BANKING

BANK SERVICES 1. deposit taking 2. money transfer 3. advances (money which a bank lends) 4. other services

1. DEPOSIT TAKING 1. CURRENT ACCOUNT 2. DEPOSIT ACCOUT 3. FOREIGN CURRENCY ACCOUNT 4. GIRO ACCOUNT

Movements in the accounts  put money into the account  withdraw money from the account  be in credit (in the black)  be in debit (in the red, overdrawn)  direct debit (paying bills on POS)  direct credit (paying in salaries)

Bank statement a) date b) details c) debits = money out d) credits = money in e) balance = money in the account

2. MONEY TRANSFER a)encashment (at the counter) b) ATM/cash machine/cash dispenser c)bank credit cards d) standing order

3. ADVANCES a) credit cards b) overdrafts c) mortgages d) business loans e) personal loans

4. OTHER SERVICES a) insurance b) night safe c) safe deposit (box/vaults) d) unit trust e) investment management f) executor and trustee (wills, property) g) taxation advice

TYPES OF BANKS 1.BANK OF ENGLAND/HNB (CENTRAL BANK) 2.COMMERCIAL/CLEARING BANKS 3. MERCHANT BANKS

1. BANK OF ENGLAND 1. Implements monetary policy – limits the fluctuations of the interest rate – prints or destroys money – buys and sells government bonds to and from commercial banks 2. Supervises exchange rates 3. Supervises commercial banking 4. acts as a lender of last resort (bankers’ bank) 5. manages the accounts of government departments 6. manages the Public Sector borrowing and the national debt

2. COMMERCIAL/RETAIL BANKS Make profit from SPREAD (MARGIN) a) receive and hold deposits b) pay money according to customers’ instructions c) lend money d) exchange foreign currencies e) offer advice

3. MERCHANT/INVESTMENT BANKS Make profit from fees and commissions a) raise funds for industry b) finance international trade c) issue and underwrite securities d) deal with takeovers and mergers e) issue government bonds f) offer stockbroking and portfolio services

4. BUILDING SOCIETIES (SAVINGS AND LOAN ASSOCIATIONS - S&L) Lend money to buy property against the security of the property which is being bought

MK: p. 73: Reading: Banks and financial institutions Insert the names of financial institutions in the spaces in the text. p. 74: a) Vocabulary b) Match up the verbs with the nouns

MATCH UP THE VERBS AND THE NOUNS: 1. receive a) capital___________________ 2. charge/pay b) loans/services_____________ 3. offer/provide/grant c) shares/bonds _____________ 4. raise d) interest __________________ 5. issue e) deposits __________________

COMBINE THE WORDS TO FORM BANKING SERVICES: 1.currenta) order ______________________ 2.creditb) fund _______________________ 3.foreign currencyc) card _______________________ 4.internetd) advice _____________________ 5.standinge) teller machine _______________ 6.debitf) account ____________________ 7.depositg) exchange ___________________ 8.automated h) card _______________________ 9.investment i) account _____________________ 10.hedgej) banking _____________________ REMEMBER: borrow from (We borrow money from the bank) lend to (The bank lends us money) (“Can you lend me $5 ?”)

MATCH THE TERMS WITH THEIR DEFINITIONS: 1. bank charges a) money kept in the bank to earn interest 2. interest rate b) money lent to buy property, the property being the security 3. savings c) a sum of money borrowed from a bank 4. overdraft d) what customers pay the bank in return for its services 5. standing order e) the price paid for borrowing money, paid to the lenders 6. loan f) take out more money than you have in your bank account 7. mortgage g) all the investments owned by an individual or organization 8. portfolio h) instruction to a bank to pay an amount at regular intervals Visit a website of a bank in Croatia and write down the bank services they offer. How are they organized?

FILL IN THE BLANKS WITH THE FOLLOWING WORDS: raising, spread, overdraft, deposits, portfolio, loans, takeovers, interest, issue, standing, withdraw, current Commercial or retail banks take ___________and pay _____________ to the depositors. Then they use the deposited money to grant/give __________– a fixed sums of money for a fixed period on which interest is paid. Banks make a profit from the __________ or differential between the interest rates they pay on deposits and those they charge on loans. There are different bank products. A ___________ account usually pays little or no interest, but allows the holder to _____________ his/her cash whenever they want, even more than they have in the account which is known as an_____________. Customers may arrange a ______________ order for paying regular bills at regular intervals. Merchant banks specialise in _____________ funds for industry on the various financial markets, finance international trade, deal with ________________and mergers, ____________ government bonds. They also offer stockbroking and _______________management services.

Commercial or retail banks take deposits and pay interest to the depositors. Then they use the deposited money to grant/give loans – a fixed sums of money for a fixed period on which interest is paid. Banks make a profit from the spread or differential between the interest rates they pay on deposits and those they charge on loans. There are different bank products. A current account usually pays little or no interest, but allows the holder to withdraw his/her cash whenever they want, even more than they have in the account which is known as an overdraft. Customers may arrange a standing order for paying regular bills at regular intervals. Merchant banks specialise in raising funds for industry on the various financial markets, finance international trade, deal with takeovers and mergers, issue government bonds. They also offer stockbroking and portfolio management services.

What have you learnt about the history of money?.