11 eng104-bai 7-v1.0

UNIT OBJECTIVES - MỤC TIÊU

DURATION (6 periods) - THỜI LƯỢNG HỌC (6 TIẾT)

• Provide students with the language and knowledge related to various banking activities, maintypes of banks and the functions of a central banks.

Cung cấp cho sinh viên vốn ngôn ngữ và kiến thức liên quan đến các hoạt động chính của ngânhàng, các loại hình ngân hàng chủ yếu và các chức năng cơ bản của ngân hàng trung ương.

• Provide students with the way to write a basuness plan.

Cung cấp cho sinh viên phương pháp viết một bản kế hoạch kinh doanh.

• At the end of this unit, students will be able to talk and write about the activities and functionsof central banks and other types of banks as well as to make a persuasive business plan.

Kết thúc bài học này, học sinh có thể nói và viết về các hoạt động và chức năng của ngân hàngtrung ương và các loại ngân hàng khác cũng như phương thức viết một bản kế hoạch kinhdoanh thuyết phục để được nhận vốn vay từ ngân hàng.

In this unit, we are going to learn the language and knowledgerelated to variousbanking activities, main types of banks and thefunctions of a central bank.

Trong bài học này, chúng ta sẽ học về ngôn ngữ và kiến thứcliên quan tới các hoạt động của ngân hàng, các loại hình ngânhàng cơ bản và chức năng của ngân hàng trung ương.

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THE CENTRAL BANKSAND OTHER TYPES OF BANKS

Unit 7: The central banks and other types of banks

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Match the terms or expressions in column A with their definition in column B.The suggested time to do this exercise is 10 minutes.

Column A Column B

1 The person to whom a cheque is written. A Bank charges

2 Money provided by a bank to a customer, for an agreed purpose.

B Bank draft

3 A bank which offers a full range of services to individualsand companies.

C Base rate

4 A type of bank with a strong local or regional identity, mainlyused by small, private investors, who get interest on their deposits.

D Clearance

5 An instruction from one bank to another bank asking it tomake a payment to a supplier.

E Commercialbank

6 An agreement that an account can remain in debit up to a certain amount for an agreed time period.

F Loan

7 The time taken from when a cheque is presented to a bank towhen the receiving account is credited.

G Overdraft

8 Fees charged by a bank for services provided. H Payee

9 An instruction from a customer to a bank to make a regularpayment to a creditor. Instructions to alter the dates or thepayments must come from the customer.

I Savings bank

10 A computer printout sent by a bank to a customer, showingrecent activity on his/her account.

J Standing order

11 The lowest level of interest that a bank charges for lendingmoney.

K Statement

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Text A: Read text A below and do exercises 2.1 and 2.2 below. The suggestedtime for reading the text and completing the exercises is 30 minutes.

TYPES OF BANKS

Abank is a financial institution whose primary activity is toact as a payment agent for customers and to borrow and

lend money. However, the definition of a bank varies fromcountry to country.

Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited tocustomers' current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, EFTPOS, and ATM.

Banks borrow money by accepting funds deposited on current account, accepting term deposits and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current account, by making installment loans, and byinvesting in marketable debt securities and other forms of lending.

Banks provide almost all payment services, and a bank account is considered indispensableby most businesses, individuals and governments.

Many other financial activities were added over time. For example banks are important players in financial

markets and offer financial services such as investmentfunds. In some countries such as Germany, banks are theprimary owners of industrial corporations while in othercountries such as the United States banks are prohibitedfrom owning non-financial companies. In France "Bancas-surance" is highly present, as most banks offer insuranceservices (and now real estate services) to their clients.

Banks' activities can be divided into retail banking, dealing directly with individuals andsmall businesses; business banking, providing services to mid-market business; corporatebanking, directed at large business entities; private banking, providing wealth managementservices to High Net Worth Individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profits.

The most common type of retail banks is a commercial bank. “Commercial bank” is the termused for a normal bank to distinguish it from an investment bank. After the Great Depressionin the US in the 1930s, the U.S. Congress required that commercial banks only engage inbanking activities, whereas investment banks were limited to capital market activities. Sincethe two no longer have to be under separate ownership, some use the term "commercial bank"to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses.

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In Europe, savings banks take their roots in the 19th orsometimes even 18th century. Their original objective was

to provide easily accessible savings products to all strata ofthe population. In some countries, savings banks were created on public initiative, while in others socially committed individuals created foundations to put in placethe necessary infrastructure. Nowadays, European savingsbanks have kept their focus on retail banking: payments,savings products, credits and insurances for individuals

or small and medium-sized enterprises. Apart from this retail focus, they also differ fromcommercial banks by their broadly decentralised distribution network, providing local and regional outreach and by their socially responsible approach to business and society.

Jnvestment banks "underwrite" (guarantee the sale of) stock and bond issues, trade for theirown accounts, make markets, and advise corporations on capital markets activities such as

mergers and acquisitions. Merchant banks were traditionally banks which engaged in tradefinancing. The modern definition, however, refers to banks which provide capital to firms in theform of shares rather than loans.

Universal banks, more commonly known as a financial services company, engage in several of these activities. In Europe and Asia, big banks are very diversified groups that, among other services, also distribute insurance, hence the term bancassurance is the term usedto describe the sale of insurance products in a bank. The word is a combination of "banque or bank" and "assurance" signifying that both banking and insurance areprovided by the same corporate entity.

Central banks are normally government owned banks, often charged with quasi-regulatory responsibilities, e.g. supervising commercial banks, or controlling the cash interest rate. Theygenerally provide liquidity to the banking system and act as lender of last resort in event ofa crisis.

Source: http://en.wikipedia.org/wiki/Bank, retrieved on 15 December, 2009.

Answer the following questions

1. What is the definition of a bank?

2. How do banks act as ‘payment agents’?

3. How do banks borrow?

4. In Germany, banks are the primary owners of what?

5. What are the main types of activities of banks?

6. When did the Great Depression happen?

7. What is the original purpose of a savings bank?

8. What is the meaning of ‘underwriting stock and bond issues’?

9. What is the term ‘bancassurance’?

10. In the event of a crisis, what do central banks do?

2.1

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According to text A, which of the following sentences are true (T) or false (F).Correct the false information

Text B: Read text B and do exercise 2.3, 2.4 below. The suggested time for readingthe text and completing the exercises is 30 minutes.

THE CENTRAL BANK

The central bank

The central bank has been described as "the lender oflast resort", which means that it is responsible for

providing its economy with funds when commercialbanks cannot cover a supply shortage. However, the primary goal of central banks is to provide their countries'currencies with price stability by controlling inflation. Acentral bank also acts as the regulatory authority of acountry's monetary policy and is the sole provider andprinter of notes and coins in circulation. Time has proventhat the central bank can best function in these capacities by remaining independent fromgovernment fiscal policy and therefore uninfluenced by the political concerns of any regime.

Today the central bank is government owned but separate from the country's ministry of finance. Although the central bank is frequently termed the "government's bank" because it handles the buying and selling of government bonds and other instruments, political

Questions T/F

1. The definition of a bank is the same in every country.

2. Many people and businesses think that a bank account is not necessary.

3. In the US, and some other countries, banks are prohibited from owning non-financial companies.

4. Banks provide corporate banking services to every company.

5. Investment banking relates to banks’ activities on the financial market.

6. A commercial bank and an investment bank always have to be under separate owners.

7. The modern European savings banks only focus on providing savings products to individuals and enterprises.

8. The modern merchant banks provide capital to firms.

9. In Europe and Asia, big universal banks are very diversified, they engage inmany types of activities.

10. Central banks act as lender of last resort when a crisis occurs.

2.2

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decisions should not influence central bank operations. Of course, the nature of the relationship between the central bank and the ruling regime varies from country to countryand continues to evolve with time. To ensure the stability of a country's currency, the centralbank should be the regulator and authority in the banking and monetary systems.

How the Bank Influences an Economy

Acentral bank can be said to have two main kinds of functions: (1) macroeconomic whenregulating inflation and price stability and (2) microeconomic when functioning as a

lender of last resort.

Macroeconomic Influences

As it is responsible for price stability, the central bank mustregulate the level of inflation by controlling money

supplies by means of monetary policy. The central bank performs open market transactions that either inject the market with liquidity or absorb extra funds, directly affectingthe level of inflation. To increase the amount of money in circulation and decrease the interest rate (cost) for borrowing,the central bank can buy government bonds, bills, or othergovernment-issued notes. This buying can, however, also leadto higher inflation. When it needs to absorb money to reduceinflation, the central bank will sell government bonds on the open market, which increasesthe interest rate and discourages borrowing. Open market operations are the key means bywhich a central bank controls inflation, money supply, and price stability.

Microeconomic Influences

The establishment of central banks as lender of last resort has pushed the need for theirfreedom from commercial banking. A commercial bank offers funds to clients on a first

come, first serve basis. If the commercial bank does not have enough liquidity to meet itsclients' demands (commercial banks typically do not hold reserves equal to the needs of theentire market), the commercial bank can turn to the central bank to borrow additional funds.This provides the system with stability in an objective way; central banks cannot favor anyparticular commercial bank. As such, many central banks will hold commercial-bank reservesthat are based on a ratio of each commercial bank's deposits. Thus, a central bank may requireall commercial banks to keep, for example, a 1:10 reserve/deposit ratio. Enforcing a policyof commercial bank reserves functions as another means to control money supply in the market. Not all central banks, however, require commercial banks to deposit reserves. TheUnited Kingdom, for example, does not have this policy while the United States does.

The rate at which commercial banks and other lending facilities can borrow short-term fundsfrom the central bank is called the discount rate (which is set by the central bank and providesa base rate for interest rates). It has been argued that, for open market transactions to becomemore efficient, the discount rate should keep the banks from perpetual borrowing, whichwould disrupt the market's money supply and the central bank's monetary policy. By borrowing too much, the commercial bank will be circulating more money in the system.Use of the discount rate can be restricted by making it unattractive when used repeatedly.

Source: www.investopedia.com/printable.asp?a=/articles/03/050703.asp

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2.3

2.4

act fix implement

issue control function

influence supervise

assets cash interestliquid maturity reserve

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Read text B and complete these sentences about Central Banks using the wordsin the box

Central Banks, such as the Bank of England, the Federal Reserve Board in the US, and theBundesbank in Germany:

1. ................. as banks for the government and for other banks.

2. ................. monetary policy – either the government’s, as in Britain, or their own, if theyare independent, as in Germany and the USA.

3. ................. the money supply, measured by different aggregates such as M0, M1, M2, M3, etc.

4. ................. the minimum interest rate.

5. ................. as lender of last resort to commercial banks with liquidity problems.

6. ................. coins and bank notes.

7. ................. (floating) exchange rates by intervening in foreign exchange markets.

8. ................. the banking system.

Complete the paragraph using the words in the box

Because a commercial bank can lend most of the money deposited with it to other borrowers,

who in turn may lend it to another borrower, each sum of money deposited in a bank is

multiplied several times. To ensure the safety of the banking system, central banks impose

(1)................. requirements, obliging commercial banks to deposit a certain amount of money

with the central bank at zero (2) ................. . Central banks in different countries also impose

different ‘prudential ratios’ on commercial banks. These are ratios between deposits and

liquid (3) ................. that are considered sufficient to meet demands for (4) ................. .

(A bank’s assets are its loans, which should, in theory, all be paid back one day, and its

liabilities are the customers’ deposits, which can all be withdrawn one day.) For example,

a bank’s capital ratio is between its capital and reserves on the one hand, and its total assets

on the other. The reserve asset ratio is between deposits with a (5)................. of under two

years, called ‘eligible liabilities,’ and reserve assets, which include cash and assets that

are (6)................. – i.e. quickly convertible into cash – such as reserve deposits held by the

central bank, and securities such as treasury bills.


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Mary Ann is an economics research student, specializing in monetary policy. You will hearher outlining the functions of a central bank, and discussing whether it should be independ-ent from the government, and run by bankers, or under the control of the government.

Listening 1

A. Listen to Part One of the interview TWICE, about the functions of a central

bank, and fill in each gap with one phrase or expression. You have 10 minutes to

complete your answer

The first one is actually to implement monetary policy. There areroughly three ways to do it. First, (1).............................., whichmeans limiting, upwards or downwards, the fluctuations of the interest rate. The second way to implement monetary policy issimply (2)......................– coins, banknotes. The third one which is a bit more modern, is those (3).............................., which are simply buying and selling government bonds to and from commercial banks.

So that was the first main task of a central bank. The second one is (4).............................., I would say. [......]

Third main task, yes, (5).............................., I would say – make sure that the commercialbanks have enough liquidities, for instance, to avoid any bank run. [......]

The fourth main task of the central bank would be to (6).............................., in case, actually,one of these commercial banks goes bankrupt and the investors, the people putting money inthe bank, have to get back their money.

B. Read the six sentences below, which also summarize central banking functions, but

slightly differently, and match them up with the six expression you have written in

3.1.1. You have 5 minutes to complete your answers

A. controlling the amount of banknotes in circulation

B. establishing maximum and minimum lending rates, thereby controlling the credit system

C. ensuring that banks have a sufficient liquidity ratio to allow customers to withdraw theirdeposits when they want

D. intervening on foreign exchange markets, buying or selling large amounts of the nationalcurrency, to prevent major fluctuations

E. lending money to a commercial bank in danger of going bankrupt

F. selling government bonds to commercial banks or buying them back, in order to alter theamount of credit the banks can offer (and thereby alter the money supply).

3.1

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Listening 2

A. Listen to Part Two of the interview TWICE and answer the following question. You

have 5 minutes to complete your answer.

What is Mary Ann opinion concerning central bank independence, and why?

..........................................................................................................................................................................

..........................................................................................................................................................................

..........................................................................................................................................................................

B. Now look at the following statements. Listen to the extract again, and decide whether

the statements are TRUE or FALSE. Correct them if they are false. The suggested

time to complete your answers is 10 minutes

1. Mary Ann says that governments tend to increase the money supply in the months beforean election, which helps reduce unemployment

2. Mary says that the central bank should be the branch of the government that implementsmonetary policy.

3. Mary says that the central bank should be the branch of the government that implementsbudgetary policy.

4. Mary suggests that governments always have a budget deficit.

5. Mary says that there should be a limit to the central bank’s independence.

Fill in each blank in the text with a correct word or phrase. Choose from the followinglist. Use each item once only. The suggested time to do this exercise is 15 minutes

Banks offer many services to businesses and their customers. Here are some of the most common:

Many people now have a card which enables them to (1) ……………. money form a (2)……..…. You need your card into the machine and key in your PIN (personal identificationnumber) and the amount of money you want. If you have enough in your account, the moneyrequested will be (3) ……………. to you up to a daily limit. Your account is automatically(4) ……………. for the amount you have drawn out.

Provided you have a sound (5) …………. ou can get a credit card from a bank and other(6) ……………. To obtain goods or services, you present your card and sign a specialvoucher. When it receives the voucher, the credit card company pays the trader (less a


4.1

3.2

commission issued statement

debited outstanding withdraw

in full salaries banker’s draft

(or bank draft)

financial institutions credit rating credit transfer

interest slip cash dispenser

standing order

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(7) …………….) and then sends you a monthly (8) ……………. Depending on the typeof card you have, you will either have to pay (9) ……………. or be able to pay part of whatis owed and pay (10) ……………. on the balance left (11) …………….

If you need to make fixed payments at regular intervals, e.g. for insurance premiums, you canarrange a (12) ……………. (sometimes known as a banker’s order) so that the bank will dothis for you.

If you have several bills to pay, you can do this by (13) ……………. You write one cherubfor the total sum involved, fill in a (14) ……………. for each bill and hand every thing tothe bank cashier.

The transfer system is also used by employers to pay (15) directly into employee’s bank accounts.

If you are dealing with a supplier for the first time, a (16) ……………. may be used as payment. This is a cherub guarantee by a bank and therefore it is not likely to ‘bounce’

Study the information in the following bank statement

Now complete the passage with the words in the box. The suggested time to dothis exercise is 15 minutes.

credit balance debit card payment debit

transactions cheque cash account deposit

4.2

MEDWAY BANKSTATEMENT OF ACCOUNT CLAPHAM HIGH STREET

LONDON SW4CURRENT ACCOUNT

MS JANE SADLER

75 EBURY MEWS

LONDON SW5

ACCOUNT NUMBER

STATEMENT NUMBER

STATEMENT DATE

02–26–56

54863472

01

1 MAR 1993

DATE DETAILS DEBITS CREDITS BALANCE

28 JAN

20 FEB

22 FEB

23 FEB

26 FEB

OPENING DEPOSIT CSH

CHEQUE 000001 CHQ

AUTOBANK AB69301

OXFORD ST CSH

WATERSTONE AND CO. DD

BENNET AND SONS TR

53.25

60.00

33.50

300.00

802.20

300.00

246.75

186.75

153.25

955.45

ABBREVIATIONS: CHQ – CHEQUE, CSH – CASH, DD – DIRECT DEBIT, TR – TRANSFER

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Jane Sadler opened her (1)............................ with the Medway Bank on 28th January 1993,with a cash (2)............................ of £300. On 15th February she wrote a (3)............................for £53.25 and this appeared as a (4)............................ on the bank statement on 20th February. On 22nd February she took out £60 in (5)............................ from a cashpoint machine. On the following day the bank debited her account by £33.50 for a (6)...........................she had made using her (7)............................. Her monthly salary was paid directly into heraccount and this appeared as a (8)............................ for £802.20 on 26th February. There wereno further (9)............................ on her account and she finished the month with a(10)............................ of £955.45.

Role play

Negotiating a bank loan

Work in pairs (Student A and Student B). Student A and student B should look at the in-formation for each of them carefully to understand their role before starting the role play.

Student A

You are an experienced journalist and you want to create a new magazine entitled “The Security Gazette”. The magazine will be aimed at professionals from the security industry. Itwill cover all subjects related to the protection of people and property and will be distributednationally. The target audience consists of the employees of private companies in this sector, which is growing at 10% annually. It is also designed to appeal to public sector organizations such as the police, and also to the general public.

* Use the information below to help you to prepare your negotiation, remember that youshould convince the banking representative that you have:

• The right character

• A serious commitment to the business

• Enough collateral or security to use as a guarantee.

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Sales: euros

Sales ……………………………………………….. 315,000

Cost of sales ………………………………………... 63,500

Gross margin ……………………………………….. 251,500

Operating expenses:

Advertising ………………………………………….. 15,400

Travel ………………………………………………... 10,000

Public relations ………………………………………. 10,000

Payroll ………………………………………………... 74,800

Leased equipment ……………………………………… 6,000

Utilities ………………………………………………… 6,000

Insurance ……………………………………………….. 9,000

Rent ……………………………………………………. 12,600

Logo, concept design ………………………………….. 10,300

Miscellaneous …………………………………………… 3,500

Total operating expenses ………………………………. 157,600

Profit before taxes ……………………………………… 93,900

Personal investment …………………………………….. 70,000

Collateral / security:

Own house ………………………………………………. 95,000

Credit history:

No previous business loan, only mortgage for house and consumer credit.

Student B

You are a member of the small business loan department of a bank. You have a first meeting with abusiness person who is interested in applying for a loanfrom your bank in order to set up a business. Evaluatethe risks involved in the project that he / she presentsand decide whether the person has the right profile to succeed as an entrepreneur. His means that you mustbe convinced that he / she has:

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Business plan

Product description: Full colour magazine, A4 format, 80 pages

Market size: Potential - 7,000 issues per month

Competition: Fragmented; more specialist publications

Sale forecast: 84,000 issues p.a. @ 3.75 euros = 315,000 euros

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• The right character

• A serious commitment to the business

• The capacity to manage it

• Enough collateral or security to use as a guarantee.

Remember that 33% of the total project cost should be covered by personal investment andthat four out of five new businesses fail within the first three years!

Business loan table

10 years

20 years

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Interest

rate10,000 euro 25,000 euro 50,000 euro 10,000 euro

3% p.a.Annual repayment 1,172.31 2,930.76 5,861.53 11,723.05

Total cost 11,723.05 29,307.63 58,615.25 117,230.51


Total cost 12,950.46 32,376.14 64,752.29 129,504.57


Total cost 14,237.75 35,594.38 71,188.75 142,377.50

Interest

rate10,000 euro 25,000 euro 50,000 euro 10,000 euro

3% p.a.

Annual repayment 672.16 1,680.39 3,360.79 6,721.57

Total cost 13,443.14 33,607.85 67,215.71 134,431.42

5% p.a.

Annual repayment 802.43 2,006.06 4,012.13 8,024.26

Total cost 16,048.52 40,121.29 80,242.59 160,485.17

7% p.a.

Annual repayment 943.93 2.359.82 4,719.65 9,439.29

Total cost 18,878.59 47,196.46 94,392.93 188,785.85

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Many banks offer a specialized service to people wishing to set up their own business. This may include advice onvarious aspects of starting and running a business, as wellas financial assistance in the form of a loan.Work in pairs/small groups. You have decided to set upyour own business together and have approached the bankfor advice. They have asked you to prepare a business plan giving information about your proposed business. The listbelow shows some of the many details you will be required

to give. With your partner(s), agree what type of business you are going to set up, and thendiscuss each of the points listed in the business plan. When you have finalized all the detailsof your business, prepare a written plan to give to the bank.

BUSINESS PLAN FORM1. Details of the businessName of businessType businessFormat (Limited company, partnership etc.)2. Personal detailsRelevant work experience3. PesonnelNumber of people/job function4. Product/ServiceDescription5. MarketDescribe your marketWho are your customers?Is your market grooving, static or in decline?Who are the main competitors?What are the advantages of your product or service over the competition?6. MarketingWhat sort of marketing or advertising do you intend to do?7. Premises/Machinery/VehiclesWhere do you intend to locate the business and why?What sort and size of premises will you need?What machinery/vehicles do you require?8. ObjectivesWhat objectives do you have for the business?Short-termMedium-termLong-term

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English terms Vietnamese equivalents

A

- Advance

B

- Banknote

- Bond

- Bill

C

- Current account, (checking account)

- Capital market

D

- Debt securities

- Deposit account, (savings account)

- Discount rate

E

- EFTPOS

F

- Financial institution

- Financial market

- First come, first served basis

- Fiscal policy

G

- Government bond

- Great Depression

- Government bonds

H

- High Net Worth individuals

- Khoản ứng trước/Tiền tạm ứng

- Giấy nợ ngân hàng

- Trái phiếu

- Trái phiếu kho bạc trung hạn

- Tài khoản vãng lai, tài khoản hiện thời, tài khoản séc

- Thị trường vốn

- Chứng khoán nợ

- Tài khoản tiết kiệm

- Tỉ lệ/mức chiết khấu

- Chuyển tiền bằng điện tử tại điểm bán

- Định chế tài chính

- Thị trường tài chính

- Cơ sở ai đến trước phục vụ trước

- Chính sách tài khóa

- Trái phiếu chính phủ

- Cuộc Đại suy thoái (ở Mỹ)

- Trái phiếu chính phủ

- Các cá nhân giàu có

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I

- Investment fund

- Investment banking

L

- Liquidity

- Lender of last resort

M

- Money market

- Mergers and acquisitions (M&A)

- Macroeconomic

- Microeconomic

- Money supplies

- Money in circulation

- Merchant bank

- Monetary policy

N

- Note

O

- Open market transactions

S

- Savings bank

R

- Reserves

- Retail banking

- Regulator and authority

T

- Term deposit

- Telegraphic transfer

U

- Underwrite

- Quỹ đầu tư

- Nghiệp vụ ngân hàng đầu tư

- Khả năng thanh khoản/Tính lỏng

- Người cho vay cuối cùng, người cho vay cứu cánh

- Thị trường tiền tệ

- Sáp nhập và hợp nhất

- Kinh tế vĩ mô

- Kinh tế vi mô

- Lượng cung tiền

- Tiền trong lưu thông

- Ngân hàng thương nghiệp

- Chính sách tiền tệ

- Tín phiếu ngắn hạn

- Các giao dịch trên thị trường mở

- Ngân hàng tiết kiệm

- Quỹ dự trữ

- Nghiệp vụ ngân hàng bán lẻ

- Cơ quan quản lý và điều tiết

- Khoản tiền gửi có kỳ hạn

- Chuyển tiền bằng điện tử

- Bảo lãnh phát hành chứng khoán

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REVISION B

CONTENTS

Financial markets

Complete each sentence by writing in the gap a word formed by the verb givenin brackets ( )

1. This bank is one of London’s oldest ………………….institution. (finance)

2. We deal mainly in commodities and ……………………. . (derive)

3. We have about 60 ……………….buying and spelling stocks. (deal)

4. The………………of the company raised £ 1.4 million. (float)

5. A……………..wants to make a quick profit. (speculate)

6. I invest in………………………….-mainly stocks and bonds. (secure)

Choose the best word to fill each gap from the alternatives given below. Put a circle around the letter, A, B or C, of the word you choose.

Pegasus Software looks like a good buy. The company was (1)……………..last year itsshares are (2)……………..on the London (3)………… .When they were (4) …………, they were valued at 60 pence. Lots of (5)………..were attracted by the company’s strongsales figures. Now the (6)…………………is worth 92 pence.

1. A bonded B floated C raised

2 . A quoted B sighed C noted

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UNIT OBJECTIVES - MỤC TIÊU

• Review the topics introduced in Unit 5, Unit 6 and Unit 7 through reading and vocabulary exercises.

Ôn tập các chủ đề đã được giới thiệu trong bài 5, bài 6 và bài 7 thông qua các bài đọc và từ vựng.

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3. A bourse B city C Exchange

4. A issued B started C distributed

5. A auditors B creditors C investors

6. A trade B stock C deal

Choose the word or place which best completes each sentence

1. ………………, is the general term used for all types of stocks and shares,

a) Gilt-edged b) Investment c) Securities

2. A………………… is an organization which defends the wages and rights of the workerswho belong it,

a) pension scheme b) life assurance c) trade union

3. The part of the Stock Exchange where shares are bought and sold is called the ……………

a) floor b) market place c) screen

4. ……………………advise their clients of what investments to make and act as agents inbuying and selling shares,

a) Wholesalers b) Counterparts c) Brokers

5. To …………………a price means to give the price a which one is prepared to buy or sella share,

a) act b) quote c) undertake

6. A business deal done between two people is known as a(n)…………………,

a) instruction b) transaction c) membership

7. The total wealth of a company in terms of money and property is called……………

a) funds b) capital c) charges

8. The information contained in the SEAQ system is a constantly ……………, to keep upwith change in the market,

a) automated b) updated c) trades

Complete each sentence with the correct form of the words on the left

1. to save He invested most of his …………………, in the Stock Exchange,

2. to invest My stockbroker advised me to make several safe………………,

3. to compete …………………, on the personal computer market has increased consider

ably over the past few years,

4. partnership Both …………, in the business agree that hard work is the key to their success,

5. to quote The price given for buying and selling shares on the Stock Exchange are

known as, ……………

6. member Trade union ……………… has declined in the United States.

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Personal finance and banking

Decide which of the alternatives (A-H) each speaker is talking about. Write the letter of your answer in the box at the end of the sentence. There are two alternatives that you don’t have to use

A. credit card B. current account C. overdraft D. joint account

E. debit card F. deposit account G. mortgage H. bank statement

Read the following statements and do the follow-up exercises

A. Traditional banking

‘I’m Lisa. I have an account at my local branch of one of thebig high-street banks. I have a current account for writingcheque, paying by debit card and paying bills. It’s a join account with my husband. Normally, we’re in the black, butsometimes we spend more money than we have in the accountand we go into the red. This overdraft is agreed by the bankup to a maximum of £500, but we pay quite a high interestrate on it.

I also have a deposit account or saving account for keepingmoney longer term. This account pays us interest (but notvery much, especially after tax!).

We have a credit card with the same bank too. Buying with plastic is very convenient. We payoff what we spend each month, so we don’t pay interest. The interest rate is even higher thanfor overdrafts!

Like many British people, we have a mortgage, a loan to buy our house.’

B. New ways of banking

‘My name’s Kevin. I wasn’t happy with my bank. There was always a queue, and on the bankstatement that they sent each month they took money out of my account for banking chargesthat they never explained. So I moved to a bank that offers telephone banking. I can phonethem any time to check my account balance (the amount I have in my account), transfermoney to other accounts and pay bills.

Now they also offer Internet banking. I can manage my account sitting at my computer at home.

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1. ‘You get own cheque book so, for example, you can pay your bill by post.’

2. ‘We borrowed £80,000 from the building society to buy our house.’

3. ‘I do all my shopping using plastic and then I pay when I get my monthlystatement.’

4. ‘It’s in both our names so we can both get money out when we want.’

5. ‘We are nearly £200 in the red and we are paying a lot of interest on it.’

6. ‘We’ve got about £2,000 saved and the bank pays about 4% interest on it.’

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Look at part A and say if these statements are true or false

1. You talk about local ‘agency’ of a high-street bank.

2. Americans refer to current accounts as check accounts.

3. A joint account is held by more than one person.

4. If you put 10,000 euros into a new account and spend 11,000 euros, you have an overdraft of 1,000 euros and you are 1,000 euros in the red.

5. An account for saving money is called a safe account.

6. An account that pays a lot of interest a high interest rate.

7. If you pay for something with a credit card, you can say, informally, that you useplastic to pay for it.

8. If you pay the complete amount that you owe on a credit card, you pay it down.

Kevin is phoning his bank. What expressions in A and B could replace each ofthe underlined items?

1. I want to swap £500 from my savings account to my ordinary account, because I don’twant to have the situation where I’ve spent more than I’ve put in.

2. How much is in my saving account? What’s the amount in there at the moment?

3. On the savings account, what’s the percentage you pay to savers every year?

4. How much extra money have you added to my savings account in the last three months?

5. On the last list of the all the money going out of and coming into the account, there’san amount that you’re taken off the account that I don’t understand.

Company Finance and Banking

Read the text below and do the following exercises

Business accounts are more complicated to open than personalaccounts. Clearly, a business was formed to carry on certainactivities. The bank is interested in what kind of business it is.If the business has some legal form such as a limited company,the bank need to have documents to show how it was set up incase there is some restriction on the drawing of the cheque.

There may be many people working in the business and thebank needs to know the names and signatures of the owners of the business and who has theright to sign cheque. Sometimes the company may want two signatures on each cherub.

Banks need information on how limited companies were formed, because the formation cabaffect borrowing or the writing of cheque. But they do not want details of how non-limitedcompanies such as partnerships or sole traders were formed. On the other hand some banksdo try to collect as much information about the owners of the business as possible at the account opening stage. Whole sections of the account opening form ask for details ofownership, life insurance policies and pension schemes. This information given by customersonly if they wish. They may refuse to give it and provide only the information needed to openan account.

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Naturally there are many services in addition to those offered

to personal customers that can be offered to businesses. The

type of service depends on the type and size of business and

it is the information on the account opening form that helps

banks to sell further services to customers later on. So when

a firm opens a business account, many banks use the opportu-

nity to collect information about the customers and to find

out what services they need.

How are the following ideas expressed or summarized in the text?

a) Its financial freedom may be limited. (10 words, paragraph 1)

b) The people with authority (4 words, paragraph 2)

c) The way the company was set up (2 words, paragraph 3)

d) Its financial freedom may be limited (10 words, paragraph 3)

e) Have an influence on (1 word, lines 10-15)

f) Sole traders and partnerships (2 words, lines 10-15)

g) Bank accounts, homes, life insurance policies and pensions (1 word, lines 15-20)

h) Voluntarily (3 words, lines 15-20)

Find one word from the reading passage to complete each sentence.

(Verbs should be used in the correct form.)

a) At the Evening Institute several ……………. are available – literary clubs, indoor

sports, cookery and art classes, for example. (paragraph 1)

b) The journey was very …………….. They had to change from taxi to bus and to train

several times. (paragraph 1)

c) The valley was ……………. by a glacier many millions of years ago. (paragraph 3)

d) There are important taxes on ……………… goods. (paragraph 1)

e) There are ………………… on carrying guns on aero planes. (paragraph 1)

f) In 1959 he crossed the border without any travel ……………….. (paragraph 1)

g) Are you the …………….. of this car? (paragraph 2)

h) Interest rates …………….. business. (paragraph 3)

i) Privatization means the transfer of assets from state ………….........….. to private

……………….. (paragraph 3)

j) He …………….. to go into the army and was sent to prison. (paragraph 3)

k) In 1989 many people took the ……………… to visit foreign countries they could not

visit before. (paragraph 4)

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Match the words in column B with their corresponding definitions in column A

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A B

1. A person or organization to whom money is owed (for goods or services rendered, or as repayment of loan)

a. Standing order

2. An instruction from a customer to a bank to make a regular payment to a creditor. Instructions to alter the dates or the payments must come from the customer

b. Commercial bank

3. A proportion of the annual profits of a limited company, paid toshareholders.

c. Overdraft

4. An instruction from one bank to another bank asking it to make apayment to a supplier.

d. Dividend

5. A bank which offers a full range of services to individuals andcompanies.

e. Expertise

6. An agreement that an account can remain in debit up to a certainamount for an agreed time period.

f. Payee

7. To sell at the possessions of a bankrupt business g. Invoice

8. A document which lists the goods you have bought and tells youhow much you must pay for them

h. Bank charges

9. To place money in a bank account i. Deposit

10. Specialized knowledge j. Creditor

11. Fees charged by a bank for services provided. k. Underwrite

12. To guarantee to buy an entire new share issue, if no one elsewants it.

l. Liquidate

13. A type of bank with a strong local or regional identity, mainlyused by small, private investors, who get interest on their deposits.

m. Savings bank

14. The person to whom a cheque is written n. Bankdraft

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11 eng104-bai 7-v1.0

Education

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