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ТОП 10 на сайтеПриготовление дезинфицирующих растворов различной концентрации
Техника нижней прямой подачи мяча.
Франко-прусская война (причины и последствия)
Организация работы процедурного кабинета
Смысловое и механическое запоминание, их место и роль в усвоении знаний
Коммуникативные барьеры и пути их преодоления
Обработка изделий медицинского назначения многократного применения
Образцы текста публицистического стиля
Четыре типа изменения баланса
Задачи с ответами для Всероссийской олимпиады по праву
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ЗНАЕТЕ ЛИ ВЫ?
Влияние общества на человека
Приготовление дезинфицирующих растворов различной концентрации
Практические работы по географии для 6 класса
Организация работы процедурного кабинета
Изменения в неживой природе осенью
Уборка процедурного кабинета
Сольфеджио. Все правила по сольфеджио
Балочные системы. Определение реакций опор и моментов защемления
Eх. 11. Fill each gap with a suitable word from the box. Sum up the text in 5-7 sentences. Present your summary in class.
US Activities of Foreign Banking Organizations
The International Banking Act of 1978 (IBA) provided for federal regulation of the US operations of foreign banks and granted important new responsibilities to the Federal Reserve for the supervision and regulation of such operations. Enactment of this ________followed rapid growth in the activities of foreign banks in the United States and an increase in their competitive________upon domestic markets.
The IBA created a federal regulatory and supervisory structure for the US branches and agencies of foreign_______, similar to that applicable to US banks. This policy of "national treatment" promotes competitive equality between domestic and foreign banking________in the United States by giving foreign banks operating in this country the same________and subjecting them to the same restrictions and obligations that______to US banks. As part of the implementation of national treatment, the IBA limited expansion of interstate deposit-taking and domestic non-banking ________ of foreign banks, provided the option of federal licensing for agencies and branches of foreign banks, and required FDIC insurance for branches that _______in retail deposit-taking.
At the federal level, the IBA apportioned primary supervisory responsibility for US _________ and agencies of foreign banks among the three federal banking agencies, according to the type of license and whether the banking office has deposit insurance. In addition, the Federal Reserve was given broad authority for the supervision of all federal and state-licensed branches and agencies of foreign banks ________ in the United States. In fulfilling this responsibility, the Federal Reserve must assess the impact and condition of foreign banks operating across state lines. To carry out its ________, the Federal Reserve has statutory authority to examine the assets and liabilities of all branches and agencies, but it generally relies upon examinations that state and other federal banking authorities _______ . Under the Bank Holding Company Act and the International Banking Act, the Federal Reserve also has responsibility to approve, review, and monitor the US non-banking activities of foreign banking organizations.
Words you may need:
enactmentn введение закона в силу
"national treatment"национальный режим
(retail) deposit-takingприем вкладов от населения
optionn выбор, право выбора
statutory authorityправо, предоставленное законом; власть, предоставленная законом
assets and liabilitiesактивы и пассивы
Ex. 12. a) Read and discuss the texts.
b) Single out the main facts from the texts and present them in a short essay.
c) Give your answer to the question in the title.
a) Is Monetary Policy Needed?
Many people believe that central banks should conduct an active, interventionist monetary policy even though most countries are abandoning other forms of state intervention in their economies, such as price controls, income policies, and industrial planning. These and other forms of intervention, such as agricultural policies and state ownership of business enterprises, waste economic resources and distort markets.
Monetary policy, which represents government intervention in the marketplace for credit, exhibits the same negative effects. The time has come to challenge the need for monetary policy as practised by central bankers (often with finance ministry guidance). The financial markets, operating under appropriate tax and structural policies, will produce far greater price stability and smoother economic growth than central bankers can.
Some people still believe that controlled growth of the money supply will minimise inflation. In fact, the quantity of money in the industrialised nations today is essentially demand-driven. Currency, a key component of the money supply, is demand-driven when people can easily exchange unneeded currency for interest-bearing financial assets, such as bank deposits and bonds. Currency-driven inflations occur only when governments finance their deficits by paying their obligations in currency that cannot be converted easily into other assets.
Bank deposits, the main component of the money supply in the industrialised countries, are demand-driven as well. This demand reflects the willingness of individuals and businesses to provide credit to the economy in which they operate, versus investing in real assets or moving funds to other countries.
Reserve requirements on bank deposits, still a favoured monetary policy tool of some central bankers, do not restrict bank lending.
As a practical matter, monetary policy in the industrialised world today essentially takes the form of announced official rates for lending to banks and central bank "steering" of short-term rates.
In effect, civil servants, called central bankers, tell participants in the highly competitive and increasingly internationalised financial marketplace what they, the civil servants, believe short-term interest rates should be.
The credit markets do not differ from other markets. Interest, like any other price, should clear the market at a rate that balances supply with demand.
Words you may need:
interventionist policyинтервенционалистская политика
abandonv отказываться от чего-л.
demand-drivenопределяемыйспросом, зависящий от спроса
interest-bearingприносящий процентный доход
currency-driven inflationинфляция, являющаяся следствием объема валютных средств
versusprep против, в сравнении с
"steering"n управление, руководство
civil servantгосударственный служащий
credit marketрынок кредитов
to clear the market(зд.) регулировать рынок
d) Say why the CBR is interested in the development and improvement of the payment system of Russia.
b) Payment Systems
Public policy responsibility for the payment system usually rests with central banks. Central banks are naturally interested in the payment system because it is a key component of the operation of financial markets and has important implications for the trading efficiency of the real economy. Of particular concern to central banks is clearing and settlement in financial markets where trading results in large payment obligations, such as the securities, commodity, interbank funds, and foreign exchange markets.
The central bank also participates in the payment system as a provider of interbank payment services. The role of the central bank in operating the interbank system depends on the development of a nation's payment system.
The Central Bank of Russia, with the assistance of international experts, has taken steps to draft legislation and oversee the decentralized expansion of Russia's domestic payments system. Progress has included improvements in the Interbank Payments System, involving the use of computer-generated instructions with specialized software. An electronic payments system for cash settlement was installed in Moscow, where 65 per cent of total document turnover in Russia occurs. The so-called automatic payments system began with eight banks in September 1993. As of July 1994, about 60 banks and two cash settlement centers (all in the Moscow area) participated in the automatic payments system. Eventually, all banks will be part of this system. Efficiency at other cash settlement centers was improved, and growth was recorded in the number of both interbank settlement centers and networks of banks with cross-connecting correspondent accounts that act as settlements agents for associated groups of smaller banks.
Words you may need:
restv (зд.) возлагаться (об обязательствах)
softwaren компьютерное программное обеспечение
cash settlement centerрасчетно-кассовый центр
cross-connecting correspondent accountsперекрестные корреспондентские счета
Ex. 13. Read the dialogue, sum up its content and act it out;
Correspondent: Mr. President, your government austerity program has been painful and controversial but it has transformed the country's financies, hasn't it?
President of the Central Bank: Yes, two years ago we embarked on stabilization program. As a result, the forint was devalued and a gradual "crawling peg" exchange rate mechanism was introduced. At the same time, we imposed additional taxation. All this was not very popular, you know.
Cor.: I remember that your labour unions were outraged.
Pr.: Not only. Many government supporters joined the opposition. But judging by recent developments, exports are surging, imports are going down and industrial output is rising. Besides, we have negotiated a standby facility with the IMF and received credit ratings from international credit rating agencies.
Cor.: True, but despite the economic progress, analysts are worried that you may not succeed in reducing your current-account deficit this year as planned.
Pr.: The most recent data on the current-account deficit reflect considerable improvement. The figures are in line with the projected trend. So we have no doubt that we'll meet our target for the year as a whole.
Cor.: How was the first quarter current-account deficit financed?
Pr.: It was covered by foreign direct investment and privatization revenues.
Cor.: You got more than $13 billion. Such large capital inflows can cause problems. What have you done to neutralize their negative impact or, as financial specialists put it, to "sterilize" them?
Pr.: The revenues from privatization are mainly used to reduce our external-debt burden. So they are fully sterilized without any problem. The situation regarding FDI is more complicated, because the money does not come into the state's hands. But we reduced quite substantially the net REPO position of the banking community. Next, we became more active players on the open market, selling huge amounts of government securities, and then we increased the banks' minimum reserve requirements.
Cor.: Interest rates for short-term Treasury bills in late May were about 24 per cent, compared with 32 to 34 per cent a year ago. Aren't you worried that rates are coming down too quickly, given the need to curb inflation and support your exchange rate policy?
Pr.: We can comfortably live with that drop, because the offered yields on government securities are still higher than the expected rate of inflation.
Cor.: Now that you have joined the OECD, your securities look very attractive. Are there any other financial benefits that came with your OECD membership?
Pr.: I'm sure you know, don't you, that many investment funds aren't authorized to invest in countries that are riot OECD members. So our membership has expanded the number of investors interested in us. What's more, they are all high-quality investors.
Cor.: International investors have long had a soft spot for Hungary. Yields on government securities are high, the secondary market is liquid, you have never even breathed the word "rescheduling". You were also able to lengthen your maturities and reduce interest rate spreads last year. What are your plans on the funding front for the coming year?
Pr.: Our average maturity is now longer than seven years. We are confident that spreads will come down further. Since the beginning of the year they have already fallen quickly on the secondary market from about 200 basis points to 100 over LIBOR.
Cor.: Government finances may have improved, but funding the social security system is still a real problem, isn't it?
Pr.: It consumes about 14 or 15 per cent of the GDP, which is far too much. We can manage that for the time being. But it's obvious we need to deeply restructure the pension system, health care and other social security programs.
Cor.: You need a far-reaching reform because your government is unlikely to be able to contain the social security deficit. Given the precarious financial situation of many Hungarian companies, you will have problems collecting the social security arrears.
Pr.: You see the picture darker than it is, I'm afraid. It's true that the austerity program has had a negative impact on living standards, more than that we'll have to have further spending cuts to bring the budget deficit below 4 per cent of the GDP. But at the same time we can't deny the fact that our companies are investing more now, their profitability is improving and the stock market is doing well.
Cor.: Despite all these improvements, however, inflation at 24 per cent remains a big problem, isn't if?
Pr.: Undoubtedly, but it is coming down because of market forces and not as a result of administrative measures. Our policies are working.
Words you may need:
austerity programпрограмма жесткой экономии
embark (on)v приступать (к чему-л.)
forintn форинт (денежная единица Венгрии)
"crawling peg"«ползущая привязка» (система фиксации уровня валютного курса с регулярным его изменением на определенную величину)
to be outragedбыть возмущенным
standby facilityрезервный кредит
credit ratingпоказатель кредитоспособности заемщика или уровня кредитного и инвестиционного риска по его обязательствам
succeed (in)v преуспевать (в чём-л.)
FDI (Foreign Direct Investments)прямые иностранные инвестиции
current-account deficitдефицит по текущим операциям
net REPO positionнетто РЕПО позиция
yieldn доход по ценным бумагам
OECD – Organization of Economic Cooperation and DevelopmentОрганизация экономического сотрудничества и развития
to lengthen maturitiesудлинить срок погашения ценной бумаги
interest rate spreadпроцентный спред (разница между средними процентными ставками по активам и пассивам, приносящим проценты)
basis pointбазисный пункт
LIBOR – London Interbank Offered Rateставка предложения (продавца) на лондонском межбанковском рынке депозитов
precariousadj ненадежный, сомнительный
arrearsn pl задолженность
Ex. 14. Give extensive answers to these discussion questions:
1. What role does the central bank play in any country?
2. What is monetary policy? Why is monetary policy necessary?
3. What banking system exists in Russia?
4. How does the CBR ensure the banking system stability?
5. What monetary policy does the CBR pursue?
6. What market-oriented instruments does the CBR use?
7. Is the entry of foreign banks welcome in Russia? What about other countries?
8. What are the shortcomings of the financial system in Russia?
9. What happens when a country pursues a "tight" or an "easy" monetary policy?
10. How can money supply be regulated?
11. Is the international financial community concerned about banking crises?
12. Why do many countries experience banking problems?
13. What money aggregates are used to measure and control money in circulation?
14. How do Central and East European countries solve their banking problems?
15. Do industrialized countries face banking problems?
In order to get prepared for participation in the class discussion of the questions, write a summary of the interview in Ex. 13. Follow the plan suggested below:
1. The Hungarian stabilization program.
(Use: austerity, painful, controversial, not very popular, negative impact on living standards, spending cuts, privatization, FDI)
2.The measures taken.
(Use: to impose, exchange rate, taxation, to devalue)
3. The immediate results.
4. The situation with current-account deficit.
(Use: to be in line with, privatization, to meet the target, capital inflows, to cause problems, to succeed in reducing, open-market operations)
5. Operations of the Central Bank to find resources and stabilize the banking system.
6. Stock market.
(Use: to curb inflation, yields on government securities, membership, secondary market, rescheduling, maturity, spreads, to be confident)
7.Problems with the social security system.
(Use: to contain the deficit, to collect arrears, to owe)
8. Changes for the better in Hungary.
(Use: to deny, profitability, to do well, market forces)
Ex. 15. Prepare a short talk on the following:
a) The structure of the CBR (Bank of England, the Federal Reserve System), how it provides services to banks, stabilizes the banking system and shares in economic policy-making.
b) The monetary policy pursued in Russia at the present time.
c) Define money and list the assets used as money in different countries.
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