Unit 3: Banking Industry Financial English Unit 3: Revision of Unit 2Revision of Unit 2Revision of...

Unit 3:Unit 3:

Banking IndustryBanking Industry

Financial EnglishFinancial English

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Unit 3:Unit 3:

• Revision of Unit 2

• Overview of Unit 3

• Background information of Unit 3

• Text

• Exercises

• Assignment

Review of Unit 2Review of Unit 2

• Exercises Check-upExercises Check-up

Question & Answer

Sentence Translation

Revision of Unit 2Revision of Unit 2

Question &AnswerQuestion &Answer

1. 1. What are the main advantages financial What are the main advantages financial intermediaries can provide?intermediaries can provide?

2. 2. What are the main reasons some economists What are the main reasons some economists

concerned that financial intermediaries can be a concerned that financial intermediaries can be a

source of shocks to the economy?source of shocks to the economy?

Check-upCheck-up

Answer the following questions according to the text in Unit 3Answer the following questions according to the text in Unit 3

3. What are the three characteristics that most people want 3. What are the three characteristics that most people want

to have in their assets when we look at financial assets?to have in their assets when we look at financial assets?

4.4. What is an asset?What is an asset?

5. 5. What is the “greater-fool” theory?What is the “greater-fool” theory?

Question and AnswerQuestion and Answer

Check-upCheck-up

Key to the questions:Key to the questions:

1.1. Less risky, and liquidity.Less risky, and liquidity.

2.2. First, bank debt serves as money, so disruptions to First, bank debt serves as money, so disruptions to

banks can affect the amount of money in circulation. banks can affect the amount of money in circulation.

Second, financial intermediaries are tied together Second, financial intermediaries are tied together

through chains of debts and assets.through chains of debts and assets.


33. . Low risk, liquid and a high rate of return.Low risk, liquid and a high rate of return.

4.4. An asset is what one owns. An asset is what one owns.

Assets=Net Worth + LiabilitiesAssets=Net Worth + Liabilities

5.5. Trading in financial markets involves not only an Trading in financial markets involves not only an

analysis of the fundamental value of an asset, but also analysis of the fundamental value of an asset, but also

an analysis of how other people will react. If people an analysis of how other people will react. If people

are confident that others will buy the item for more are confident that others will buy the item for more

than they paid for it, then they will buy it even if it has than they paid for it, then they will buy it even if it has

little value to themlittle value to them . .


Translate the following sentences orally

Sentence TranslationSentence Translation

1. 1. Speculation typically involves the lending of money or the Speculation typically involves the lending of money or the

purchase of assets, equity or debt but in a manner that has not purchase of assets, equity or debt but in a manner that has not

been given thorough analysis or is deemed to have low been given thorough analysis or is deemed to have low

margin of safety or a significant risk of the loss of the margin of safety or a significant risk of the loss of the

principal investment. principal investment.

1. 1. Speculation typically involves the lending of money or the Speculation typically involves the lending of money or the

purchase of assets, equity or debt but in a manner that has not purchase of assets, equity or debt but in a manner that has not

been given thorough analysis or is deemed to have low been given thorough analysis or is deemed to have low

margin of safety or a significant risk of the loss of the margin of safety or a significant risk of the loss of the

principal investment. principal investment.

Check-upCheck-up


2. 2. In a financial context, the terms "speculation" and In a financial context, the terms "speculation" and

"investment" are actually quite specific. For instance, "investment" are actually quite specific. For instance,

although the word "investment" is typically used, in a general although the word "investment" is typically used, in a general

sense, to mean any act of placing money in a financial sense, to mean any act of placing money in a financial

vehicle with the intent of producing returns over a period of vehicle with the intent of producing returns over a period of

time, most ventured money—including funds placed in time, most ventured money—including funds placed in

world's stock markets—is actually not investment, but world's stock markets—is actually not investment, but

speculation.speculation.

2. 2. In a financial context, the terms "speculation" and In a financial context, the terms "speculation" and

"investment" are actually quite specific. For instance, "investment" are actually quite specific. For instance,

although the word "investment" is typically used, in a general although the word "investment" is typically used, in a general

sense, to mean any act of placing money in a financial sense, to mean any act of placing money in a financial

vehicle with the intent of producing returns over a period of vehicle with the intent of producing returns over a period of

time, most ventured money—including funds placed in time, most ventured money—including funds placed in

world's stock markets—is actually not investment, but world's stock markets—is actually not investment, but

speculation.speculation.

Check-upCheck-up


3. Financial speculation can involve the buying, holding, 3. Financial speculation can involve the buying, holding,

selling, and short-selling of stocks, bonds, commodities, selling, and short-selling of stocks, bonds, commodities,

currencies, collectibles, real estate, derivatives, or any currencies, collectibles, real estate, derivatives, or any

valuable financial instrument to profit from fluctuations in its valuable financial instrument to profit from fluctuations in its

price, irrespective of its underlying value. price, irrespective of its underlying value.

3. Financial speculation can involve the buying, holding, 3. Financial speculation can involve the buying, holding,

selling, and short-selling of stocks, bonds, commodities, selling, and short-selling of stocks, bonds, commodities,

currencies, collectibles, real estate, derivatives, or any currencies, collectibles, real estate, derivatives, or any

valuable financial instrument to profit from fluctuations in its valuable financial instrument to profit from fluctuations in its

price, irrespective of its underlying value. price, irrespective of its underlying value.

Check-upCheck-up

Sentence Translation—Suggested AnswersSentence Translation—Suggested Answers

1. 最典型的投机行为包括借钱或者购买资产，资产净值

或者负债，但是上述行为并非基于彻底分析的基础之

上，或者被认为安全系数低或者损失本金的风险大。

1. 最典型的投机行为包括借钱或者购买资产，资产净值

或者负债，但是上述行为并非基于彻底分析的基础之

上，或者被认为安全系数低或者损失本金的风险大。


2. 在金融领域中，“投机”和“投资”这两个术语事

实上是很特殊的。举个例子来讲，尽管“投资”这

个单词普遍被人们用来描述任何把货币投到一种金

融工具，以期望在一段时间后获得收益的行为。风

险更大的货币行为—包括投资到世界股市的资金 --

事实上不是一种投资，而是投机行为。

2. 在金融领域中，“投机”和“投资”这两个术语事

实上是很特殊的。举个例子来讲，尽管“投资”这

个单词普遍被人们用来描述任何把货币投到一种金

融工具，以期望在一段时间后获得收益的行为。风

险更大的货币行为—包括投资到世界股市的资金 --

事实上不是一种投资，而是投机行为。


3. 金融投机行为包括不管基本价值而购买、持有、

售出、卖空股票、债券、商品、货币、收藏品、

房地产、金融衍生品或者任何有价值的金融工具，

以期望通过其价格波动获得利润。

3. 金融投机行为包括不管基本价值而购买、持有、

售出、卖空股票、债券、商品、货币、收藏品、

房地产、金融衍生品或者任何有价值的金融工具，

以期望通过其价格波动获得利润。

Overview of Unit 3Overview of Unit 3

本章旨在本章旨在追溯银行业的起源，介绍不同的银行种类以及银行的业务渠道以及各项职能。通过学习本文，应对银行业有总体了解，并着重了解银行的分类以及主要的银行职能。

本章重点难点本章重点难点银行业起源

银行的分类

银行的主要业务渠道

银行的经济作用

本章旨在本章旨在追溯银行业的起源，介绍不同的银行种类以及银行的业务渠道以及各项职能。通过学习本文，应对银行业有总体了解，并着重了解银行的分类以及主要的银行职能。

本章重点难点本章重点难点银行业起源

银行的分类

银行的主要业务渠道

银行的经济作用

Overview of Unit 3Overview of Unit 3

After learning this unit, you should acquire:

The origin of banks

Different types of banks

Main channels banks offer to access their banking and other services

Economic functions of banks

美国联邦储备系统美国联邦储备系统 (Federal Rese(Federal Rese

rve Systemrve System ，简称，简称 Fed)Fed) 负责履行美国负责履行美国的中央银行的职责，这个系统是根据的中央银行的职责，这个系统是根据《联邦储备法》《联邦储备法》 (Federal Reserve Act)(Federal Reserve Act)

于于 19131913 年成立的。这个系统主要由联年成立的。这个系统主要由联邦储备委员会，联邦储备银行及联邦邦储备委员会，联邦储备银行及联邦公开市场委员会等组成。公开市场委员会等组成。

Background InformationBackground Information


美联储主要职责美联储主要职责：： 11 、制定并负责实施有关的货币政策；、制定并负责实施有关的货币政策； 22 、对银行机构实行监管，并保护消费者合法的信贷权利；、对银行机构实行监管，并保护消费者合法的信贷权利； 33 、维持金融系统的稳定；、维持金融系统的稳定； 44 、向美国政府，公众，金融机构，外国机构等提供可靠的、向美国政府，公众，金融机构，外国机构等提供可靠的金融服务。金融服务。美联储其它职责：美联储其它职责：11 、经济教育、经济教育 22 、社会超越、社会超越 33 、经济研究、经济研究

美联储主要职责美联储主要职责：： 11 、制定并负责实施有关的货币政策；、制定并负责实施有关的货币政策； 22 、对银行机构实行监管，并保护消费者合法的信贷权利；、对银行机构实行监管，并保护消费者合法的信贷权利； 33 、维持金融系统的稳定；、维持金融系统的稳定； 44 、向美国政府，公众，金融机构，外国机构等提供可靠的、向美国政府，公众，金融机构，外国机构等提供可靠的金融服务。金融服务。美联储其它职责：美联储其它职责：11 、经济教育、经济教育 22 、社会超越、社会超越 33 、经济研究、经济研究


大萧条（大萧条（ The Great DepressionThe Great Depression ））是指是指 19291929 年至年至 19331933

年之间全球性的经济大衰退。大萧条的影响比历史上任何年之间全球性的经济大衰退。大萧条的影响比历史上任何

一次经济衰退都要来得深远。一次经济衰退都要来得深远。

大萧条（大萧条（ The Great DepressionThe Great Depression ））是指是指 19291929 年至年至 19331933

年之间全球性的经济大衰退。大萧条的影响比历史上任何年之间全球性的经济大衰退。大萧条的影响比历史上任何

一次经济衰退都要来得深远。一次经济衰退都要来得深远。


大萧条的普遍影响导致了大萧条的普遍影响导致了：：

11 、提高了政府对经济的政策参与性，即凯恩斯主义；、提高了政府对经济的政策参与性，即凯恩斯主义；

22 、以关税的形式强化了经济的民族主义；、以关税的形式强化了经济的民族主义；

33 、激起了作为共产主义替代物的浪漫、激起了作为共产主义替代物的浪漫 -- 极权主义政治运动极权主义政治运动（如德国纳粹）。大萧条相对于其他单一原因来说是最能（如德国纳粹）。大萧条相对于其他单一原因来说是最能够解释为什么在够解释为什么在 19321932 年到年到 19381938 年之间欧洲大陆和拉丁美年之间欧洲大陆和拉丁美洲各国政治逐渐右翼化。洲各国政治逐渐右翼化。

44 、阿道夫、阿道夫 ·· 希特勒、贝尼托希特勒、贝尼托 ·· 墨索里尼等独裁者的崛起，间墨索里尼等独裁者的崛起，间接造成第二次世界大战爆发接造成第二次世界大战爆发。。

大萧条的普遍影响导致了大萧条的普遍影响导致了：：

11 、提高了政府对经济的政策参与性，即凯恩斯主义；、提高了政府对经济的政策参与性，即凯恩斯主义；

22 、以关税的形式强化了经济的民族主义；、以关税的形式强化了经济的民族主义；

33 、激起了作为共产主义替代物的浪漫、激起了作为共产主义替代物的浪漫 -- 极权主义政治运动极权主义政治运动（如德国纳粹）。大萧条相对于其他单一原因来说是最能（如德国纳粹）。大萧条相对于其他单一原因来说是最能够解释为什么在够解释为什么在 19321932 年到年到 19381938 年之间欧洲大陆和拉丁美年之间欧洲大陆和拉丁美洲各国政治逐渐右翼化。洲各国政治逐渐右翼化。

44 、阿道夫、阿道夫 ·· 希特勒、贝尼托希特勒、贝尼托 ·· 墨索里尼等独裁者的崛起，间墨索里尼等独裁者的崛起，间接造成第二次世界大战爆发接造成第二次世界大战爆发。。


回教银行（回教银行（ Islamic BankIslamic Bank ））是遵循回教法律是遵循回教法律 (Sha(Sha

riah)riah) 和原则，及回教经济指导方针的银行业务系统。和原则，及回教经济指导方针的银行业务系统。

严禁“严禁“ riba”(riba”( 征收和缴付利息征收和缴付利息 )) ，高利贷，经营具有，高利贷，经营具有

金融风险和不合法金融风险和不合法 (haram) (haram) 的商业活动，回教银行如的商业活动，回教银行如

今已在全球银行业的局势里成为一股日渐增长的趋势今已在全球银行业的局势里成为一股日渐增长的趋势

回教银行（回教银行（ Islamic BankIslamic Bank ））是遵循回教法律是遵循回教法律 (Sha(Sha

riah)riah) 和原则，及回教经济指导方针的银行业务系统。和原则，及回教经济指导方针的银行业务系统。

严禁“严禁“ riba”(riba”( 征收和缴付利息征收和缴付利息 )) ，高利贷，经营具有，高利贷，经营具有

金融风险和不合法金融风险和不合法 (haram) (haram) 的商业活动，回教银行如的商业活动，回教银行如

今已在全球银行业的局势里成为一股日渐增长的趋势今已在全球银行业的局势里成为一股日渐增长的趋势

Unit 3:Unit 3:

• Part I: Part I: 3.1 Introduction to Banking Industry

• Part II: Part II: 3.2 Types of Banks

• Part III:Part III: 3.3 Banks Channels

• Part IV Part IV : : 3.4 Banks in the Economy

Banking IndustryBanking Industry3.1 Introduction to Banking Industry3.1 Introduction to Banking Industry

Banks have influenced economies and politics for centuries. HBanks have influenced economies and politics for centuries. Historically, the primary purpose of a bank was to provide loans to tristorically, the primary purpose of a bank was to provide loans to trading companies. Banks provided funds to allow businesses to purcading companies. Banks provided funds to allow businesses to purchase inventory, and collected those funds back with interest when thase inventory, and collected those funds back with interest when the goods were sold. For centuries, the banking industry only dealt he goods were sold. For centuries, the banking industry only dealt with businesses, not consumers. Banking services have expanded twith businesses, not consumers. Banking services have expanded to include services directed at individuals, and risk in these much so include services directed at individuals, and risk in these much smaller transactions are pooled.maller transactions are pooled.

Text :Text :

The name bank derives from the Italian word banco whiThe name bank derives from the Italian word banco whi

ch means "desk/bench", used during the Renaissance by Florch means "desk/bench", used during the Renaissance by Flor

entine bankers, who used to make their transactions above a entine bankers, who used to make their transactions above a

desk covered by a green tablecloth.desk covered by a green tablecloth.

Text :Text :

Text :Text :

A bank is a financial institution where you can deposit youA bank is a financial institution where you can deposit you

r money. Banks provide a system for easily transferring money r money. Banks provide a system for easily transferring money

from one person or business to another. Using banks and the mfrom one person or business to another. Using banks and the m

any services they offer saves us an incredible amount of time, any services they offer saves us an incredible amount of time,

and ensures that our funds "pass hands" in a legal and structureand ensures that our funds "pass hands" in a legal and structure

d manner. There are also other types of financial institutions thd manner. There are also other types of financial institutions th

at operate just like banks.at operate just like banks.

A bank is a financial institution where you can deposit youA bank is a financial institution where you can deposit you

r money. Banks provide a system for easily transferring money r money. Banks provide a system for easily transferring money

from one person or business to another. Using banks and the mfrom one person or business to another. Using banks and the m

any services they offer saves us an incredible amount of time, any services they offer saves us an incredible amount of time,

and ensures that our funds "pass hands" in a legal and structureand ensures that our funds "pass hands" in a legal and structure

d manner. There are also other types of financial institutions thd manner. There are also other types of financial institutions th

at operate just like banks.at operate just like banks.

Text :Text :

A banker is defined as a person who carries on the A banker is defined as a person who carries on the

business of banking, which is specified as:business of banking, which is specified as:

conducting current accounts for his customers conducting current accounts for his customers

paying cheques drawn on him, and collecting cheques for paying cheques drawn on him, and collecting cheques for

his customers.his customers.

A banker is defined as a person who carries on the A banker is defined as a person who carries on the

business of banking, which is specified as:business of banking, which is specified as:

conducting current accounts for his customers conducting current accounts for his customers

paying cheques drawn on him, and collecting cheques for paying cheques drawn on him, and collecting cheques for

his customers.his customers.

Text :Text :

HOW BANKS OPERATESHOW BANKS OPERATES

In addition to providing a safe place for your money, banks In addition to providing a safe place for your money, banks

also loan money to businesses and consumers. A large portion of also loan money to businesses and consumers. A large portion of

a bank's business is lending. How do banks get the money they la bank's business is lending. How do banks get the money they l

oan? The money comes from depositors like you. Banks use thesoan? The money comes from depositors like you. Banks use thes

e deposits to make loans. Every fee you pay to your bank enablee deposits to make loans. Every fee you pay to your bank enable

s them to reinvest in themselves, giving them more money to loas them to reinvest in themselves, giving them more money to loa

n to you, for another fee, of course. n to you, for another fee, of course.

HOW BANKS OPERATESHOW BANKS OPERATES

In addition to providing a safe place for your money, banks In addition to providing a safe place for your money, banks

also loan money to businesses and consumers. A large portion of also loan money to businesses and consumers. A large portion of

a bank's business is lending. How do banks get the money they la bank's business is lending. How do banks get the money they l

oan? The money comes from depositors like you. Banks use thesoan? The money comes from depositors like you. Banks use thes

e deposits to make loans. Every fee you pay to your bank enablee deposits to make loans. Every fee you pay to your bank enable

s them to reinvest in themselves, giving them more money to loas them to reinvest in themselves, giving them more money to loa

n to you, for another fee, of course. n to you, for another fee, of course.

Text :Text :

Banks are in business to make a profit. Their profit Banks are in business to make a profit. Their profit

generally comes from the difference in interest paid to generally comes from the difference in interest paid to

depositors and the interest earned on loans. Making loans helps depositors and the interest earned on loans. Making loans helps

banks make money, and offering checking accounts is a way to banks make money, and offering checking accounts is a way to

attract deposits, which banks turn into profitable loans. attract deposits, which banks turn into profitable loans.

Banks are in business to make a profit. Their profit Banks are in business to make a profit. Their profit

generally comes from the difference in interest paid to generally comes from the difference in interest paid to

depositors and the interest earned on loans. Making loans helps depositors and the interest earned on loans. Making loans helps

banks make money, and offering checking accounts is a way to banks make money, and offering checking accounts is a way to

attract deposits, which banks turn into profitable loans. attract deposits, which banks turn into profitable loans.

Text :Text :

Banks cannot legally loan all of their deposited money all at

once. The Federal Reserve Board, which is part of the Federal

Reserve System, requires that banks must keep a certain

percentage of their deposits in reserve at all times, assuring you,

the customer, can withdraw your money when you need to. The

remaining funds, which are not subject to reserve, are used to

make consumer loans.

Banks cannot legally loan all of their deposited money all at

once. The Federal Reserve Board, which is part of the Federal

Reserve System, requires that banks must keep a certain

percentage of their deposits in reserve at all times, assuring you,

the customer, can withdraw your money when you need to. The

remaining funds, which are not subject to reserve, are used to

make consumer loans.

Text :Text :

3.2 Types of Banks

Banks' activities can be divided into retail banking,

dealing directly with individuals and small businesses;

business banking, providing services to mid-market business;

corporate banking, directed at large business entities; private

banking, providing wealth management services 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-profit organizations.

3.2 Types of Banks

Banks' activities can be divided into retail banking,

dealing directly with individuals and small businesses;

business banking, providing services to mid-market business;

corporate banking, directed at large business entities; private

banking, providing wealth management services 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-profit organizations.

Text :Text :

Central banks are normally government-owned and charged

with quasi-regulatory responsibilities, such as supervising

commercial banks, or controlling the cash interest rate. They

generally provide liquidity to the banking system and act as the

lender of last resort in event of a crisis.

Central banks are normally government-owned and charged

with quasi-regulatory responsibilities, such as supervising

commercial banks, or controlling the cash interest rate. They

generally provide liquidity to the banking system and act as the

lender of last resort in event of a crisis.

Text :Text :

TYPES OF RETAIL BANKSTYPES OF RETAIL BANKS

Commercial banks: the term used for a normal bank to

distinguish it from an investment bank. After the Great

Depression, the U.S. Congress required that banks only engage in

banking activities, whereas investment banks were limited to

capital market activities. Since the 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.

TYPES OF RETAIL BANKSTYPES OF RETAIL BANKS

Commercial banks: the term used for a normal bank to

distinguish it from an investment bank. After the Great

Depression, the U.S. Congress required that banks only engage in

banking activities, whereas investment banks were limited to

capital market activities. Since the 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.

Text :Text :

Community Banks: locally operated financial institutions that

empower employees to make local decisions to serve their

customers and the partners.

Community development banks: regulated banks that provide

financial services and credit to under-served markets or

populations.

Postal savings banks: savings banks associated with national

postal systems.

Community Banks: locally operated financial institutions that

empower employees to make local decisions to serve their

customers and the partners.

Community development banks: regulated banks that provide

financial services and credit to under-served markets or

populations.

Postal savings banks: savings banks associated with national

postal systems.

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Private banks: banks that manage the assets of high net worth

individuals.

Offshore banks: banks located in jurisdictions with low taxation

and regulation. Many offshore banks are essentially private banks.

Private banks: banks that manage the assets of high net worth

individuals.

Offshore banks: banks located in jurisdictions with low taxation

and regulation. Many offshore banks are essentially private banks.

Text :Text :

Savings bank: in Europe, savings banks take their roots in the 19th or sometimes even 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative; in others, socially committed individuals created foundations to put in place the necessary infrastructure. Nowadays, European savings banks 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 from commercial banks by their broadly decentralised distribution network, providing local and regional outreach—and by their socially responsible approach to business and society.

Savings bank: in Europe, savings banks take their roots in the 19th or sometimes even 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative; in others, socially committed individuals created foundations to put in place the necessary infrastructure. Nowadays, European savings banks 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 from commercial banks by their broadly decentralised distribution network, providing local and regional outreach—and by their socially responsible approach to business and society.

Text :Text :

Building societies and Landesbanks: institutions that conduct

retail banking.

Ethical banks: banks that prioritize the transparency of all ope

rations and make only what they consider to be socially-respon

sible investments.

Islamic banks: Banks that transact according to Islamic

principles.

Building societies and Landesbanks: institutions that conduct

retail banking.

Ethical banks: banks that prioritize the transparency of all ope

rations and make only what they consider to be socially-respon

sible investments.

Islamic banks: Banks that transact according to Islamic

principles.

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TYPES OF INVESTMENT BANKSTYPES OF INVESTMENT BANKS

Investment banks "underwrite" (guarantee the sale of)

stock and bond issues, trade for their own accounts, make markets,

and advise corporations on capital market activities such as

mergers and acquisitions.

Merchant banks were traditionally banks which engaged Merchant banks were traditionally banks which engaged

in trade finance. The modern definition, however, refers to banks in trade finance. The modern definition, however, refers to banks

which provide capital to firms in the form of shares rather than which provide capital to firms in the form of shares rather than

loans. Unlike venture capital firms, they tend not to invest in new loans. Unlike venture capital firms, they tend not to invest in new

companies. companies.

TYPES OF INVESTMENT BANKSTYPES OF INVESTMENT BANKS

Investment banks "underwrite" (guarantee the sale of)

stock and bond issues, trade for their own accounts, make markets,

and advise corporations on capital market activities such as

mergers and acquisitions.

Merchant banks were traditionally banks which engaged Merchant banks were traditionally banks which engaged

in trade finance. The modern definition, however, refers to banks in trade finance. The modern definition, however, refers to banks

which provide capital to firms in the form of shares rather than which provide capital to firms in the form of shares rather than

loans. Unlike venture capital firms, they tend not to invest in new loans. Unlike venture capital firms, they tend not to invest in new

companies. companies.

Text :Text :

BOTH COMBINEDBOTH COMBINED

Universal banksUniversal banks, more commonly known as financial , more commonly known as financial services companies, engage in several of these activities. For services companies, engage in several of these activities. For example, Citigroup is a large American bank involved in example, Citigroup is a large American bank involved in commercial and retail lending, with commercial and retail lending, with subsidiaries in tax havens offering offshore banking services to customers in other countries. Other large financial institutions are similarly diversified and engage in multiple activities. In Europe and Asia, big banks are very diversified groups that, among other services, also distribute insurance—hence the term bancassurance, a portmanteau word combining "banque or bank" and "assurance", signifying that both banking and insurance are provided by the same corporate entity.

BOTH COMBINEDBOTH COMBINED

Universal banksUniversal banks, more commonly known as financial , more commonly known as financial services companies, engage in several of these activities. For services companies, engage in several of these activities. For example, Citigroup is a large American bank involved in example, Citigroup is a large American bank involved in commercial and retail lending, with commercial and retail lending, with subsidiaries in tax havens offering offshore banking services to customers in other countries. Other large financial institutions are similarly diversified and engage in multiple activities. In Europe and Asia, big banks are very diversified groups that, among other services, also distribute insurance—hence the term bancassurance, a portmanteau word combining "banque or bank" and "assurance", signifying that both banking and insurance are provided by the same corporate entity.

Text :Text :

OTHER TYPES OF BANKSOTHER TYPES OF BANKS

Islamic banks adhere to the concepts of Islamic law. Islamic b

anking revolves around several well established concepts which are

based on Islamic canons. Since the concept of interest is forbidden i

n Islam, all banking activities must avoid interest. Instead of interes

t, the bank earns profit (mark-up) and fees on financing facilities th

at it extends to the customers. Also, deposit makers earn a share of t

he bank’s profit as opposed to a predetermined interest.

OTHER TYPES OF BANKSOTHER TYPES OF BANKS

Islamic banks adhere to the concepts of Islamic law. Islamic b

anking revolves around several well established concepts which are

based on Islamic canons. Since the concept of interest is forbidden i

n Islam, all banking activities must avoid interest. Instead of interes

t, the bank earns profit (mark-up) and fees on financing facilities th

at it extends to the customers. Also, deposit makers earn a share of t

he bank’s profit as opposed to a predetermined interest.

Text :Text :

3.3 Banks Channels

Banks offer many different channels to access their

banking and other services:

A branch, banking centre or financial centre is a retail

location where a bank or financial institution offers a wide

array of face-to-face service to its customers.

3.3 Banks Channels

Banks offer many different channels to access their

banking and other services:

A branch, banking centre or financial centre is a retail

location where a bank or financial institution offers a wide

array of face-to-face service to its customers.

Text :Text :

ATM is a computerised telecommunications device that provides a financial institution's customers a method of financial transactions in a public space without the need for a human clerk or bank teller. Most banks now have more ATMs than branches, and ATMs are providing a wider range of services to a wider range of users. For example in Hong Kong, most ATMs enable anyone to deposit cash to any customer of the bank's account by feeding in the notes and entering the account number to be credited. Also, most ATMs enable card holders from other banks to get their account balance and withdraw cash, even if the card is issued by a foreign bank.

ATM is a computerised telecommunications device that provides a financial institution's customers a method of financial transactions in a public space without the need for a human clerk or bank teller. Most banks now have more ATMs than branches, and ATMs are providing a wider range of services to a wider range of users. For example in Hong Kong, most ATMs enable anyone to deposit cash to any customer of the bank's account by feeding in the notes and entering the account number to be credited. Also, most ATMs enable card holders from other banks to get their account balance and withdraw cash, even if the card is issued by a foreign bank.

Text :Text :

Mail is part of the postal system which itself is a system

wherein written documents typically enclosed in envelopes, and

also small packages containing other matter, are delivered to

destinations around the world. This can be used to deposit

cheques and to send orders to the bank to pay money to third

parties. Banks also normally use mail to deliver periodic account

statements to customers.

Mail is part of the postal system which itself is a system

wherein written documents typically enclosed in envelopes, and

also small packages containing other matter, are delivered to

destinations around the world. This can be used to deposit

cheques and to send orders to the bank to pay money to third

parties. Banks also normally use mail to deliver periodic account

statements to customers.

Text :Text :

Telephone banking is a service provided by a financial instituti

on which allows its customers to perform transactions over the tele

phone. This normally includes bill payments for bills from major b

illers (e.g. for electricity).

Online banking is a term used for performing transactions, pay

ments etc. over the Internet through a bank, credit union or buildin

g society's secure website. E-banking is the very popular in the wor

ld.

Telephone banking is a service provided by a financial instituti

on which allows its customers to perform transactions over the tele

phone. This normally includes bill payments for bills from major b

illers (e.g. for electricity).

Online banking is a term used for performing transactions, pay

ments etc. over the Internet through a bank, credit union or buildin

g society's secure website. E-banking is the very popular in the wor

ld.

Text :Text :

3.4 Banks in the Economy

ECONOMIC FUNCTIONSECONOMIC FUNCTIONS

The economic functions of banks include: issue of money, The economic functions of banks include: issue of money,

netting and settlement of payments, credit intermediation, netting and settlement of payments, credit intermediation,

credit quality improvement and maturity transformation.credit quality improvement and maturity transformation.

3.4 Banks in the Economy

ECONOMIC FUNCTIONSECONOMIC FUNCTIONS

The economic functions of banks include: issue of money, The economic functions of banks include: issue of money,

netting and settlement of payments, credit intermediation, netting and settlement of payments, credit intermediation,

credit quality improvement and maturity transformation.credit quality improvement and maturity transformation.

Text :Text :

Issue of money—In the form of banknotes and current

accounts subject to cheque or payment at the customer's order.

These claims on banks can act as money because they are

negotiable and/or repayable on demand, and hence valued at par.

They are effectively transferable by mere delivery, in the case of

banknotes, or by drawing a cheque that the payee may bank or

cash.

Issue of money—In the form of banknotes and current

accounts subject to cheque or payment at the customer's order.

These claims on banks can act as money because they are

negotiable and/or repayable on demand, and hence valued at par.

They are effectively transferable by mere delivery, in the case of

banknotes, or by drawing a cheque that the payee may bank or

cash.

Text :Text :

Netting and settlement of payments—banks act as both

collection and paying agents for customers, participating in

interbank clearing and settlement systems to collect, present,

be presented with, and pay payment instruments. This

enables banks to economise on reserves held for settlement

of payments, since inward and outward payments offset each

other. It also enables the offsetting of payment flows

between geographical areas, reducing the cost of settlement

between them.

Netting and settlement of payments—banks act as both

collection and paying agents for customers, participating in

interbank clearing and settlement systems to collect, present,

be presented with, and pay payment instruments. This

enables banks to economise on reserves held for settlement

of payments, since inward and outward payments offset each

other. It also enables the offsetting of payment flows

between geographical areas, reducing the cost of settlement

between them.

Text :Text :

Credit intermediation—banks borrow and lend back-to-back on their own account as middle men..

Credit quality improvement—banks lend money to ordinary cCredit quality improvement—banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but arommercial and personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversificae high quality borrowers. The improvement comes from diversification of the bank's assets and capital which provides a buffer to absotion of the bank's assets and capital which provides a buffer to absorb losses without defaulting on its obligations. However, banknotes rb losses without defaulting on its obligations. However, banknotes and deposits are generally unsecured; if the bank gets into difficultand deposits are generally unsecured; if the bank gets into difficulty and pledges assets as security, to raise the funding it needs to cony and pledges assets as security, to raise the funding it needs to continue to operate, this puts the note holders and depositors in an ecotinue to operate, this puts the note holders and depositors in an economically subordinated position. nomically subordinated position.

Credit intermediation—banks borrow and lend back-to-back on their own account as middle men..

Credit quality improvement—banks lend money to ordinary cCredit quality improvement—banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but arommercial and personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversificae high quality borrowers. The improvement comes from diversification of the bank's assets and capital which provides a buffer to absotion of the bank's assets and capital which provides a buffer to absorb losses without defaulting on its obligations. However, banknotes rb losses without defaulting on its obligations. However, banknotes and deposits are generally unsecured; if the bank gets into difficultand deposits are generally unsecured; if the bank gets into difficulty and pledges assets as security, to raise the funding it needs to cony and pledges assets as security, to raise the funding it needs to continue to operate, this puts the note holders and depositors in an ecotinue to operate, this puts the note holders and depositors in an economically subordinated position. nomically subordinated position.

Text :Text :

Maturity transformation—banks borrow more on demand debt

and short term debt, but provide more long term loans. In other

words, they borrow short and lend long. With a stronger credit

quality than most other borrowers, banks can do this by

aggregating issues (e.g. accepting deposits and issuing banknotes)

and redemptions (e.g. withdrawals and redemptions of

banknotes), maintaining reserves of cash, investing in marketable

securities that can be readily converted to cash if needed, and

raising replacement funding as needed from various sources (e.g.

wholesale cash markets and securities markets).

Maturity transformation—banks borrow more on demand debt

and short term debt, but provide more long term loans. In other

words, they borrow short and lend long. With a stronger credit

quality than most other borrowers, banks can do this by

aggregating issues (e.g. accepting deposits and issuing banknotes)

and redemptions (e.g. withdrawals and redemptions of

banknotes), maintaining reserves of cash, investing in marketable

securities that can be readily converted to cash if needed, and

raising replacement funding as needed from various sources (e.g.

wholesale cash markets and securities markets).

Text :Text :

BANK CRISISBANK CRISIS

Banks are Banks are susceptible to many forms of risk which have

triggered occasional systemic crises. These include liquidity risk

(where many depositors may request withdrawals beyond

available funds), credit risk (the chance that those who owe

money to the bank will not repay it), and interest rate risk (the

possibility that the bank will become unprofitable, if rising

interest rates force it to pay relatively more on its deposits than it

receives on its loans).

BANK CRISISBANK CRISIS

Banks are Banks are susceptible to many forms of risk which have

triggered occasional systemic crises. These include liquidity risk

(where many depositors may request withdrawals beyond

available funds), credit risk (the chance that those who owe

money to the bank will not repay it), and interest rate risk (the

possibility that the bank will become unprofitable, if rising

interest rates force it to pay relatively more on its deposits than it

receives on its loans).

Text :Text :

Banking crises have developed many times throughout history,

when one or more risks have materialized for a banking sector as a

whole. Prominent examples include the bank run that occurred

during the Great Depression, the U.S. Savings and Loan crisis in

the 1980s and early 1990s, the Japanese banking crisis during the

1990s, and the subprime mortgage crisis in the 2000s.

Banking crises have developed many times throughout history,

when one or more risks have materialized for a banking sector as a

whole. Prominent examples include the bank run that occurred

during the Great Depression, the U.S. Savings and Loan crisis in

the 1980s and early 1990s, the Japanese banking crisis during the

1990s, and the subprime mortgage crisis in the 2000s.

entityentity n. something that exists as a particular and discrete unitn. something that exists as a particular and discrete unit

经济实体经济实体

eg. combined into a single eg. combined into a single entityentity

联合的联合成一个整体的联合的联合成一个整体的

Text : Language PointsText : Language Points

net worthnet worth 资本净值资本净值 , , 净值净值

eg. Their total eg. Their total net worthnet worth of $872 billion was down from $946 bi of $872 billion was down from $946 billion in 2001 and $1.2 trillion in 2000. llion in 2001 and $1.2 trillion in 2000. 2000 2000 年这些富豪们的资产净值总额为年这些富豪们的资产净值总额为 1.21.2 万亿美元，万亿美元， 20012001年则降至年则降至 94609460 亿，亿， 20022002 年仅为年仅为 87208720 亿。亿。

The 2002 survey included individuals with a minimum The 2002 survey included individuals with a minimum net net worthworth of $550 million - down from the required $600 million in 20 of $550 million - down from the required $600 million in 2001. 01. 2002 2002 年入围参加排名者的个人资产至少要达到年入围参加排名者的个人资产至少要达到 5.55.5 亿美元，亿美元，而在而在 20012001 年，最起码也得有年，最起码也得有 66 亿的家产才能被《福布斯》列亿的家产才能被《福布斯》列入考虑之列。入考虑之列。


quasiquasi a. having a likeness to something; resemblinga. having a likeness to something; resembling 类似的类似的 ,, 与与某事物相似的；相象的某事物相似的；相象的

quasi-quasi- pref.pref. （前缀）（前缀） to some degree; in some mannerto some degree; in some manner 表示“类表示“类似”：在某种程度上；在某种意义上似”：在某种程度上；在某种意义上

eg. It maintains close contact with the Mainland authorities at difeg. It maintains close contact with the Mainland authorities at different levels, including the HK/Guangdong Co-operation Joint Conferent levels, including the HK/Guangdong Co-operation Joint Conference, the Mainland/HKSAR Joint Commission on Commerce anference, the Mainland/HKSAR Joint Commission on Commerce and Trade, and through various bureaux, departments and d Trade, and through various bureaux, departments and quasiquasi-gover-government bodies like the Hong Kong Trade Development Council (TDnment bodies like the Hong Kong Trade Development Council (TDC). C). 特区政府和内地官方在不同层面保持密切联系，除了通特区政府和内地官方在不同层面保持密切联系，除了通过粤港合作联席会议和内地与香港特别行政区商贸联系委员会过粤港合作联席会议和内地与香港特别行政区商贸联系委员会等渠道外，各决策局、部门以及如香港贸易发展局等半官方机等渠道外，各决策局、部门以及如香港贸易发展局等半官方机构，亦经常与内地的相关部门保持接触。构，亦经常与内地的相关部门保持接触。


creditcredit n. reputation for solvency and integrity entitling a person to n. reputation for solvency and integrity entitling a person to

be trusted in buying or borrowing. be trusted in buying or borrowing. 信用：给予某人的证明，其信用：给予某人的证明，其在买入或借款时可以信任的在清偿能力和诚实上的声誉在买入或借款时可以信任的在清偿能力和诚实上的声誉 ;; 信贷信贷

eg. The bank refused further eg. The bank refused further creditscredits to the company. to the company.

银行拒绝再贷款给该公司。银行拒绝再贷款给该公司。

Does this item go among the Does this item go among the creditscredits or the debits? or the debits?

这笔账应记入贷方还是借方这笔账应记入贷方还是借方 ??


commercial bankcommercial bank A bank whose principal functions are to receiA bank whose principal functions are to recei

ve demand deposits and to make short-term loans. ve demand deposits and to make short-term loans. 商业银行：主商业银行：主要职能是接收需求存款和进行短期贷款的银行要职能是接收需求存款和进行短期贷款的银行

eg. eg. Commercial bankCommercial bank management in analyzing a customer's loan management in analyzing a customer's loan

request considers many factors. request considers many factors.

商业银行的管理人员在分析客户的贷款申请时必须考虑许商业银行的管理人员在分析客户的贷款申请时必须考虑许多因素。多因素。


stratumstratum nn. a level of society composed of people with similar . a level of society composed of people with similar

social, cultural, or economic status. (social, cultural, or economic status. (pl.pl. strata) strata) 社会阶层社会阶层

eg. They do not constitute a separate class or eg. They do not constitute a separate class or stratumstratum. .

知识分子和青年学生并不是一个阶级或阶层。知识分子和青年学生并不是一个阶级或阶层。


investment bankinvestment bank a financial institution that deals primarily a financial institution that deals primarily

with raising capital, corporate mergers and acquisitions, and sewith raising capital, corporate mergers and acquisitions, and se

curities trades.curities trades. 投资银行投资银行

eg. He earned a fat salary with an eg. He earned a fat salary with an investment bankinvestment bank. .

他在一家投资银行挣有优厚的薪水。他在一家投资银行挣有优厚的薪水。


underwriteunderwrite v. to assume financial responsibility for; guarantv. to assume financial responsibility for; guarant

ee against failure ee against failure 承担财政责任；对破产给予保险承担财政责任；对破产给予保险

eg. What types of cover does your insurance company eg. What types of cover does your insurance company

usually usually underwriteunderwrite? ?

你们的保险公司一般承保哪些险别？你们的保险公司一般承保哪些险别？


capital marketcapital market market for the trade of or relating to financi market for the trade of or relating to financi

al assets, especially being or related to those financial assets thaal assets, especially being or related to those financial assets tha

t add to the net worth of a businesst add to the net worth of a business 资本市场资本市场

eg. The eg. The capital marketcapital market has been constantly expanded through t has been constantly expanded through t

he improvement of the credit market, and the development of she improvement of the credit market, and the development of s

tock and government loan markets. tock and government loan markets.

在资本市场，通过完善信贷市尝发展股票市场和国债市场在资本市场，通过完善信贷市尝发展股票市场和国债市场

来不断使其发展壮大。来不断使其发展壮大。


subsidiarysubsidiary n. of, relating to, or of the nature of a subsidy. n. of, relating to, or of the nature of a subsidy.

附属品附属品

eg. A lack of corporate interest has made the eg. A lack of corporate interest has made the subsidiarysubsidiary an orp an orp

han. han.

因缺乏共同利益，使得这家子公司无人照管。因缺乏共同利益，使得这家子公司无人照管。


portmanteauportmanteau n. n. 混成词混成词

branchbranch n. an area of specialized skill or knowledge, especiall n. an area of specialized skill or knowledge, especiall

y academic or vocational, that is related to but separate from oty academic or vocational, that is related to but separate from ot

her areasher areas 部门，分科：具有特殊技能或知识，尤指学术上或部门，分科：具有特殊技能或知识，尤指学术上或

职业上的分区，与其他分区相联系但又有区别职业上的分区，与其他分区相联系但又有区别

eg. This bank has many eg. This bank has many branchesbranches around the world. around the world.

这家银行在全世界有很多分行。这家银行在全世界有很多分行。



ATM Automatic Telling Machine 自动柜员机ATM Automatic Telling Machine 自动柜员机


banknotebanknote n. 钞票，纸币banknotebanknote n. 钞票，纸币

negotiablenegotiable a. transferable from one person to another by delivery a. transferable from one person to another by delivery

or by delivery and endorsement:or by delivery and endorsement: 可转让的：通过分送或认可从可转让的：通过分送或认可从

一人传送到另一人的一人传送到另一人的

eg. eg. negotiablenegotiable certificates of deposit market certificates of deposit market

可转让定期存单市场可转让定期存单市场

non-non-negotiablenegotiable copy of B/L copy of B/L

不可转让提单不可转让提单


at parat par 依照票面价格依照票面价格 ,, 平价平价 ,, 按面值按面值 ,, 按票面价值按票面价值 ,, 按成本按成本 ,,

根据平价根据平价

eg. We bought the stock eg. We bought the stock at parat par. .

我们是按票面价值买进这只股票的。我们是按票面价值买进这只股票的。

The two currencies have now reached parity, i.e. are The two currencies have now reached parity, i.e. are at parat par..

这两种货币现已达到同等价值这两种货币现已达到同等价值 ..


maturitymaturity n. the time at which a note or bond is due (n. the time at which a note or bond is due ( 债务、票债务、票

据等的据等的 )) 到期到期 ; ; 到期日到期日

eg. The eg. The maturitymaturity date of this bond is 31st December, 2010. date of this bond is 31st December, 2010.

此债券的到期日是此债券的到期日是 20102010 年年 1212月月 3131日。日。


susceptiblesusceptible a. easily influenced or affecteda. easily influenced or affected 易受影响的易受影响的

eg. be eg. be susceptiblesusceptible of of 能能 ...... 的的 ; ; 容许的容许的

be be susceptiblesusceptible to to 对对 ......敏感的敏感的 ; ; 容易受到容易受到 ......

The statement of the thief is not The statement of the thief is not susceptiblesusceptible of proof. of proof.

那个小偷的陈述无从证明。那个小偷的陈述无从证明。


ExercisesExercises

Paraphrase the following expressions or abbreviations and translate them into Chinese

1. entity 6. at par

2. net worth 7. maturity

3. underwrite 8. subsidiary

4. banknote 9. FRB

5. negotiable 10. ATM

1. entity 6. at par

2. net worth 7. maturity

3. underwrite 8. subsidiary

4. banknote 9. FRB

5. negotiable 10. ATM

Check-upCheck-upCheck-upCheck-up Check-upCheck-upCheck-upCheck-up

Exercises-KeysExercises-Keys

1. entity: something that exists as a particular and discrete unit

经济实体2. net worth 资本净值 , 净值3. underwrite : to assume financial responsibility for; guaran

tee against failure 承担财政责任；对破产给予保险承担财政责任；对破产给予保险 4. banknote: 钞票，纸币5. negotiable : transferable from one person to another by de

livery or by delivery and endorsement:可转让的：通过分送或认可从一人传送到另一人的

1. entity: something that exists as a particular and discrete unit

经济实体2. net worth 资本净值 , 净值3. underwrite : to assume financial responsibility for; guaran

tee against failure 承担财政责任；对破产给予保险承担财政责任；对破产给予保险 4. banknote: 钞票，纸币5. negotiable : transferable from one person to another by de

livery or by delivery and endorsement:可转让的：通过分送或认可从一人传送到另一人的

Exercises-KeysExercises-Keys

6. at par 6. at par 依照票面价格依照票面价格 ,,平价平价 ,,按面值按面值 ,,按票面价值按票面价值 ,,按成本按成本 ,,


7. maturity: the time at which a note or bond is due (7. maturity: the time at which a note or bond is due ( 债务、票据债务、票据

等的等的 )) 到期到期 ; ; 到期日到期日

8. subsidiary: of, relating to, or of the nature of a subsidy.8. subsidiary: of, relating to, or of the nature of a subsidy. 附属附属

品品

9. FRS: =Federal Reserve Board 9. FRS: =Federal Reserve Board 联邦储备委员会联邦储备委员会

10. ATM:=Automatic Telling Machine 10. ATM:=Automatic Telling Machine 自动柜员机自动柜员机

6. at par 6. at par 依照票面价格依照票面价格 ,,平价平价 ,,按面值按面值 ,,按票面价值按票面价值 ,,按成本按成本 ,,


7. maturity: the time at which a note or bond is due (7. maturity: the time at which a note or bond is due ( 债务、票据债务、票据

等的等的 )) 到期到期 ; ; 到期日到期日

8. subsidiary: of, relating to, or of the nature of a subsidy.8. subsidiary: of, relating to, or of the nature of a subsidy. 附属附属

品品

9. FRS: =Federal Reserve Board 9. FRS: =Federal Reserve Board 联邦储备委员会联邦储备委员会

10. ATM:=Automatic Telling Machine 10. ATM:=Automatic Telling Machine 自动柜员机自动柜员机

ExercisesExercises

Fill in the blanks with the proper words

individuals Interest credit process borrowing

borrowers efficient purposes avoided accepting

ExercisesExercises

Banks operate by ________ funds-usually by ________

deposits or by borrowing in the money markets. Banks borrow

from ________, businesses, financial institutions, and

governments with surplus funds (savings). They then use those

deposits and borrowed funds (liabilities of the bank) to make

________ or to purchase securities (assets of the bank). Banks

make these loans to businesses, other financial institutions,

individuals, and governments (that need the funds for

investments or other ________). ________ rates provide the

price signals for borrowers, lenders, and banks.

Banks operate by ________ funds-usually by ________


from ________, businesses, financial institutions, and


deposits and borrowed funds (liabilities of the bank) to make

________ or to purchase securities (assets of the bank). Banks

make these loans to businesses, other financial institutions,

individuals, and governments (that need the funds for

investments or other ________). ________ rates provide the

price signals for borrowers, lenders, and banks.

Check-upCheck-upCheck-upCheck-up

ExercisesExercises

Through the ________ of taking deposits, making loans,

and responding to interest rate signals, the banking system helps

channel funds from savers to borrowers in an ________ manner.

Savers range from an individual with a $1,000 certificate of

deposit to a corporation with millions of dollars in temporary

savings. Banks also serve a wide array of ________, from an

individual who takes a loan of $100 on a ________ card to a

major corporation financing a billion-dollar corporate merger.

Through the ________ of taking deposits, making loans,

and responding to interest rate signals, the banking system helps

channel funds from savers to borrowers in an ________ manner.

Savers range from an individual with a $1,000 certificate of

deposit to a corporation with millions of dollars in temporary

savings. Banks also serve a wide array of ________, from an

individual who takes a loan of $100 on a ________ card to a

major corporation financing a billion-dollar corporate merger.

Check-upCheck-upCheck-upCheck-up

ExercisesExercises

Banks operate by borrowing funds-usually by accepting


from individuals, businesses, financial institutions, and


deposits and borrowed funds (liabilities of the bank) to make loans

or to purchase securities (assets of the bank). Banks make these

loans to businesses, other financial institutions, individuals, and

governments (that need the funds for investments or other

purposes). Interest rates provide the price signals for borrowers,

lenders, and banks.

Banks operate by borrowing funds-usually by accepting


from individuals, businesses, financial institutions, and


deposits and borrowed funds (liabilities of the bank) to make loans

or to purchase securities (assets of the bank). Banks make these

loans to businesses, other financial institutions, individuals, and

governments (that need the funds for investments or other

purposes). Interest rates provide the price signals for borrowers,

lenders, and banks.

ExercisesExercises

Through the process of taking deposits, making loans,

and responding to interest rate signals, the banking system

helps channel funds from savers to borrowers in an efficient

manner. Savers range from an individual with a $1,000

certificate of deposit to a corporation with millions of dollars

in temporary savings. Banks also serve a wide array of

borrowers, from an individual who takes a loan of $100 on a

credit card to a major corporation financing a billion-dollar

corporate merger.

Through the process of taking deposits, making loans,

and responding to interest rate signals, the banking system

helps channel funds from savers to borrowers in an efficient

manner. Savers range from an individual with a $1,000

certificate of deposit to a corporation with millions of dollars

in temporary savings. Banks also serve a wide array of

borrowers, from an individual who takes a loan of $100 on a

credit card to a major corporation financing a billion-dollar

corporate merger.

ExercisesExercises

Topic for discussionTopic for discussion

In your opinion, what is the In your opinion, what is the most useful function of most useful function of banks in our daily life?banks in our daily life?

In your opinion, what is the In your opinion, what is the most useful function of most useful function of banks in our daily life?banks in our daily life?

AssignmentsAssignments

1.1. Review the Text .Review the Text .

2.2. Keep in mind the special teKeep in mind the special te

rms learned in this Unit.rms learned in this Unit.

3.3. Do exercises in the book.Do exercises in the book.

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Unit 3: Banking Industry Financial English Unit 3: Revision of Unit 2Revision of Unit 2Revision of...

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