Read and translate the text «Banks, types of bank services»

Banking is an industry containing depository institutions that provide financial intermediary services and safekeeping of checkable deposits that make up an important position of the economy’s money supply.

Banking plays a key role in providing safety for a portion of the economy’s M1 money supply, as well as other near money assets. In addition, banking is also a critical financial intermediary, bringing together borrowers and lenders, those willing to lend a portion of their unspent income and those needing to borrow extra income.

Banks are among the most important financial institutions in the economy that produce and sell financial services. In fact banks are those financial institutions that offer the widest range of financial services of any business firm in the economy. Their success or failure depends on their ability to identify financial services to meet the public demands, produce those services efficiently and sell them at a competitive price. Banks are not only financial intermediaries. The crucial feature of banks is that some of their liabilities are used as means of payment, and therefore are a part of the money stock.

The banking business is comprised of traditional commercial banks and other depository institutions. These depository institutions – including traditional commercial banks, credit unions, saving and loan associations, and mutual saving banks – are financial intermediaries that accept deposits, make loans, and directly control a significant portion of the nation’s money supply. Commercial banks are financial intermediaries with a government licence to make loans and issue deposits.

Banking covers so many services that it is difficult to define it. Most banks offer a combination of wholesale and retail banking, i.e. they provide large-scale services to companies, government agencies and other banks and small-scale services to the general public respectively. Both types of banking, however, have three essential functions. They are:

1. deposit function - receiving customers' deposits and offering interest-bearing deposits.

2. payments function - making payments on behalf of customers for their purchases of goods and services.

3. credit function - lending and investing money.

There are some traditional services that banks offer.

Current account services. They are extended to anyone whom banks regard as reliable. A new depositor should be recommended by his employer or should present a reference. If this proves satisfactory the bank will accept a deposit from him which will be entered in his current account. A cheque (bank) book will then be issued free of charge. Once the customer has received it he may use the cheques to order the banker to pay out sums of money from his current account. Money is being paid into or out of the account as often as the customer finds convenient.

Deposit account services. Companies and individuals can deposit cash resources that are not needed at present. They can withdraw the money either any day they needed or after a certain period in case of time deposits.

Carrying out currency exchange. History shows that one of the first services offered by banks was currency exchange - a bank stood ready to trade one form of currency for another in return for a service fee. In today's financial marketplace trading in foreign currency is usually carried out by the largest banks due to currency risk and the expertise needed to carry out cash transactions.

Safekeeping of valuables. During the Middle Ages, banks began the practice of holding gold, securities, and other valuables owned by their customers in secure vaults. Customers still leave articles of value, locked boxes, wills, and many other things in bank strong rooms for safety. The customer should lock boxes and seal parcels before he hands them in to the bank. The banker will issue a receipt if so required. The banker hands them back only against a signature by his customer or a properly-appointed agent whom the bank knows. Some banks maintain a safe deposit service where the customer himself puts his documents or articles of value into his box in the strong room or takes them out. He alone has the key to his box. The bank keeps duplicate keys in case of emergency, but does not use them except in the presence of the customer or by his express authority.

Trust services. For many years banks have offered to manage the financial affairs and property of individuals and business firms in return for a fee. This property management function is known as trust services. Most banks offer both personal trust services to individuals and families and commercial trust services to corporations and other businesses.

Banking is not static business today. Banks are undergoing sweeping changes in function and form. Among the newest services offered by banks are:

Financial Advising. Customers have long asked for financial advice, particularly, when it comes to the use of credit and the saving and investing of funds. Many banks today offer a wide range of financial advisory services, from helping to prepare tax returns and financial planning to consulting for business managers and checking on the credit standing of firms and individuals who deal with one of the bank's business customers.

Cash Management. Over the years banks have found that some of the services they provide for themselves are also valuable for their customers. One of the most prominent examples is cash management services, in which a bank agrees to handle cash collections and disbursements for a business firm and to invest any temporary cash surpluses in short-term interest-bearing securities and loans until the cash is needed. While banks tend to specialize mainly in business cash management services, there is a growing trend today towards offering similar services for consumers.

Selling Insurance Policies. Most banks either offer selected insurance policies to their customers or have plans to offer insurance services in the near future. They hope to be able to offer regular life insurance policies and property-casualty policies, such as auto or home owners' insurance.

Offering Security Brokerage Services. In today's financial marketplace many banks are doing their best to become true "financial department stores". This is one of the main reasons banks began to market security brokerage services in the 1980s, offering their customers the opportunity to buy stocks, bonds, and other securities without security dealers or brokers.

It should be clear from the list of services described that the changes affecting the banking business today are so important that many industry analysts refer to current trends as "a banking revolution".

 

Vocabulary:

banking – the business of a bank or a banker

vault – a room with thick walls and a heavy door to protect it against fire and thieves, in which money, jewels, important papers, etc. are kept at a bank.

prominent – 1. sticking or stretching out beyond a surface; 2. noticeable, easily seen; 3. of great importance, fame, etc.

to disburse – fml. to pay out money, esp. from a sum saved or collected for purpose.

 

Exercise 1. Suggest the meaning of:

The ability to identify financial services, to meet the public demands, to provide large-scale services to..., to receive customers' deposits, in return for a service fee, cash transactions, safekeeping of valuables, to issue a receipt, to maintain a safe deposit service, duplicate keys, to undergo sweeping changes, particularly, it comes to the use of..., to specialize mainly in..., to offer regular life insurance policies and property-casualty policies, to market security brokerage services, current deposits, time deposits, to accept a deposit from a customer.

 

Exercise 2. What is the English for:

Предлагать широкий выбор финансовых услуг, продавать что-либо по какой-либо цене, предоставление широкого спектра банковских услуг крупным клиентам (юридическим лицам), предоставление банковских услуг отдельным вкладчикам (физическим лицам), предлагать процентные вклады, делать что-либо от имени кого-либо, проводить операцию, валютные операции, квалификация (опыт, умение), скреплять печатью (запечатывать), возвращать что-либо по предъявлении подписи клиента, в чрезвычайной ситуации, делать что-либо с разрешения клиента, подготовить декларацию о доходах, проверять кредитоспособность кого-либо, осуществлять операции по получению и выплате денежных средств для кого-либо, инвестировать временно свободные денежные средства в краткосрочные процентные ценные бумаги, предлагать брокерские услуги по реализации ценных бумаг, облигация, оказывать влияние на банковское дело, определять что-либо, называть что-либо