Text 2. Read this article and give Russian equivalents to the underlined expressions.

The year that shook the world

On 15 September 2008, one of the world's oldest and most respected investment banks, Lehman Brothers, collapsed into bankruptcy, sparking the worst financial crisis since the Great Depression. The Lehman Brothers bankruptcy was a shock to the system, but not the only one. A week earlier, the US government had seized Fannie Mae and Freddie Mac. These companies help finance most American housing loans. And one day after Lehman's failure, the government decided that the huge insurer A.I.G. was too big to fail. The Federal Reserve rescued the American International Group with an eighty-five billion dollar loan.

 

But soon, credit markets around the world slowed to a halt on fears about the health ofbanks. The events that unfolded over just a few days spread panic among investors, bankers and the wider world over the stability of the financial system. The global crisis in confidence meant banks were reluctant to make loans, investors pulled money out of markets, and economic activity slowed.

 

Over the following weeks and months, economic officials tried to restore lending byslashing interest rates, making emergency loans to banks and using other means to propup other faltering banks, money-market funds and other institutions. Governments around the world had to pump trillions into their financial systems through bank bail-outs, central bank actions and huge stimulus plans to save their economies from collapse.

When the dust had settled, stock markets were down 40%, major banks in the US and UK were surviving only on government support, and the world had entered a sharp recession, the deepest in 60 years, with rising unemployment and a collapse of house prices.

 

Although the worst was avoided, much pain remains. The crisis culminated in a collapse ofasset prices at the end of 2008. Middle-class and wealthy households around the world felt poorer and therefore cut their spending sharply. Sky-high oil and food prices added to thepain, and thus to the downturn.

 

Enterprises could not sell their output, leading to production cuts and layoffs. Risingunemployment compounded the loss of household wealth, throwing families into deep economic peril and leading to further cutbacks in consumer spending.

 

A huge debate has ensued around the so-called "stimulus spending" in the US, Europe and China. Stimulus spending aims to use higher government outlays or tax incentives tooffset the decline in household consumption and business investment.

 

In the US, for example, roughly one third of the $800bn (£490bn) two-year stimulus package comprises tax cuts (to stimulate consumer spending); one third is public outlays on roads, schools, power and other infrastructure; and one third takes the forms of federaltransfers to state and local governments for health care, unemployment insurance, school salaries and the like.

 

Stimulus packages are controversial because they increase budget deficits and thus imply the need to cut spending or raise taxes in the near future. The question is whether they successfully boost output and jobs in the short term and if so, whether they do enough to compensate for the inevitable budget problems down the road.

 

The true effectiveness of these packages is not clear. Suppose that the government gives a tax cut in order to increase consumers' take-home pay. If consumers expect that their taxes will rise in the future, they may decide to save the tax cut rather than boost consumption. In that case, the stimulus will have little positive effect on household spending but will worsen the budget deficit.

 

The crisis prompted calls for more effective regulation of financial markets, and demands that banks hold larger reserves to cover possible loan defaults. There also is debate over changing the huge bonuses paid to bank executives so top bankers are rewarded for the long-term growth of the company -- not just short-term profits at high risk.

 

The crisis can yet be an opportunity to turn from a path of financial bubbles and excessiveconsumption to a path of sustainable development. In fact, seizing this opportunity is the only recipe for genuine growth that we have left.

 

Task 1. Answer the following questions:

1. How has the collapse of Lehman Brothers changed the financial world forever?

2. How has the crisis changed the USA?

3. How has unemployment risen across Europe?

4. How has the crisis affected your life?

Task 2. Join the halves of sentences below. Translate into Russian:

1. The report warned that unless urgent action was taken,

2. The G20 has agreed that bonuses should be deferred in order to reward long-term success rather than

3. The U.S. economy continues to shrink and shed jobs, but at a much slower pace than a few months ago,

4. The Commerce Department reports the U.S. economy contracted at a one percent annual rate in the second quarter of the year,

5. Lehman's collapse had huge repercussions on the psyche of investors and the scale of the financial crisis. But there is now concern that as the banks start to recover,

6. The  deep  recession  coincided  with  a  financial  crisis  that  saw  the  downfall  of numerous American banks and investment firms,

7. The financial crisis has turned into a full-fledged recession,

8. The depth of the recession and the slowdown has been so great that, of course,

9. The crisis that initially began in the financial sector,

10. Stimulus plans have clearly helped to stabilize the world economy,

 

 

j) the banking crisis might not be the last of its type.

k) affecting practically all markets and countries.  The crisis is having a particularly dramatic impact on developing countries.

l) they have not taken the necessary steps to prevent a repeat of the crisis.

m) short-term  risk-taking,  but  have  so  far  opposed  mandatory  caps  on  banker compensation.

n) has turned into a dramatic downturn in the real economy. And virtually no country has been left unscathed by the crisis.

o) confirming the United States remained mired in recession at least through the midpoint of 2009.

p) nevertheless, it is premature to talk about self-sustained recovery right now.

q) giving economists reason to proclaim the longest recession in the post-World War II era may soon be over.

r) there must be some rebound to come.

s) and forced the U.S. government to rescue some of the nation's best-known private financial institutions and corporations.