Vocabulary Notes

BANKS

Every country needs a central institution with a wide range of powers to look after its monetary system; in other words, it needs a central bank. Central banks, such as the Bank of England, the Federal Reserve System of the United States (comprising 12 federal reserve banks), the Deutsche Bundesbank, and the Osterreichische National bank, are typically charged with all, or at least most, of the following functions.

1. Central banks are responsible for an adequate supply of legal tender, i.e. of banknotes and coins that have to be accepted in settlement of debts. Usually, the central bank is the sole note-issuing bank in a particular country. The minting of coins in frequently the responsibility of a separate institution under the control of a central government department (e.g., the Royal Mint in Great Britain).

2. Central banks are bankers' banks, i.e. they perform certain tasks for commercial and specialized banks, just as these banks perform services for their own clients. Commercial banks keep accounts with the central bank. These accounts may be used to settle the net positions resulting from the clearing of cheques and credit transfers. Moreover, the commercial banks borrow directly or indirectly from the central bank, especially if funds are not available from other sources, the central bank acting as a lender of last resort. In addition, central banks are frequently charged with supervising and regulating the banking system of the country in which they operate.

3. A central bank also acts as a banker to its government, typically managing the national debt, handling or superintending the issue of government stocks and Treasury bills, making shorter advances to the government, providing advice on financial matters, etc.

4. More importantly, central banks are concerned with the implementation of monetary policies. They regulate a country's money supply by open-markets operations, by calling for special deposits (U.S.: legal reserves), by influencing interest rates, and by operating direct controls on bank lending. But they are also active on the external front, intervening in the foreign exchange markets to control the rates of exchange, and generally managing the external aspects of monetary policy, such as exchange controls, foreign exchange reserves (including Special Drawing Rights), etc.

In performing these tasks, central banks in different countries enjoy different degrees of autonomy from their governments. The Bank of England, for instance, is closely controlled by the Treasury, which since 1946 has had statutory powers to give directions to it. The Federal Reserve System of the United States, on the other hand, is able to steer a much more independent course.

Vocabulary Notes

a wide range of powers широка сфера повноважень

to be responsible for бути відповідальним за

legal tender законний платіжний засіб

settlement вирішення

to issue випускати

clearing безготівкові розрахунки

last resort останнє звернення

to be charge with supervising надано право нагляду

to handle керувати, регулювати

to superintend управляти, наглядати, завідувати

to provide advice надавати поради

implementation здійснення, втілення

money supply грошові ресурси

external зовнішній

to interfere втручатися

for instance наприклад

to steer вести, направляти, керувати

independent course незалежний курс

Дата добавления: 2015-11-14