Banking System of Ukraine

The banking system of Ukraine dates to March 1991 when the Ukrainian Parliament adopted the law 'On Banks and Banking Activities. According to the Law the system consists of two levels, the National Bank and commercial banks.

The National Bank of Ukraine is the central financial body of the state conducting a uniform national monetary, credit and currency policy. Its aim is to strengthen the national currency, set up interbank settlement system, and coordinate and supervise the whole banking system.

Commercial banks varying in type and ownership are set up by legal entities and private persons as joint-stock companies. At present there are about 230 commercial banks in Ukraine. Two banks are state-owned (the Savings Bank and the Ukrainian Export-Import Bank), 41 banks are limited liability partnerships, 51 banks are closed joint-stock companies and the rest are open joint-stock companies. Their main functions include granting loans to businesses and individuals (backed by collateral), cash transfers and payment services, currency exchange, and other banking transactions. The banking sector of Ukraine has correspondent accounts in 193 foreign banks. (dates to 2000-01). Simultaneously, 91 non-resident banks operate around 1,600 correspondent accounts in Ukraine's banks, This supports the settlement of import-export operations. There has been taken place the transition of our banking system to international accounting and reporting standards since January, 1998.

There was founded the Ukrainian Interbank Currency Exchange which trades efficiently Ukrainian and foreign currencies and prevents significant fluctuations in the international value of the hryvnia (UAH).

Ukraine's banking strategy is to promote and stimulate commercial banks to solve economic and social problems in the country.

7. Speak on the topics: The Bank of England; The Federal Reserve System; The Ukrainian Banking System.

Module 2 Business Skills lesson 4

1. Read and translate the text:

Business Skills

It happened in late twenties. Harvey Dickson was twenty-one years of age and a messenger boy on the New York Stock Exchange. His only dream was to make his fortune and earn money.

One day at a football game he met Roger Sharply and discovered that the rich have their problems too. Sharpley, a young man from Boston, inherited his father's company not so long ago, which specialized in the import of whisky and the export of furs. He was tall and fair, well-educated and loved by women. He was in every way a total contrast to Harvey. Although they were poles apart, the contrast acted as a magnet and attracted the one to the other.

Roger's only ambition in life was to become an officer in the Navy, but after graduating from Dartmouth his father made him return to the family business. He had hardly been with the firm a few months when his father died. Roger was going to sell Sharpley & Son to the first bidder, but his father had made a codicil to his will not to sell the firm before his fortieth birthday (it was the last day one can enlist for the US Navy). If he did, the money gained from the sale would be divided equally among his other relatives.

Harvey gave Roger's problem considerable thought. After two lengthy meetings with a skilful New York lawyer he suggested a course of action to Roger: Harvey purchases 49 per cent of Sharpley & Son for $100,000 and the first $20,000 profit each year. At the age of forty, Roger could sell the remaining 51 per cent for a further $100,000. The Board would consist of three voting members - Harvey, Roger and one nominated by Harvey, giving him overall control. As to Roger, he could join the Navy and need only attend the annual shareholders meeting.

Roger could not believe his luck. He did not even consult anyone at Sharpley & Son, knowing only too well they would try to talk him out of it. Harvey counted on this and assessed his plan accurately. Roger gave the proposition only a few day's consideration before allowing to send the legal papers in New York, far enough from Boston to be sure that the firm did not learn about the transaction.

Meanwhile, Harvey returned to the Morgan Bank, that now looked upon Harvey, its customer, as a man with a future. Since banks deal in futures, the manager agreed to help him in his new enterprise with a loan of $50,000 to add to his own $50,000 enabling Harvey to acquire 49 per cent of Sharpley & Son, and become its fifth President. Roger left for Newport to start his Officers Training Programme in the USA Navy. Harvey left for Central Station to catch the train for Boston. He was still twenty-one and the President of his own company.

What looked like disaster to most, Harvey could always turn into triumph. The American people were still suffering under Prohibition, and although Harvey could export furs, he could not no longer import whisky. This was the main reason for the fall in the company profits. But Harvey soon found that with a little bribery to the Mayor of Boston, the Chief of Police and the Customs officials on the Canadian border, plus a payment to the Mafia to ensure that his products reached the restaurants, the whisky imports went up. In three years Sharpley & Son celebrated a hundred years in business. In three years Harvey lost 97 years of goodwill and doubled the profits. It took him five years to reach his first million and only another four to double the sum again. At'that time he decided it was time for Harvey Dickson and Sharpley & Son to part company. In twelve years he raised the profits from $ 30,000 to $910,000. Then he sold the company for $7,000,000 paying $100,000 to the widow of Captain Roger Sharpley of the USA Navy and keeping $6,000,000 for himself.

Harvey celebrated his thirty-fifth birthday by buying at a cost of $4,000,000 a small ailing bank in Boston called Lincoln Trust with unblemished and boring reputation. Harvey intended to change both its reputation and its balance sheet. Harvey increased the Bank's profits to $2 million per annum during the next five years, but his personal reputation was never in credit.

Commentary:

Stock Exchange – фондова біржа; інші: Commodity (товарна), Currency (валютна), Merchandise (товарна), Trade (більшою мірою сільськогосподарська)

to make his fortune – зробити кар’єру

the first bidder – перший, хто запропонував ціну на аукціонному продажі; final bid – остання ціна на аукціоні

to make a codicil to one’s will – зробити приписку до заповіту

to the effect that if – в тому сенсі, якщо

the money gained from the sale – гроші, отримані від продажу

the Board (The Board of Directors) – Рада директорів

voting members – члени (Ради), що мають право голосувати

annual shareholders meeting – щорічні збори акціонерів

to talk smb out of smth – відмовити його від цього

to count on smth – розраховувати на (syn. to reckon on)

legal papers – юридичні документи

a man with a future (contracts) – людина, яка має ф’ючерсні контракти

a small ailing bank – маленький банк, що фінансово занепадає

Prohibition – антиалкогольний закон (США)

2. Say what you have learnt about:

1. Rodger Sharpley and his family business;

2. Harvey Dickson and his ambitions;

3. Harvey’s proposition as to Sharley & Son;

4. the details of the Harvey’s business plan;

5. the goods Harvey dealt with;

6. his first million profit;

7. purchasing a bank by Harvey;

8. the Bank activity and Harvey’s personal reputation.

3. Find English equivalents (column B) of the Ukrainian ones (column A):

A/ Кваліфікований адвокат; подвоїти прибуток; антиалкогольний закон; посильний на біржі; різнитися як два полюси; єдина його мрія; записатися до морського флоту США; купувати; за ціною; балансовий звіт.

B/ A messenger boy at an Exchange; his only dream; to be poles apart; to purchase; to buy; to enlist for the US Navy; skilful lawyer; Prohibition; at a cost of; balance sheet; to double profit.

4. Answer the questions:

• What did Sharpley & Son deal in? Was that company profitable?

• What do you know about the future deals or contracts? Are Ukrainian Stock Exchanges dealing in futures nowadays?

• Why did Harvey ask his bank for a future? Did they grant him a loan?

• What problems did he face at the beginning of his activities? How did he use to overcome them?

5. Read, translate and retell the texts.