Questions:

1. What responsibility does the central bank accept?

2. What is the aim of commercial banks?

3. What is the difference between wholesale and retail banking?

4. Who is at the head of the bank?

5. What main divisions of a bank do you know? Enumerate them.

6. There is often close contact between top management and the management and staff of each line division. Why is it so important?

Bank services

Banks may be defined as firms producing and selling financial services. Their success or failure depends on their ability to identify the financial services which the public demands, produce those services efficiently, and sell them at a competitive price. The service menu of banks does not remain unchanged as new services are constantly developed by banks. Many of them offer a combination of wholesale and retail banking.

The most important functions of a central bank are to accept responsibility for advising the government to make the country’s financial policy, to issue national currency, to regulate money supply and to supervise commercial banks. The aim of commercial banks is to earn profit and they are reaching it by providing different services to customers for the price which is called interest.

There are two general reasons for using bank accounts. The first and most common is the convenience and safety provided by a current account at a bank. The second is that small and regular surpluses are available to be saved, and for this purpose a bank provides deposit accounts.

So, a full range of banking services is offered to customers of the bank:

* It is a safe place for your money. You can open savings (deposit) account and earn interest. There are many different term-deposit accounts. Since these certificates of deposit offer very high interest rates they attract depositors to banks. To receive this high interest you needn’t withdraw money till the term is due, otherwise you will lose it;

* Banks open checking (current) accounts, which pay no interest to a customer but provide him with a checking book to write checks and pay any purchase or transaction. Recently new NOW and Super NOW accounts which pay customers interest have appeared in most banks;

* Banks offer credit services to customers: personal loans and different credit cards. They finance industries, commerce and direct services by commercial loans;

* Banks provide their customers with such classes of credit as overdraft, mortgages and home improvement loans;

* Banks provide their customers traveling abroad with foreign currencies, travelers checks (cheques), eurocheques, euro cards;

* Investment advice: banks open ways to find and invest large amounts of money;

* Banks provide brokerage services;

* Banks provide a wide range of trust services for individuals and businesses in the form of estate settlement, trust administration of a customer’s securities, the management of property and agency services.

Vocabulary:

failure – банкрутство, невдача

competitive price – конкурентна ціна

interest – відсоток

convenience – зручність

safety – безпека

current account – поточний рахунок

surplus – прибуток, профіцит

deposit account – депозитний рахунок

range – асортимент (послуг)

certificate of deposit (CD) – депозитний сертифікат

to withdraw – вилучати, знімати (гроші з рахунку)

due – до сплати

NOW (negotiable order of withdrawal) account – рахунок ОНВК (з обіговим наказом про вилучення)

commerce – торгівля

overdraft – овердрафт (технічний кредит, перевищення кредиту по рахунку)

mortgage – позика під заставу майна

securities – цінні папери