Text 2

A STRANGE LOAN

This morning, she studied two loan requests, approved one and penciled some queries on another. A third proposal stopped her short. Startled, she read through the file again.

The loan officer who had prepared the file answered Edwina's intercom buzz.

"Castleman here."

"Cliff, please come over."

"Sure." The loan officer, only a half dozen desks away, looked directly at Edwina. "And I'll bet I know why you want me."

Moments later, as he seated himself beside her desk, he glanced at the open file. "I was right. We get some lulus, don't we?"

Cliff Castleman was small and precise with a round pink face and soft smile. Borrowers liked him because he was a good listener and sympathetic. But he was also a seasoned loan man with sound judgment.

"I was hoping," Edwina said, "that this application is some kind of sick joke, even if a ghastly one."

"Ghoulish would be more apt, Mrs. D'Orsey. And while the whole thing may be sick, I assure you it's real." Castleman motioned to the file. "I included all the facts because I knew you'd want them. Obviously you've read the report. And my recommendation."

Are you serious in proposing to lend this much money for this purpose?"

"I'm deadly serious." The loan officer stopped abruptly. "Sorry! - that wasn't intended to be gallows humor. But I believe you should approve the loan."

It was all there in the file. A forty-three-year-old pharmaceutical salesman named Gosburne, locally employed, was applying for a loan of twenty-five thousand dollars. He was married - a first marriage which had lasted seventeen years, and the Gosburnes owned their suburban home except for a small mortgage. They had had a joint account with FMA for eight years - no problems. An earlier,

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though smaller, bank loan had been repaid. Gosburne's employment record and other financial history were good.

The intended purpose of the new loan was to buy a large stainless steel capsule in which would be placed the body of the Gosburnes' child Andrea. She had died six day ago, at age fifteen, from a kidney malignancy. At present Andrea's body was in a funeral home, stored in dry ice. Her blood had been drawn off immediately after death and replaced with a blood-like "anti-freeze" solution. The steel capsule was specially designed to contain liquid nitrogen at a subzero temperature. The body, wrapped in aluminum foil, would be immersed in this solution.

Castleman asked Edwina, "You've heard of cryonics societies?"

"Vaguely. It's pseudo-scientific. Not very reputable."

"Not very. And pseudo indeed. But the fact is, cryonics groups have a big following and they have convinced Gosburne and his wife that when medical science is more advanced - say fifty or a hundred years from now - Andrea can be thawed out, brought back to life and cured. Incidentally, the cryonics people have a motto; Freeze — wait — reanimate. "

"Horrible," Edwina said.

The loan officer conceded, "Mostly I agree with you. But look at it their way. They believe. Also they're adult, reasonably intelligent people, deeply religious. So who are we, as bankers, to be judge and jury? As I see it, the only question is; Can Gosburne repay the loan? I've gone over the figures, and I say he can and will. The guy may be a nut. But the record shows he's a nut who pays his bills."

Reluctantly Edwina studied the income and expenses figures. "It will be a terrible financial strain."

"The guy knows but insists he can handle it. He's taking on some spare-time work. And his wife is looking for a job. Mrs. D'Orsey," the loan officer said, "I've had this on my desk for two days. My first feeling was the same as yours - the whole thing's sick. But I've thought about it and I've come around. In my opinion, it's an acceptable risk."

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Acceptable risk. Essentially, Edwina realized, Cliff Castleman was right because acceptable risks were what banking was all about. He was also right in asserting that in most personal matters a bank should not be judge and jury.

Of course, this particular risk might not work out, though even if it failed to, Castleman would not be blamed. His record was good, his "wins" far greater than his losses. In fact, a perfect win record was frowned on, a busy retail loan officer expected, almost obligated, to have a few of his loans turn sour. If he didn't, he could be in trouble in reverse when a computer printout warned management he was losing business through excessive caution.

"All right," Edwina said. "The idea appalls me but I'll back your judgment." And she scribbled an initial.

Exercise 1. Answer the following questions based on the content of the text:

1. Why did borrowers like Cliff Castleman?

2. What was the first impression of the third proposal on Edwina and Cliff?

3. What was a pharmaceutical salesman applying for?

4. What was Gosburne's financial position?

5. What caused Andrea's death?

6. What was the purpose of the new loan?

7. What is the main idea of cryonics societies?

8. How did the Gosburnes plan to increase their income to repay the loan?

9. Why wasn't a perfect win record of a loan officer accepted absolutelypositively by bank management?

10.Why, in your opinion, did Edwina scribble her initial in the end? Exercise 2. Put questions to which the following data are the answers:

1. Twenty-five thousand dollars.

2. Seventeen years.

3. Eight years.

4. Six days ago

5. A hundred years from now.

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6. For two days.

Exercise 3. Find Russian (Ukrainian) equivalents to the following business words and word-combinations: loan request joint account employment record income and expense figures acceptable risk win record retail loan officer

TEXT 3

A RUN ON A BANK

"There is something positively ghoulish," Edwina D'Orsey declared, "about the attention that gets focused on a bank in difficulties."

She had been leafing through newspapers spread around the conference area of Alex Vandervoort's (one of the two executive vice-presidents of FMA) office in FMA Headquarters Tower. It was a Thursday, the day after the press statement by Dick French.

The local Times-Register bannered its page one story:

LOCAL BANK FACES HUGE LOSS With more restraint, The New York Times informed its readers: FMA Bank Declared Sound Despite Sour Loan Problems

The story had been carried, too, on last night's and this morning's TV network news shows.

Included in all reports was a hasty assurance by the Federal Reserve that First Mercantile American Bank was solvent and depositors need have no cause for alarm. Just the same, FMA was now on the Fed's "problem list" and this morning

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a team of Federal Reserve examiners had quietly moved in - clearly the first of several such incursions from regulatory agencies.

Tom Straughan, the bank economist, answered Edwina's observation. "It isn't ghoulishness, really, that excites attention when a bank's in trouble. Mostly, I think, it's fear. Fear among those with accounts that the bank must be forced out of business and they'd lose their money. Also a wider fear that if one bank fails, others could catch the same disease and the entire system fall apart."

"What I fear," Edwina said, "is the effect of this publicity."

"I'm equally uneasy", Alex Vandervoort agreed. "That's why we'll continue to watch closely to see what effect it has."

Alex had called a midday strategy meeting. One purpose of the meeting had been to ensure that actions to be taken in event of a sudden crisis were understood, and communications functioning. Apparently they were.

"That's all for now," Alex told the heads of departments. "We'll meet tomorrow at the same time."

They never did.

At 10:50 next morning, Friday, the manager of the First Mercantile American branch in Tylersville, telephoned Headquarters and his call was put through immediately to Alex Vandervoort.

When the manager - Fergus W. Gatwick - identified himself, Alex asked crisply, "What's the problem?"

"A run, sir. This place is jammed with people - more than a hundred of our regular customers, lined up with passbooks and checkbooks, and more are coming in. They're withdrawing everything, cleaning out their accounts, demanding every last dollar." The manager's voice was that of an alarmed man trying to stay calm.

Alex went cold. A run on a bank was a nightmare any banker dreaded; it was also - in the last few days - what Alex and others in top management had feared most. Such a run implied public panic, crowd psychology, a total loss of faith. Even worse, once news of a run on a single branch got out, it could sweep through others in the FMA system like a flash fire, impossible to put out, becoming a

catastrophe. No banking institution - not even the biggest and most sound - ever had enough liquidity to repay the majority of its depositors at once, if all demanded cash. Therefore, if the run persisted, cash reserves would be exhausted and FMA obliged to close its doors, perhaps permanently.

It had happened before to other banks. Given a combination of mismanagement, bad timing, and bad luck, it could happen anywhere.

The first essential, Alex knew, was to assure those who wanted their money out that they would receive it. The second was to localize the outbreak.

His instructions to the Tylerville manager were terse. "Fergus, you and all your staff are to act as if there is nothing out of the ordinary. Pay without question whatever people ask for and have in their accounts. And don't walk around looking worried. Be cheerful."

"It won't be easy, sir. I'll try."

"Do better than try. At this moment our entire bank is on your shoulders."

"Yes, sir."

"We'll get help out to you as quickly as we can. What's your cash position?"

"We've about a hundred and fifty thousand dollars in the vault," the manager said. "I figure, at the rate we're going, we can last an hour, not much more."

"There'll be cash coming," Alex assured him. "Meanwhile get the money you have out of the vault and stack it up on desks and tables where everyone can see it. Then walk among your customers. Talk to them. Assure them our bank is in excellent shape, despite what they've been reading, and tell them everyone will get their money."

Alex hung up. On another phone he immediately called Straughan.

"Tom", Alex said, "the balloon's gone up at Tylersville. The branch there needs help and cash - fast. Put Emergency Plan One in motion."

Exercise 1. Answer the following questions based on the content of the text:

1. Can a reader learn about the reason of FMA's trouble from the text?

2. How did Tom Straughan explain the public attention to a bank in trouble?

3. What was Alex's first step, as a manager, in this situation?

4. Why didn't the heads of departments meet the next morning?

5. What did the customers of the Tylersville branch want?

6. Explain in your own words what "a run on a bank" is.

7. What can cause a run?

8. What two actions are essential in the situation of a run?

9. How should the manager of a troubled branch behave?

10. What should the manager of the Tylersville branch do, according to Alex'sinstructions?

Exercise 2. Find English equivalents in the text to the following words and word-

combinations:

BspbiB, BcnbifflKa

JlHKBHflHOCTb

HstHTHe 6aHKOBCKHX BKJiaflOB

rLnaTe>Kecnoco6HbiH

PeBHSop

BaHKOBCKaa cGeperarejibHaa KHH>KKa

Exercise 3. Translate the following sentences into English:

1 . hhkto hc OJKHflaji TaKOH BCtibiniKH HeroAOBaHHa co cxopOHbi

2. JInKBH,zrHOCTb 6aHKa Gbixia nocxaBJieHa no,n comhchhc nocne saaBJieHHH bnpecce.

3. Hpe>Kfle hcm npeaocxaBHXb ccyay, 6aHK nposepaex ruiaxewecnocoSHOcxb

4. B noes^Kax jikwh npeAnoHHrarox nojibsoBaxbca HeKOBbiMH

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