Reading drills

1. Practise the pronunciation of the following words:

a) stress the first syllable:

bank, safe, lend, fund, business, temporarily, functional, saver, borrower, cash, gain, asset, debt, property, possession, claim, balance, interest, loan, bond, statement, sheet, customer, prosper.

b) stress the second syllable:

fulfil, distinct, community, provide, excess, examine, liability, condense, return, invest, investment, attract, attractive, liquidity, convert, deposit, reflect, effect, increase, diversify.

c) stress the third syllable:

institution, understanding, obligation, introduce.

Text B

Banks fulfil two distinct needs in a community. For one they provide a safe place for people to deposit their money¹. For another, they lend excess funds² to individuals and business temporarily in need of cash³. In effect, banks act as functional institutions that bring savers and borrowers together⁴.

To gain a clear understanding⁵ of the way in which a bank operates, let us examine the bank’s liabilities⁶ and assets⁷.

Its liabilities are the debts and obligations to others. Its assets are the properties, possessions, and claims on others. These liabilities and assets generally are put together in the form of a balance sheet — condensed statement showing all assets and liabilities at a given point of time.

The balance sheet also reflects net worth — the excess of assets over liabilities⁸, which is a measure of the value of a business.

Most bank deposits return to the community in the form of loans. The bank, however, might invest some of the cash in bonds. The bonds would be a good investment for two reasons. One is that they earn the interest⁹ and therefore are more attractive than cash. The other is that they have a high degree of liquidity¹⁰, that is they can be converted into cash in a very short period of time. The liquidity adds to the bank’s ability to serve its customers. When the demand for loans increases, the bonds can be sold and the cash loaned to customers.

In time, the bank would grow and prosper diversifying its assets and liabilities in the process. It might use some of its excess funds to buy state or local bonds. It might loan some funds on a short-term basis to other banks. Then, too, a bank might use some of its assets to buy an interest in another business. The bank also might try to attract more depositors by introducing different kinds of accounts. Once the bank attracts more funds, it can make more loans and more profits.

COMMENTS

1. to deposit their money — для збереження вкладів

2. to lend excess funds — надавати кредит

3. ... in need of cash — коли потрібні гроші

4. ... that bring savers and borrowers together — що з’єднує кредиторів і дебіторів

5. to gain a clear understanding — щоб мати чітке уявлення

6. liabilities — пасив

7. assets — актив

8. the excess of assets over liabilities — перевищення активів над пасивами

9. ... they earn the interest — на них нараховується відсоток

10. liquidity — ліквідність

Дата добавления: 2015-11-14