Banking
Business Lesson 1
New Vocabulary
to withdraw money
снимать деньги
financing
финансирование
loss profit
упущенная выгода
prime cost
себестоимость
sum
сумма
profitability
рентабельность
discount
скидка
insurance
страховка
fine
пеня
value
ценность
sponsor
спонсор
to change money
менять деньги
to pay damages
выплачивать компенсацию
transaction
операция
turnover
оборот
extra pay
доплата
signature
подпись
rouble
рубль
inflation
инфляция
devaluation
девальвация
banker
банкир
bank officer
банковский служащий
balance
баланс
ATM
банкомат
solvency
платежеспособность
to go bankrupt
обанкротиться
dividend
дивиденд
interest
процент
cash
наличные
scholarship
стипендия
duty
обязанность
commission
комиссия
penalty
штраф
to transfer
переводить
current account
текущий счет
deposit
депозит
loan
кредит
mortgage
ипотека
exchange rate
курс обмена валют
currency
валюта
receipt
чек
bill
счет
cheque
банковский чек
invoice
квитанция
tax rate
налоговая ставка
tax system
система налогообложения
progressive tax rate
прогрессивная шкала налогообложения
credit card
кредитная карта
stock market
рынок ценных бумаг
to invest
инвестировать
pledge
залог
guarantee
гарантия
to earn
зарабатывать
to pay off
выплачивать
payment
платеж
debt
долг
to borrow
занимать
to pay back
возвращать
Practise new vocabulary on Quizlet
Read the following article and practise new words and expressions
Day of reckoning for innumerate bankers
The late Eddie George (а former governor of the Bank of England) was very fond of а little joke that went as follows: 'There are two types of bankers: those that can count and those that can't.' Some­times jokes capture profound truths. In all the fuss about bank bonuses, we have heard about labour market 'realities' (from the bankers) and moral and political philosophy (from everybody else). We need to think more about simple arithmetic.

All business people know that you can carry on for а while if you make no profits, but that if you run out of cash, you are toast. Bankers, as pro­viders of cash to others, understand this well. They just do not believe it applies to their own business.

In general, banks have no mea­sures of cash flow that work for banking. They do think about liquid­ity – can you borrow from other market participants, can you get money from the central bank? Being turned down in the market means curtains - it happened to Northern Rock in 2007 and Midland Bank а quarter of a century before, and forced its sale to HSBC.

That means banks are not con­scious of making cash decisions of the sort that other businesses face daily. But, of course, they frequently make decisions with cash conse­quences, and in the mid-noughties, they began to splash out. The recipi­ents were employees, in the form of bonuses, and, to а lesser but still significant extent, shareholders, in the form of dividends.

The existence of bonuses reflected the nature of financial businesses, where labour always represented a major cost, while revenues were unpredictable. It therefore became essential to make labour costs vari­able, as banks couldn't always guarantee high profits, and bonuses were the mechanism used to do this.

People in the City have always been paid well relative to others, but mega bonuses are quite new. From my own experience, in the mid­-nineties, no more than four or five employees of Barclays' then invest­ment bank were paid more than £1m, and no one got near £2m. Around the turn of the millennium, things began to take off and accelerated rapidly – after а pause in 2001-03 - so that exceptionally high remuneration was paid out between 2004 and 2007.

Observers of financial services saw unbelievable prosperity and apparently immense value added. Yet two years later, the whole indus­try was bankrupt. А simple reason underlies this: any industry that pays out in cash colossal accounting profits that are largely imaginary will go bust quickly. Not only has the industry – and by extension societies that depend on it – been spending money that is no longer there, it has been giving away money that it only imagined it had in the first place. Worse, it seems to want to do it all again.

How could they pау this imaginary wealth out in cash to their employ­ees? Because they had no measure of cash flow to tell them they were idiots, and because everyone else was doing it. Paying out 50 per cent of revenues to staff had become the rule, even when the 'revenues' did not actually consist of money.

How did the shareholders let them get away with this? They were sitting on the gravy train too, enjoying the views from the observation car. How did the directors let it happen? Innumeracy and inability to understand accounts. How depress­ing the shame and folly of it all is, when one considers that the system was brought down not because risk management was deficient (though it was), nor because greed was rampant (though it was), but because bankers could not count.

Practise new vocabulary from the article on Quizlet
Answer the questions to the article
Match the words to their definitions
Listen to an audio interview
Fill in the blanks after listening to the interview
Answer the questions to the audio
Your homework is to write the summary of this topic, minimum 15 sentences, using new words and expressions
Translate the following sentences into English,
the first set is mandatory
The second set
The third set
Translate the following sentences into English,
the first set is mandatory
The second set
The third set
Compare your answers to the keys
Questions to the article
1.Those that can count and those that can`t.

2.False

3.Midland bank

4.False

5.Bonuses

6.More than 1 million pounds

7.True

8.50 per cent

9.They were also sitting on a gravy train.

10.True

Questions to the audio
1. False.

2. 6.

3.False

4. To fire people.

5. True

Audio tapescript
I Do you think you could describe what you do in 10 words?
F I evaluate investment proposals and assess their management teams.
I And how do you think your personal assistant would describe you?
F Determined, a bit insensitive .. . but with a sense of humour.
I Did you ever predict you would end up where you are today?
F No. I've ended up a great deal richer than I ever imagined. When I was a
young lad, I had no idea what I wanted to do and someone advised me to
go into private equity. Things just took off from there, really.
I Ah! I'd like to know who has been your biggest influence.
F My grandfather, without a doubt. He built himself up out of nothing.
I And can you tell me, what's the worst job you've ever done?
F Working in a motorway service station.
I Would you mind telling me what's the worst thing you've ever had to do
at work?
F Fire people. I hate doing it, but sometimes it's a necessary evil.
I And, um, I was wondering if you had any guilty pleasures.
F Guilty pleasures? Oh, lots -no, no, I'm only joking. Um, it would have to
be .. . taking it easy – I don't do it very often and then I feel guilty.
I And what would you say was your number-one rule?
F Be open and honest. It works in the long term.
I Right. And I have to ask you: have you ever lied at work?
F Eh .. . no. My wife tells me I'm a very bad liar!
I Ah! And have you ever praised someone and not meant it?
F No. Though a woman once threw a cup of coffee at me during her
investment proposal, so she probably wished I had.
I Oh. Um, so how important is money to you?
F Less than family, but more than sport.
Right, and if you hadn't gone into finance, have you any idea what you
would have done?
F I'd have been a dentist.
I Oh! And finally, I'd like to ask how you'd like to be remembered.
F As a loving husband and father who lived life to the full.

The first set
1. I decided to make a deposit with this bank.

2. Less interest is charged on a mortgage than on a loan.

3. Where is the most favourable exchange rate?

4. The receipt I received contained some unknown currency.

5. I got another electricity bill.

6. Can I pay back my debt with a cheque?

7. On the invoice, I saw an impressive fine sum.

8. What tax systems do you know?

9. The tax rate in this country is 13%.
The second set
10. The UK has a progressive tax rate.

11. I do not pay in cash, only by credit card.

12. I invested in stock market and made an extra pay for the insurance to receive additional guarantees.

13. I need to earn money to buy out the apartment out of the pledge.

14. I borrowed money from a banker to buy a product at prime cost.

15. Financing for my project was delayed, so there was a loss profit.

16. The profitability of this idea is poor.

17. The sponsor has assessed the value of the transaction and has signed the contract.

18. Karl changed money to pay compensation.
The third set
19. What is your annual turnover?

20. All I've heard about the rouble lately is inflation and devaluation.

21. The bank officer showed me my balance and dividends on the ATM screen.

22. The solvency of a businessman fell so much that he went bankrupt.

23. It is the duty of the university to pay the scholarship.

24. The bank took a huge commission for the transfer.

25. The tax police charged a penalty for non-payment.

26. Do you know where is it possible to withdraw money here?

27. Transfer money to my current account.

Made on
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