Modern Banking

The goldsmith bankers were an early example of a financial intermediary. A financial intermediary is an institution that specializes in bringing lenders and borrowers together.

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

Banks are not the only financial intermediaries. Insurance companies, pension funds, and building societies also take money in order to relend it. The crucial feature of banks is that some of their liabilities are used as a means of payment and are therefore part of the money stock.

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

Let’s start looking at the present- day UK banking system. Although the details vary from country to country, the general principle is much the same everywhere.

In the UK, the commercial banking system comprises about 600 registered banks, the National Girobank operating through post offices, and a dozen trustee saving banks. Much of the most important single group is the London clearing banks. The clearing are so named because they have a central clearing house for handling payment by cheque.

A clearing system is a set of arrangements 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 accounts.

Suppose you bank with Barclays but visit a supermarket that banks with Lloyds. To pay for your shopping you write a cheque against your deposit at Barclays. The supermarket pays this cheque into its account at Lloyds. In turn, Lloyds presents the cheque to Barclays, which will credit Lloyds’ account at Barclays and debit your account at Barclays by an equivalent amount. Because you purchased goods from a supermarket using a different bank, a transfer of funds between the two banks is required. Crediting or debiting one bank’s account at another bank is the simplest way to achieve this.

However, on the same day someone else is probably writing a cheque on a Lloyds’ deposit account to pay for some stereo equipment from a shop banking with Barclays. The stereo shop pays the cheque into its Barclays’ account, increasing its deposit. Barclays then pays the cheque into its account at Lloyds where this person’s account is simultaneously debited. Now the transfer flows from Lloyds to Barclays. Although in both cases the cheque writer’s account is debited and the cheque recipient’s account is credited, it does not make sense for the two banks to make two separate inter-bank transactions between themselves. The clearing system calculates the net flows between the member clearing banks and these are the settlements that they make between themselves. Thus the system of clearing cheques represents another way society reduces the costs of making transactions.

Задание 21. Переведите деловое письмо с русского языка на английский язык:

LETTER 7

Уважаемые господа!

Вы только что любезно сообщили нам, что вам пришлось купить машины у другой компании. Мы сожалеем, что ваш заказ был размещен у наших конкурентов из-за того, что наш срок поставки вам не подошел, и вы посчитали наши цены слишком высокими.

Мы хотели бы объяснить, что сейчас у нас очень много заказов, и в результате этого срок поставки увеличился. Кроме того, в наших машинах были сделаны некоторые усовершенствования. Вот почему наши цены выше цен наших конкурентов.

Тем не менее, мы полагаем, что если вы примете во внимание высокое качество наших машин, вы согласитесь, что цены приемлемы.

Мы надеемся, что вы сможете разместить у нас свои будущие заказы.

С уважением, Коммерческий директор.

Задание 22. Прочитайте и переведите текст по специальности со словарем:

An exporter can send a bill of exchange for the value of the invoice of goods for export through the banking system for payment by an overseas buyer on presentation. A bill of exchange is legally defined as “an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to which it is addressed to pay on demand or at a fixed or determinable future time a certain sum of money, to or to the order of specified person, or to the bearer”. In other words an exporter prepares a bill of exchange which is drawn on an overseas buyer, or even on a third party as designated in the export contract, for the sum agreed at settlement.

The bill is called a sight draft if it is made payable at sight i.e. “on demand”. If it is paid “at a fixed or determinable future time” it is called a term draft, because the buyer is receiving a period of credit, known as the tenor of the bill. The buyer signs an agreement to pay on the due date by writing an acceptance across the face of the bill. By using a bill of exchange with other shipping documents through the banking system, an exporter can ensure greater control of the goods, because until the bill is paid or accepted by the overseas buyer the goods cannot be released. Conversely the buyer does not have to pay or agree to pay by some agreed date until delivery of the goods from the exporter.

An exporter can pass a bill of exchange to a bank in the UK. The UK bank forwards the bill to its overseas branch or to a correspondent bank in an overseas buyer’s country. This bank, known as the collecting bank, presents the bill to whomever it is drawn upon, for immediate payment if it is a sight draft, or for acceptance if it is a term draft. This procedure is known as a clean bill collection because there are no shipping documents required. Clean bill collections have become more popular, particularly in some European countries where the method is also used in internal trade. Also such collections provide more security than open account terms if there is some doubt about a buyer’s financial status.

Задание 23. Прочитайте специальный текст и перескажите его содержание на английском языке: