The vessel is loaded horizontally through rear, side or bow doors. The cargoes are loaded into the roll-trailers in the port of shipment before the vessel moors. The rollers (the roll-on – roll-off vessels) are to be equipped with special loading/unloading equipment: the fork-lift loaders, container loaders and special car-carriers. The lighterage system is to ensure transportation of bulk and general cargoes loaded into the special barges known as lighters. The lighters are loaded in the shallow water at the moors of the river ports. Then, they are grouped and towed by tugs into the seaports. The lighters are lifted on board a ship, which delivers them to the port of discharge. The cassette system differs from the others by the fact that the weight of the consolidated cargo place called a cassette may be 500 tons or more. There can be cassettes of 2 types: flat platform and floating section.

packages must be clearly markedand numbered. Marks - for identification purposes. name of destination and the initials of the person or firm. in indelible paint with recognised kind of marks.

3 principle types of marking;the consignee’s own distinctive marks (name of the place of destination, serve as an address on an envelope); official marks required by authorities; special directions or warnings. M3 sides: on the top of the case, and two non-opposite sides, in waterproof black paint in English or another language.

Pof the goods - in accordance with the state standards existing in the RF or with the technical conditions ruling at the manufacturing works and ensure safety of the goods during transportation provided that the goods are duly handled. should not create obstacles for customs inspections. The equipment is to be protected with anticorrosive coating before packing. The packing shall be suitable for loading by cranes, by autocars, by trucks and manually in so far as the weight and volume of individual packages allow.

 

 







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