Country bankers

The private goldsmith bankers and the Bank of England were confined to London but, running parallel in development, in the eighteenth century a separate system of banking was developing in the provinces.

The London goldsmiths had made no attempt to expand outside London since trade was flourishing and comfortable compared to midland and northern regions, where transport and communications were not developed.
However, outside London the beginnings of the Industrial Revolution were taking place, which created the need for monetary services. Traders in the north and midlands needed capital for expansion and since in the absence of its supply by London private bankers or the Bank of England, it was left to business men to meet their own needs. The bankers of the country were industrialists, traders, and local revenue collectors; men already experienced in financial transactions.

A great impetus for country banking came in 1797, when the Bank of England suspended cash payments, England being threatened by war. Parliament authorized the Bank of England and country bankers to issue notes of low denomination.

The industrialist banker could assist his own industry since he did not only provide a local means of payment but accepted deposits. Here we have a parallel with the early goldsmith banking.

For the country banks to give an efficient service there was a need for direct links with London to effect payment and avoid the transporting of coin. London held great importance for the country bankers as a money market and an investment center for their surplus income. All bills of exchange and bank drafts were drawn on London, so too were the "London Bill", a form of paper credit, effecting payment between the counties and London.

Important country bankers all had their agents in London.

From 1784 to 1890 the number of banks outside London rose from 119 to 800. In the early 1800's Abingdon with only 4,500 people had three banks; Boston with 7,000 people had six banks and Exeter with a population of 18,000 had seven banks.

The aftermath of the Napoleonic wars at the turn of the century caused uncertainty and depression in the industry, leading to the failure of many banks and rationalization of the system, leaving on the large and more prosperous ones in business.

Joint stock banking

Joint-stock was the name given to companies which are owned by several people who each possessed a certain number of shares in the capital. Their liability for the company's debts would be limited to that amount. That is why most of the major banks of London were established after 1826, as they were able to start with more capital.

At the end of 19^th century joint-stock banking became permissible throughout the United Kingdom. The rest of the century saw a long struggle for survival; the private bankers with the Bank of England on their side against the new joint-stock bankers. Private bankers enjoyed a comfortable living and saw the new joint-stock banks threatening their own business, for it was these men who had fought against joint-stock banking in the Parliament of the early 1880s. In 1854, the new bankers were admitted to the Clearing House, a bankers institution in London for exchanging bills and cheques and settling balances, which was to give them greater strength.

The first joint-stock bank was opened in Lancaster in 1826. The private banks were absorbed by the joint-stock banks, making larger and larger concerns. This process was to reach its culmination at the end of the first world war, when the Big Five took shape.

1854 saw the entrance of the joint-stock banks to the Clearing House which was to revolutionize the cheque. The achieve this the major banks had to take over London banks. In 1884, Lloyds Bank, previously confined to the midlands, took over two famous London banks whilst the Birmingham Banking Company entered London, by absorbing the Royal Exchange Bank.

The pattern of amalgamation continued and by 1936 had emerged as eleven banks, holding a total of over £2,000,000,000 of which the Big Five accounted for 87%. The twentieth century showed services in foreign exchange, and trustee and executor business were beginning to replace competition in price and size.

Joint-stock banks began to open more branches, a system which seemed likely to provide a more stable structure and one more suited to the needs of the now advanced Industrial Revolution. However, the branches needed to be controlled from Head Office, which was to prove difficult with poor communications and lack of skilled men.

In 1833, an Act of Parliament permitted joint-stock banks in London, and confirmed the legality of cheques drawn on them. The use of cheques made for more rapid commercial transactions. Where cheques were drawn and paid at different branches of the same bank, they could be cleared through Head Office, a system of internal debiting and crediting, which took several days. Access to the London Bankers Clearing House was still denied to joint-stock banks until 1854.

The second half of the nineteenth century was an age of British industrial and commercial supremacy, which called for an expansion of the services provided by the established banks. For example, the London and Manchester Bank had four branches in 1850, and seven by 1865.

Many of the old private and small joint-stock banks were unable to meet the demands of the growing industrial nation, so were forced to sell out. The reason for the improvement of the branch system was the removal of legislative obstacles, the growing dominance of the cheque, the completion of the railways and the development of the telegraph.

Two world wars had little effect of the banking structure of the country. The amalgamations at the end of the First World War were the culmination of the long process of structural development. A massive branch banking system had grown out of the piecemeal development of the past.

In 1918 there were five large banks and six smaller survivors, which caused widespread fear that competition would be restricted if the process was carried further. However, this view changed when it was seen that five or six banks in the same High Street could operate at maximum efficiency. In 1967 the National Board for Prices and Incomes put forward the case for further amalgamation and rationalization, Since then a lot of mergers have followed, leaving the Big Four and two smaller banks in England and Wales.

Like their predecessors of hundred years ago, today's bankers seek to extend their business in every possible aspect, developing foreign exchange, finance of foreign trade and trust services. Within their own system a very high degree of mechanization has occurred; all branches now having a computer linked to a vast network for time saving, greater efficiency and speed.

The credit card system, first introduced in 1966 from a well-established American tradition, has now been undertaken by all the major banks and may prove to be an innovation with far reaching effects. Cash dispensers, cheque cards and budget accounts are other recent services offered to aid the convenience of the customer, while the more recent Euro-cheque system enables a traveller in Europe to cash his down British cheque in the currency of the country where he is staying.

The banks are showing no signs of standing still, pushing for fresh ideas of diversification, discussing an all-electronic future and, unlike their predecessors, are willing to inform the public of their intentions through advertising and public relations.

The goldsmiths who set up as bankers three hundred or more years ago would recognize the essentials of today's banking, but they would be surprised by its ramifications.

Vocabulary list

1. to be chartered by the government – получить привилегию от правительства

2. to issue notes – печатать бумажные деньги

3. to be privately owned – являться частной собственностью

4. clearing house – Клиринговая Палата (учреждение, занимающееся взаимными расчетами между своими членами/банками)

5. joint stock – акционерный

6. monetary policy – кредитно-денежная политика

7. lender of last resort – последний кредитор в критической ситуации

8. interest rate – процентная ставка

9. to effect payment – производить оплату

10. branch – отделение, филиал

11. to draw a cheque – выписать чек

12. to operate at maximum efficiency – функционировать, работать максимально эффективно

13. diversification – диверсификация

Notes

1. to govern operations in the national interest – зд. контролировать операции в интересах государства

2. to develop techniques – разрабатывать методы

3. to discourage borrowers – отпугивать заемщиков

4. to be confined to – быть ограниченным

5. flourishing – процветающий

6. revenue collectors – сборщики налогов

7. impetus – импульс, стимул

8. the Big Five – пять ведущих английских банков

9. a bank draft – тратта, переводной банк
syn. payment order

10. agents – посредники

11. liability – обязательство; пассив

12. to take over – занять, захватить

13. a system of international debiting and crediting – система международного дебетования и кредитования

14. supremacy – господство

15. legislative obstacles – препятствия юридического характера

16. amalgamation – объединение

17. piecemeal – частичный, постепенный

18. far-reaching effects – далеко идущие последствия

19. discount rate – учетная ставка

20. short-term capital – краткосрочный капитал

21. to suspend cash payments – приостановит наличные платежи

Ex 1. Suggest the Russian equivalents:

chartered by the government in return for a loan; gradually evolved into; sole authority; eventually; turn for aid; hard pressed; have the opposite effect; become permissible; enjoy a comfortable living; running parallel in development; experienced in financial transactions; threatened by war; notes of low denomination; avoid the transporting of coin; surplus income; limited to that amount; to reach culmination; the pattern of amalgamation continued; lack of skilled man; time saving, greater efficiency and speed; to cash a cheque; no signs of standing still.

Ex 2. Fill in the gaps with the words and expressions from the text.

1. Although started as a private bank, it …… a Central Bank.

2. By the 19^th century, the Bank of England had also …… another function associated with central banking – that is being ……, to which other banks could …… when they were ……

3. During the 19^th century the Bank of England …… regulating interest rates.

4. A great …… for country banking came in 1797, when the Bank of England ……, England being ……

5. Joint-stock was the name given to companies which are …… who each …… a certain number of shares in the capital.

6. 1854 saw the entrance of …… to the Clearing House.

7. The pattern of …… continued and by 1936 had emerged as eleven banks, holding a total of over 2 million funds, of which …… 87%.

8. In 1833, an Act of Parliament …… joint-stock banks in London, and …… of cheques …… them.

9. A massive …… had grown out of …… of the past.

10. Like their …… of hundreds years ago, today’s bankers seek …… in every possible aspect.

Ex 3. Find in the text the English equivalents for the following:

исключительное полномочие; обратиться за помощью в случае нужды; считаться очень важным; сохранение международной системы золотого стандарта; иметь противоположный эффект; влиять на денежную массу; развивать параллельно; выпускать банкноты малого достоинства; денежный рынок; избыточный доход; ответственность за долгие компании; борьба за выживание; достичь кульминации; более приспособленный к требованиям; отвечать требованиям; ограничить конкуренцию; функционировать максимально эффективно; обналичить чек; выдвигать новые идеи.

Ex 4. Match each term with the appropriate explanation.

Central bank, discount rate, monetary policy, joint-stock company, cheque, gold standard, the Clearing House, diversification

1. The amount charged for a loan, usually expressed as a percentage of the sum borrowed.

2. A company owned by several people who each possessed a certain number of shares in the capital.

3. The control, by the government, of a country’s currency and its system for lending and borrowing money, especially through the supply of money.

4. A monetary system under which the value of the standard unit of currency is by law equal to a fixed weight of gold.

5. An organization based in London for exchanging bills and cheques and other means of payment and settling balances.

6. A direction in writing to a bank to pay a stated sum of money on demand to a named person or organization, or to his or their order, or to bearer.

7. A financial institution conducts the monetary policy by affecting the country’s money supply.

8. The production and offering of a wide range of products, or the running of a number of completely different activities, in order to reduce the risk of losses when business is bad.

Ex 5. Answer the questions and do the assignments.

1. How was the Bank of England established? What accounted for its growth?

2. How does the Bank of England act as a “banker’s bank” and the “lender of last resort”?

3. Expand on the role of the private goldsmith bankers in the development of the British banking system/

4. What’s joint-stock banking? How was it developing?

5. What was the beginning of branch banking? What was the opening of more branches necessary? What accounted for the improvement of the branch system?

6. Characterize the present day banking system of Great Britain. If necessary, use external sources to supplement your answer.

Ex 6. Find in the text the words and phrases that refer to the following notions and comment on them:

1) a practical monopoly of the note issue

2) to conduct monetary policy

3) the need for monetary services

4) the pattern of amalgamation

5) diversification of banking services

Ex 7. Comment on the statements.

1. “The bank … had long governed its operations in the national interest.”

2. “The industrialist banker could assist his own industry since he did not only provide a local means of payment but accepted deposits. Here we have a parallel with the early goldsmith banking.”

3. A massive branch banking system had grown out of the piecemeal development of the past.

Ex 8. Increase your vocabulary.

A. Study the word combinations with the word “bank”. Use them in the sentences of your own.

affiliate bank/bank branch – филиал банка

card issuing bank – банк, выпускающий кредитные карты

big bank – крупный банк

country/rural bank – провинциальный банк

databank – банк данных

leading bank – ведущий банк

major bank – крупный, влиятельный банк

state bank – государственный банк

private bank – частный банк

bank of good standing – банк с солидной репутацией

to run a bank – управлять банком

banking – банковские операции, банковское дело

Other adjectives: commercial/business, clearing, first-class, investment, international, foreign/overseas.

Verbs: to bank, to pay into, to draw on, to deposit money with.

B. Translate.

1. Это крупный, влиятельный банк, имеющий множество филиалов.

2. Он управлял одним из ведущих банков страны.

3. Мой брат учится в Финансовом университете и собирается заниматься банковским делом.

4. Наша компания имеет тесные связи с иностранными банками.

5. В наше время многие люди предпочитают класть деньги в банк, а не хранить их дома.

6. Эта компания располагает обширным банком данных о клиентах.

7. Мы держим свои деньги в провинциальном банке. Это небольшой частный банк, но он пользуется солидной репутацией.

Writing

Task I. Make up sentences matching the left and the right halves. Write them down.

A central bank

acts administers affects buys clears controls determines finances influences issues sets transfers makes operates performs provides sells

a regulatory function as a “banker’s bank” banking facilities banknotes and coins checks the national debt foreign money exchange funds between banks independently of its government interest rates loans monetary policy and reserves of gold the value of its country’s currency on the international market reserves of gold and foreign currencies reserves of gold and foreign currencies rules for how banks can operate the money supply

Task II. Prepare an outline of the history of English clearing banks. Write down an extended plan, reflecting the major stages of the British banking system development.

Task III. Fill in the table giving characteristics of the main types of banking throughout history.

	Features	Services provided
Ancient banking
Goldsmith’s banking
Country banking
Joint-stock banking
Branch banking
Present day banking

Task IV. Write a summary and a GIST of each Text.

Speaking

Task I. Act as an interpreter for parts A and B.

1. Наша дискуссия сегодня посвящена истории банковского дела Великобритании. Мы пригласили ведущего специалиста в этой области, известного экономиста и историка, профессора Лондонского Университета, доктора Дэвида Арнольда. Профессор Арнольд – автор множества книг и научных статей по истории банковского дела и, без сомнения, сможет рассказать нам много интересного. Итак, профессор, первый вопрос: каковы истоки банковского дела? Существовало ли оно в примитивных сообществах? 2. Все мы знаем, что современное слово «банк» происходит от итальянского “banko”, то есть скамья. Итальянские купцы и торговцы оказали большое влияние на развитие банковских услуг, не так ли? 3. А что обусловило необходимость банковских услуг в Великобритании? Ведь финансовые услуги нужны тогда, когда экономические отношения достигают определенного уровня и у людей появляются излишки денежных средств. 4. Мы знаем, что первые банковские услуги оказывались ювелирами, так как, во-первых, их ремесло было тесно связанно с деньгами и ценностями, а во-вторых, они имели подходящие помещения для их хранения. А какие финансовые документы использовались в то время? Похожи ли они на современные платежные документы? 5. Спасибо большое за интересную беседу, профессор. Мы надеемся продолжить дискуссию в ближайшем будущем, ведь история Британского банковского дела очень поучительна и интересна.

Well, first of all I’d like to express … Answering this question I can’t but mention …     Yes, you are right to some extent…     Well, you are quiet right in saying that… In this respect I’d like to…     As for the goldsmiths, they were really the first to …. Speaking about documents I must say that…     Oh, I’d be pleased to…

Task II. Continue the above discussion touching upon the major stages of the British banking development. Compose questions of your own and use the material of Texts A and B to answer them.

Task III. Render the Texts in the form of a presentation. Use the appropriate structure and visual aids.

Task IV. Do research of your own on the origins of banking in the USA. Compare them with those in Gr. Br. Make a presentation.

Part 2

Read the passage below and match each paragraph with the appropriate heading.

A. Specialties

b. Who employs economists?

c. Practice or theory?

D. Associated careers

E. Duties

F. Required skills

G. Required degrees

Career: Economist

1)____

The field of economics rewards creative and curious thinkers. Economists study data and statistics in order to spot trends in economic activity, economic confidence levels, and consumer attitudes. They assess this information using advanced methods in statistical analysis, mathematics, computer programming; finally they make recommendations about ways to improve the efficiency of a system or take advantage of trends as they begin.

2)_____

While economists were previously relegated to the academic and government communities, they are now finding employment in significant numbers throughout the private sector. The number of privately owned economic consulting firms has grown by about 150 percent over the last six years, to reach about 5,000 as of this writing. These firms offer advice to and predict economic scenarios for individuals and large corporations, and occasionally act as consultants to branches of the government. However, universities and research groups remain the largest employers of economists, followed by the government. “I love being an economist. I get a glimpse of the future, or what we think it’s going to be,” raved one economist we surveyed. High levels of satisfaction are found throughout this field, which encourages discussion, detailed examination, and lively disagreement.

3)_____

Economists work closely with each other and share ideas fairly easily, which leads to a strong sense of community within the profession. Perhaps the most challenging aspect of the profession is its highly theoretical nature. One ex-partner of a private advertising and economics firm wrote, “It’s all numbers which assume perfect market behavior. People don’t work that way. The don’t buy according to their optimal strategy; they buy because they feel like it.”

4)_____

The lack of a clear-cut relationship between theoretical modeling and reality eats away at some economists’ belief in what they do. The daily routine of each economist is determined by the specialty chosen. Financial economists meet with members of Wall Street firms and government officials to predict the movement and pace of global financial markets. International economists may spend as much as 30 percent of their time traveling and 40 percent of the time on the phone researching current trends in foreign economic systems (for this subgroup, language skills are important). Other fields include agricultural economics, labor economics, and law and economics.

5)_____

Graduates with bachelor’s degrees in economics find entry-level positions in which their primary responsibilities are the collection, assimilation and preparation of data. For positions with greater responsibility, such as those in teaching or government, a master’s degree or Ph.D. is required. The more quantitative course requirements of the economics major include statistics, regression analysis, and econometrics. These form the core of business life, but at the same time, those who are comfortable with the written or spoken word have a significantly higher rate of advancement and overall job satisfaction than those who are not.

6)_____

Applicants should be comfortable with computers, numbers, and long academic papers. Many women who start in academia find they are more successful in the private sector. The ability to distinguish yourself from other economists is key, but can be difficult, especially within a particular company’s or industry’s accepted economic assumptions. Creative thinkers and those who have taken cross-discipline course loads, such as philosophy or marketing, seem to find it easier to break from the pack and propose new, interesting additions to the economic canon. Technological breakthroughs bring countless new possibilities to economic analysis for economists to explore and present.

7)_____

Economists who leave the profession find a wide range of careers open to them. Their statistical and mathematical skills make them well-suited for careers as statisticians, bankers, stockbrokers, options traders, equity research analysts, and any other profession that requires systems modeling. Their research and writing skills allow them to become financial journalists, research analysts, academics in other fields, and administrative managers.

(http://www.princetonreview.com/careers.aspx?cid=56)

Ex 1. Complete each sentence with the correct ending A-F from the box below.

A. this field operates mostly with data and figures rather than with people’s desires and feelings.

B. they have a lot of opportunities to develop new theories together or consider each other’s opinions.

C. those who have an ability to get a glimpse of the future usually experiences high levels of satisfaction with the profession.

D. economic attitudes and ideas accepted within a certain professional community are more or less the same.

E. many more opportunities to find a wide range of careers open to them.

1. The field of Economies rewards creative and curious thinkers because…

2. Economists are always ready to share opinions, …

3. The most challenging aspect of the profession is that …

4. Those economists who are good at writing or speaking have …

5. Sometimes it may be difficult to distinguish oneself from other economists as …

Ex 2. Speak about your choice of profession using words and word combinations given below. Why have you decided on Economics as you future job? Do you think you’ll make a good economist? Why?

- to spot trends in economic activity

- to improve the efficiency of a system

- to find employment

- to predict economic scenarios

- to act as consultants

- to share ideas

- primary responsibilities

- the core of business life

- overall job satisfaction

- creative thinkers

- cross-discipline course

- to break from the pack

- technological breakthroughs

- to be well-suited for

Ex 3. Work in pairs. Discuss advantages and disadvantages of a certain profession. Make use of the following plan:

1. Required degree

2. Required skills

3. Demand

4. Salary

5. Responsibilities

6. Employment

7. Career prospects

8. Pros and Cons

Ex 4. Use additional sources and find some more detailed information about the work schedule of a financial economist (an international economist). Be ready to speak on it in class or make up dialogues (in the form on interviews).

Unit IX

Part 1

Globalization

globalization, integration, cross-border trade, driver, pros and cons, dissemination of information, transfer, interdependence

Text A

Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

Globalization is not new, though. For thousands of years, people—and, later, corporations—have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages. Likewise, for centuries, people and corporations have invested in enterprises in other countries. In fact, many of the features of the current wave of globalization are similar to those prevailing before the outbreak of the First World War in 1914.

But policy and technological developments of the past few decades have spurred increases in cross-border trade, investment, and migration so large that many observers believe the world has entered a qualitatively new phase in its economic development. Since 1950, for example, the volume of world trade has increased by 20 times, and from just 1997 to 1999 flows of foreign investment nearly doubled, from $468 billion to $827 billion. Distinguishing this current wave of globalization from earlier ones, author Thomas Friedman has said that today globalization is “farther, faster, cheaper, and deeper.”

This current wave of globalization has been driven by policies that have opened economies domestically and internationally. In the years since the Second World War, and especially during the past two decades, many governments have adopted free-market economic systems, vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining feature of globalization, therefore, is an international industrial and financial business structure.

Technology has been the other principal driver of globalization. Advances in information technology, in particular, have dramatically transformed economic life. Information technologies have given all sorts of individual economic actors—consumers, investors, businesses—valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of economic trends around the world, easy transfers of assets, and collaboration with far-flung partners.

Globalization is deeply controversial, however. Proponents of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of living, while opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people. Resistance to globalization has therefore taken shape both at a popular and at a governmental level as people and governments try to manage the flow of capital, labor, goods, and ideas that constitute the current wave of globalization.

The Pros and Cons of Globalization

Pluses:

• Productivity grows more quickly when countries produce goods and services in which they have a comparative advantage. Living standards can go up faster.

• Global competition and cheap imports keep a lid on prices, so inflation is less likely to derail economic growth.

• An open economy spurs innovation with fresh ideas from abroad.

• Export jobs often pay more than other jobs.

• Unfettered capital flows give the U.S. access to foreign investment and keep interest rates low.

Minuses:

• Millions of Americans have lost jobs due to imports or production shifts abroad. Most find new jobs–that pay less.

• Millions of others fear losing their jobs, especially at those companies operating under competitive pressure.

• Workers face pay-cut demands from employers, which often threaten to export jobs.

• Service and white-collar jobs are increasingly vulnerable to operations moving offshore.

• U.S. employees can lose their comparative advantage when companies build advanced factories in low-wage countries, making them as productive as those at home

Vocabulary list

1. integration – объединение, интеграция; укрупнение
v. to integrate – объединять; укрупнять

2. interaction – взаимодействие, сотрудничество
v. to interact

3. cross-border trade – трансграничная международная торговля

4. productive potential – производственный потенциал

5. to promote – способствовать, продвигать
n. promotion

6. defining feature – определяющая черта

7. driver – движущая сила
syn. driving force

8. advances – достижения

9. controversial – спорный, противоречивый

10. proponent – защитник, сторонник
ant. opponent

11. to benefit – приносить пользу
to benefit from – извлекать пользу

12. at the expense of somebody, something – за счет кого-либо

13. resistance (to) – сопротивление (чему-либо)
v. to resist smth

14. transfer – переход, перевод

15. intellectual property – интеллектуальная собственность

16. interdependence – взаимозависимость

17. vulnerability (to) – уязвимость, подверженность
adj. vulnerable

Notes

1. prevailing – преобладающий

2. a decade – десятилетие

3. a qualitatively new phase – качественно новая фаза

4. dramatic reductions – зд. значительное уменьшение, снижение

5. at a popular level – на уровне населения

6. a daily routine – зд. обычное явление

7. unfettered – неограниченный

Ex 1. Find the Russian equivalents:

a process driven by international trade; human physical well-being; the current wave of globalization; the outbreak of the 1^st world war; to adopt a free-market economic system; barriers to commerce; taking advantage of new opportunities; an international industries and financial business structure; the driver of globalization; deeply controversial; to benefit corporations at the expense of local enterprises; to take shape both at a popular and at a government level; interdepence of different countries’ economies; multinational integrated structures; vulnerability to local and regional instability.

Дата добавления: 2015-10-29