Unit 14 Banking

Aim of teaching: This unit aim to teaching the business concepts and ideas in banking, including types of banks, operation of banking business, and the English expression and vocabulary concerning banking business. Credit hours: This unit is to be finished in 6 hours.

1.Personal banking 1a Vocabulary Match these terms with the definitions below cash card cash dispenser (GB) or ATM (automated teller machine) (US) credit card home banking loan mortgage overdraft standing order or direct debit current account (GB) or checking account (US) deposit account (GB) or time or notice account (US)

1 an arrangement by which a customer can withdraw more from a bank account than has been deposited in it, up to an agreed limit; interest on the debt is calculated daily 2 a card which guarantees payment for goods and services purchased by the cardholder, who pays back the bank or finance company at a later date 3 a computerized machine that allows bank customers to withdraw money, check their balance, and so on 4 a fixed sum of money on which interest is paid, lent for a fixed period, and usually for a specific purpose 5 an instruction to a bank to pay fixed sums of money to certain people or organizations at stated times

6 a loan, usually to buy property, which serves as a security for the loan 7 a plastic card issued to bank customers for use in cash dispensers 8 doing banking transactions by telephone or from one's own personal computer 9 one that generally pays little or no interest, but allows the holder to withdraw his or her cash without any restrictions 10 one that pays interest, but usually cannot be used for paying cheques (GB) or checks (US), and on which notice is often required to withdraw money

1b. Discussion 1 Which of the banking facilities listed in la do you use? 2 What other services do commercial banks offer in your country? 3 What changes have there been in personal banking recently? 4 What further changes do you foresee in the future?

2. The banking industry 2a.Reading Read the text on page 86 and write short headings (one or two words) for each paragraph. Word study

2b Comprehension Vocabulary study   Which of the three paragraphs on page 87 most accurately and concisely summarizes the text, and what is wrong with the others?  Vocabulary study

First summary: Commercial banks hold customers' deposits and make loans. Investment banks raise funds for industry. Deregulation in Britain and the US has led to the creation of financial conglomerates similar to the universal banks that have always existed in German-speaking countries. A country's minimum interest rate is usually fixed; banks charge progressively higher rates to less secure borrowers. Many banks also do Eurocurrency business - lending foreign currencies, notably dollars, at lower rates than in the currencies' home countries.

Second summary: Commercial banks receive deposits and make loans. Investment banks arrange security issues and offer other investment services. Yet the traditional distinction between commercial and investment banks has now broken down. Domestic interest rates are fixed by central banks. Many banks also have branches abroad that do Eurocurrency business, making loans in other European currencies.

Third summary: Commercial banks receive deposits, lend money, and provide other services. Merchant and investment banks lend money to industry. British and American banks are now joining together in conglomerates. The interest rates that banks charge depend on the borrowers' creditworthiness. European banks also do a lot of Eurodollar and petrodollar business.

1 to place money in a bank; or money placed in a bank 2C. Vocabulary: Find the words or expressions in the text in 2a which mean the following. 1 to place money in a bank; or money placed in a bank 2 the money used in countries other than one's own 3 how much money a loan pays, expressed as a percentage 4 available cash, and how easily other assets can be turned into cash 5 the date when a loan becomes repayable 6 to guarantee to buy all the new shares that a company issues, if they cannot be sold to the public 7 when a company buys or acquires another one

8 when a company combines with another one 9 buying and selling stocks or shares for clients 10 taking care of all a client's investments 11 the ending or relaxing of legal restrictions 12 a group of companies, operating in different fields, that have joined together 13 a company considered to be without risk 14 ability to pay liabilities when they become due 15 anything that acts as a security or a guarantee for a loan

2d Vocabulary The text in 2a contains a number of common verb-noun partnerships (e.g. to lend money, to finance international trade). Match up the verbs and nouns below to make common collocations.   charge do exchange issue make offer pay raise receive underwrite advice bonds business currencies deposits funds interest loans profits security issues

3 Getting a loan   Three different groups of inexperienced young business people in a small town require capital for their businesses. They all apply to the local branch of Megabank. The three groups of would-be borrowers must develop financial arguments that they think will convince the bankers. The group preparing the role of the bankers has to think of questions about the viability of the future businesses: will they be successful, and why? Or why might they not be successful?

The roles are: 1 A Junior manager (and assistants) at the bank, responsible for new local small businesses. To lend or not to lend, that is the question. 2 A group of young people who want to open a small specialist record shop selling CDs of dance music. 3 A group of young people who want to buy an existing take-away pizza business (the lease on the premises, the kitchens, the delivery scooters, and so on). The business is profitable, and well-known in the town, with loyal customers. The new owners can keep the same telephone number, and either keep or change the name. 4 A group of students who already operate a part-time computing consultancy service, advising small businesses on what hardware and software to buy, and how to set up a website. They want to borrow money to buy more computers for themselves, on which to try out elaborate new software programs.

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