II. Exercises on the Text:

3. Give Russian equivalents to:

the nation’s central bank; Board of Governors; the Open Market Committee; the Federal Advisory Council; for 14-year terms; supervise banking; is made up of the seven members; the nation’s money supply; it offers advice; prominent commercial bankers; profoundly affect; to act as lenders; corresponding in nature; banks draw currency; the checks are credited to the deposits’ accounts; are presented for collection; from time to time; wire services; almost instantaneously; government bond and other securities; establishing the rules of behavior; in general; in particular; the safety and soundness; the amount of money and credit in circulation; nationally charted; state-charted; incorporated state banks; mutual savings banks; trust companies.

4. Answer the following questions:

1. What is the Fed? 2. When was the Fed created? 3. What is the structure of the Fed? 4. What are the main functions of the Board of Governors? 5. How many Reserve Districts are there in the U.S.A? 6. What is the primary responsibility of the Open Market Committee? 7. Does the Federal Advisory Council offer advice on the nation’s financial problems? 8. What are the main roles of the Fed? 9. How does the FR Banks work with the member banks? 10. What are presented to the district banks for collection? 11. What are the ways at transferring funds? 12. What does the FR Banks issue and redeem? 13. How does the Fed supervise and regulate the Nation’s Banking System? 14. What financial institutions may be members of the Fed?

5. Sum up what the text says about:

the structure of the Fed;

what the Fed does;

incorporated state banks;

mutual savings banks;

industrial banks;

6. Translate into Russian paying attention to other bank services: Other Bank Services

Trusts. A trust arrangement exists when a bank provides safekeeping and management of funds for individuals, estates or institutions such as pension funds. The bank's job is to administer the money entrusted to it wisely and for the benefit of the owner. The bank receives a fee for managing these funds.

Currency Exchange Banks can buy or sell foreign currencies for their own benefit or for their clients. Importers, exporters and travelers are major users of these services. Even domestic travelers may purchase travelers' checks issued by banks.

Safekeeping. Many banks rent safety deposit boxes in their vaults to persons seeking a safe and secure place for their valuables.

Credit Cards. Some banks derive significant revenues from operating bankcard programs. There is usually an annual fee to use the credit card, and the consumer pays interest on the unpaid balance. Merchants pay a fee to the bank as well.

Brokerage. In very recent times (and still on a highly limited basis) some banks have entered the brokerage business. As brokers they buy and sell stocks and bonds for their clients.

Insurance. In a number of states certain banks can sell their customers life insurance policies.

Letters of Credit. Banks may aid commerce by writing letters of credit. In these documents, the bank guarantees one party (such as a seller) that payment will be made if certain conditions are met (such as the delivery of merchandise). Letters of credit are common when goods are bought or sold abroad. There is a fee for providing this letter of credit.

Investments. Banks are permitted to buy U.S. government bonds for their own accounts. Banks may make money in trading such bonds and from the interest paid by the government to the holders of such securities.

Underwriting. When companies (or even units of government) raise money by issuing shares of stocks or by the sale of bonds, they use the services of certain financial specialists. Some very large banks provide such assistance, as do major brokerage companies.

Consulting. A growing business for banks is to give advice to other businesses. Especially significant in recent years is the assistance provided to firms involved in corporate mergers and takeovers.