11. Read and translate text b using a dictionary Text b

Banks perform the widest range of functions in the economy and consequently any modern full-service banking institu­tion should provide the widest variety of services.

Banks may be defined as firms producing and selling financial services. Their success or failure hinges on their ability to identify the financial services 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 be­ing introduced and developed by commercial banks. Many of them offer a combination of wholesale and retail banking. The former pro­vides large scale services to the corporate sector. The latter mainly provides smaller scale services to the general public.

The 1980s ushered in an explosion of new service options. Many of the new services have simply been variations of traditional deposit and loan product. Other innovative services, however, have broken new ground and exposed bankers to all the uncertainty and risk associated with new product development.

Trust services are one of the most important and rapidly grow­ing bank service areas today. Bank trust operations encompass the management of property and other assets owned by a bank customer and the administration of a customer's security holdings and borrow­ings. In offering trust services the bank places itself as authorized agent between the marketplace and the customer, making investment and management decisions on the customer's behalf and dispensing funds when needed to cover the customer's obligations. A bank's trust operations are usually divided into three broad areas: (1) per­sonal trust services, (2) business trust services, and (3) trust services for charities and nonprofit organizations. Each involves a fiduciary relationship between bank and customer — that is, a trust department acts to benefit its customers within those areas defined by contract (the trust agreement) between the bank (trustee) and the customer (trustor) covering a specified period of time.

Banks provide a wide range of trust services for individuals and families in the form of estate settlement, trust administration and agency services. Bank trust divisions act as agents for corporations and other businesses in a host of different ways. This may involve issuing securities on the business customer's behalf, paying dividends or interest owed on any securities issued, reinvesting the dividends for securities holders who request that service, and retiring the secu­rities at maturity.

Under the terms of the Federal Trust Indenture Act of 1939, any foreign or domestic corporation that issues securities to the general public in the United States must designate a trustee for that security issue to act as a fiduciary, representing the investors purchasing those securities. Trust departments also handle transfers of ownership of corporate stock, stock splits, and conversions of stock into debt, and they issue proxies and count votes in connection with annual stockholder meetings.

Today, banks frequently serve as trustees under indenture*, holding legal title to property securing a bond issue, with the power to foreclose** on and liquidate that property if the issuer defaults. The bank as trustee must make sure all bond covenants agreed to*** by the issuing corporation and that all required liens against the company's property are duly filed and recorded. The trust depart­ment will set up and manage a sinking fund, investing all monies that the bond issuer contributes to that fund periodically with the intent of eventually redeeming the bond issue.

The fiduciary activities of banks make a critical contribution to the functioning of the commercial paper market, where the unse­cured, short-term notes of large corporations (both foreign and do­mestic) are traded. Bank trust departments keep records on which investors purchase commercial paper, see that any notes purchased are actually delivered to the investors involved, and pay off the hold­ers of those notes on the maturity date.

Many banks today would like to offer real estate brokerage services to their customers, selling a home or commercial structure and then financing the sale. For generations banks have made loans to finance the construction of business facilities and private houses. While preferring to stick predominantly to short-term construction financing, banks have also taken on a limited volume of long-term commercial and residential real estate mortgages in which the mort­gaged property being a home or a commercial structure. Mortgage loans are among the riskiest forms of bank credit, though they can be sold quite readily in the secondary market. Sometimes banks acquire realty companies in order to be able to offer a larger menu of finan­cial services.

* under indenture - по контракту;

**to foreclose – лишать права пользования;

***to agree to a covenant — прийти к соглашению по всем обяза­тельствам, вытекающим из договора.