VII Международная студенческая научная конференция Студенческий научный форум - 2015

The paper is dedicated to discussion the problem of Banks, Banking, Money and its function, banking system. The article says about the role of banks, their history, the money and the origin of the word. The document reveals such concepts as the central bank and the commercial and banking system described in the Isle of Russia. The paper is divided into the following items:

1. Banks and Bankin

2. The development of banking system

3. The business of banking

4. Industrial finance

5. Responsibilities of central banks

6. THE STRUCTURE OF MODERN BANKING SYSTEMS

The paper and the Power Point Presentation may be used in teaching students of colleges and universities, in the classroom, in study groups, in the educational process for training managers and economists. Presentation on the banks and the money was used in the classroom for business English in VlSU group MN-112.

Text.

A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank links customers that have capital deficits and customers with capital surpluses.

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, perhaps, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered money.

Banking in the modern sense of the word can be traced to medieval and early Renaissance Italy, to the rich cities in the north like Florence, Venice and Genoa. The Bardi and Peruzzi families dominated banking in 14th century Florence, establishing branches in many other parts of Europe. Perhaps the most famous Italian bank was the Medici bank, set up by Giovanni Medici in 1397. The earliest known state deposit bank, Banco di San Giorgio (Bank of St. George), was founded in 1407 at Genoa, Italy.

The word bank was borrowed in Middle English from Middle French banque, from Old Italian banca, from Old High German banc, bank "bench, counter". Benches were used as desks or exchange counters during the Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths

A commercial banker

-is a dealer in money and in substitutes for money, such as checks or bills of exchange

-is borrowing from individuals (firms and occasionally governments)- receiving “deposits” from them

-makes loans or extends credit and also invests in securities.

Central banks

-are often responsible for formulating and implementing monetary and credit policies, usually in cooperation with the government

-lead

FUNCTIONS OF COMMERCIAL BANKS

A bank’s main liabilities are its capital, including reserves and subordinated debt, and deposits. The latter may be from domestic or foreign sources (corporations, firms, private individuals, other banks and even governments). They may be repayable on demand(sight deposits or current accounts) or repayable only after the lapse of a period of time (time, term or fixed deposits and saving deposits).

A bank’s assets include:

• Cash in the form of credit balances with other banks, usually with a central bank

• Liquid assets- money at call and short notice, day-to-day money, short term government paper, commercial bill of exchange; all can be converted readily into cash without risk of substantial lost

• Instruments of securities- medium term and longer term government securities including those of local authorities and in some countries shares in industrial concerns

• Loans and advances made to customers of all kinds

• The bank’s premises, furniture and fitings

An increase in deposits may arise in two ways

When a bank makes a loan, it may transfer the sum to a current account, thus directly creating a new deposit; or it may arrange a line of credit for the borrower upon which he will be permitted to draw checks which were deposited by third parties, likewise create new deposits

An enlargement of government expenditure financed by the Central Bank may occasion a growth in deposits, since claims on the government will be paid into the commercial banks as deposits

The world’s largest banks are located in Europe, the United States and Japan. In most cases they operate in many countries of the world. Because banking is a global industry that does not stop at a country’s borders there must be worldwide agreements. International standards that banks must obey are written down in the Basel accords.

Test:

1)International banking laws are written down in

•  

  • ? the European Central Bank

  • ? the World Bank

  • ? the Basel accords

2) In most countries the government

•  

  • ? lets banks decide how much money they can keep back as cash

  • ? tells banks how much money they can offer as loans

  • ? asks banks to give little interest to customers with savings accounts

3) Investment banks

•  

  • ? let small savers open savings accounts

  • ? do not charge interest

  • ? raise money for companies and businesses

4)During the Great Depression

•  

  • ? the government made banks pay more money than they had

  • ? customers received more interest than ever before

  • ? many banks went bankrup

5) The banking crisis in 2008 was caused by

•  

  • ? the stock market

  • ? housing prices

  • ? developing countries

6) Some banks sell

•  

  • ? houses

  • ? insurance

  • ? ATMs

7)Development banks

•  

  • ? offer mortgages to customers

  • ? help Third World countries

  • ? help customers find the right savings form

8)The Federal Reserve bank is responsible for

•  

  • ? money circulation in the USA

  • ? money circulation worldwide

  • ? money circulation in Europe

9)Banks make a profit when they

•  

  • ? give savers more interest

  • ? give customers more credit cards

  • ? collect more interest from people who take loans

10)If you want to buy a house

•  

  • ? the bank buys the house for you

  • ? the bank offers you a mortgage

  • ? you get stocks from the bank to buy the house

11)Automatic teller machines

•  

  • ? lets customers take up loans

  • ? let customers withdraw cash from their account, even if the bank is closed

  • ? shows customers the rate of interest that banks charge

12)The centre of banking in the Middle Ages was in

•  

  • ? Florence and Venice

  • ? London

  • ? New York

Banking - Fill in the correct words

A bank is a place that works with money. If you want to save your money you can …it in a bank … and get for… it. If you want to buy a house or a … new car a bank offers you athat you can pay back within months or years. Banks also give businesses the money they need to grow and expand.

Today's banks offer their customers a large range of … . They operate ATMs where you canmoney… , even if the bank is closed. A credit card is a piece of plastic that allows you to buy things all over the world. Most banks give you … on how to get the most out of your savings. They deal with …and bonds, some of them even offer …policies.

There are different types of banks. …banks are among the most important. Everyone can open an account or borrow money from them. Investment banks normally do not work with money from …. They help organizations and large businesses …money on the international …markets.

Central banks control the …of money in a certain area. The European Central Bank in Frankfurt is …for the value of the Euro, the Federal …bank controls circulation and the value of the US dollar.

… banks help Third World countries not only with loans but also send … workers and give them technical help.

Сorrect words: account, advice, aid, circulation, commercial, deposit, development, financial, individuals, insurance, interest, loan, raise, reserve, responsible, services, stocks, withdraw.

Bibliography

1. Eisenberg Melvin A. Corporations and Other Business Organizations: Statutes, Rules, Materials and Forms. – Foundation Press, 2011. - P. 2192. - ISBN: 1599419467

2. Kraakman Reinier H. Anatomy of Corporate Law: A Comparative and Functional Approach. - New York: Oxford University Press, 2010. - P. 554. - ISBN 0199260635

3. Lowry, John; Dignam, Alan. Company Law. - New York: Oxford University Press, 2009. - P. 463. - ISBN 0199284466

4. Michael Solomon; Mary Anne Poatsy; Kendall Martin. Better Business. - Boston: Pearson, 2013. - P. 415. - ISBN: 0133059049

5. Steingold Fred. Legal Guide for Starting & Running a Small Business. - Berkeley, California: Nolo, 2011. - P. 464. - ISBN: 1413313817

6. http://www.english-online.at/economy/banks-and-banking/exercises/banking-cloze.htm

7. http://www.english-online.at/economy/banks-and-banking/exercises/banking-cloze.htm

8. http://www.english-online.at/economy/money/money-value-history-functions.htm

9. http://www.english-online.at/economy/banks-and-banking/banks.htm

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