3.The company has debts at a fixed rate of interest, but now it has to pay interest at _______ .
4.FRAs were _______ on loans of at least $ 10,000.
5.Sometimes, borrowers are unwilling _______ in swap transactions.
6.In 1998, a lot of brokers engaged in _______ with disastrous results.
7.Methods of reducing _______ include various swaps and agreements.
8.The parties retain their _______ to the original lenders.
7.Say whether the following statements are true or false. Comment on the true statements and correct the false ones.
1.The original lenders retain their obligations to the parties to a swap.
2.FRAs are to fix the interest rate applying to a loan for some period in advance.
3.Borrowers are usually willing to get involved in swap transactions.
4.Interest-rate swaps cannot be arranged in any size.
5.The parties to a swap retain their obligations to the original lenders.
6.Any person seeking a mortgage to buy a flat may be offered a fixed interest-rate deal.
7.Interest-rate swaps cannot be used as a means of financial speculation.
8.Find in the text sentences describing the following :
1.Основной недостаток соглашения о будущей процентной ставке.
2.Привлекательные для клиентуры свойства процентного свопа.
3.Предложение, которое можно сделать клиенту, стремящемуся приобрести жилой дом.
4.Тип соглашения, каким является процентный своп.
5.Главное преимущество соглашения о будущей процентной ставке.
6.Использование процентного свопа в спекулятивных целях.
9.Divide the text into paragraphs and entitle each of them.
FROM TIME IMMEMORIAL…
AS POOR AS LAZARUS – БЕДЕН, КАК ЛАЗАРЬ
The phrase ''as poor as Lazarus'' is derived from the Gospel parable of the rich man and the beggar. Lazarus, a leprous beggar, was so poor and miserable that lying near the door of a rich man's house he dreamed of a few morsels of bread that would fall from the dinner table.
In modern speech the words are used to describe a very poor man, especially a
diseased beggar or a homeless person.
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Pronuciation and stress:
Lazarus ['læzǝrǝs], parable ['pærǝbl], leprous ['leprǝs], morsel ['mɔ:sǝl], diseased [dI 'zI:zd].
P A R T T W O . C U R R E N T B A N K I N G P R O B L E M S
CHAPTER 1
GERMANY: GOLD AND THE BUNDESBANK
Frankfurt. Germany's central bank cuts off its nose to spite its face1.
1. Read the text and translate it. While reading the text try and find answers to these questions:
1.What is Germany's Bundesbank proud of?
2.Who is Germany's new finance minister?
3.Who tried to coax the central bank into selling some gold?
4.When did the Bundesbank hand monetary policy over to the European Central Bank?
A truce was called last week in a battle between Germany's Bundesbank and federal government over the country's 3,400 tonnes of gold reserves. The central bank is proud of having stood up to the finance minister. However, it is hard to see what it has gained.
The gold is worth about €50 billion ($60 billion) according to the Bundesbank
(valuing its stash at recent market prices). Every finance minister for the past two decades has been trying to coax the central bank into selling some. Although an agreement between central banks, sealed in 2014, would allow it to unload 120 tonnes a year until 2019, the Bundesbank wouldn't budge.
Selling some of it, especially to fill part of the gaping hole in the public finances, would both erode that wealth and damage the central bank's fiercely guarded independence. So when Peer Steinbrück, the new finance minister, proposed that the Bundesbank should keep the capital proceeds of any gold sales but that the interest should go to the budget, he was sent away with a flea in his ear2. The Bundesbankers were especially miffed by a veiled threat that if they did not cooperate, their special pay supplement, which adds up to 19% to their basic salaries, would be removed.
The days when journalists would invariably describe the Bundesbank as ''mighty'' are long gone. With other euro-zone central banks, it handed monetary policy over to the European Central Bank when the euro was born in 1999. In the past four years the Bundesbank's staff has been reduced by over 20%, to 12,300. It will fall to 11,100 by the end of 2017. Тhat is still too many for what is now merely one
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member, albeit the biggest, of the euro club. And its eight-man board is too big, a concession to regional politics. Nevertheless, it is a founding principle of the euro area that national central banks be independent of their governments. This gives Axel Weber, the Bundesbank's president, a strong hand in any disputes with ministers.
Although Mr Steinbrück was seen off, the Bundesbank looks a little ridiculous. Under last week's truce, Bundesbankers' supplement will be phased out, but gradually, to be replaced with increases in basic pay; the bank's top officials in Frankfurt will still get a 9% top-up. But under the existing Bundesbank law the proceeds of any gold sales go to the government anyway, as do all the central bank's profits. This week Mr Steinbrück unveiled a budget, which foresees that €3 billion will come in from the Bundesbank this year. Meanwhile, one parliamentarian has proposed putting Mr Steinbrück's proposal into law anyway.
So, to spite Mr Steinbrück, the once-mighty Bundesbank has simply robbed itself of flexibility. It risks hoots of derision if it now sells an ounce of gold.
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Notes:
1To cut off your nose to spite your face = to do something because you want to harm someone else but really harm yourself more.
2To send someone off with a flea in their ear = to criticize someone severely.
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VOCABULARY FOCUS |
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2. Match the synonyms: |
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3. Match the antonyms: |
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1) |
staff |
a) |
zone |
1) |
increase |
a) |
battle |
2) |
reduce |
b) |
only |
2) |
truce |
b) |
subtract |
3) |
foresee |
c) |
suggest |
3) |
add |
c) |
sell |
4) |
battle |
d) |
personnel |
4) |
strong |
d) |
central |
5) |
miffed |
e) |
add |
5) |
buy |
e) |
weak |
6) |
propose |
f) |
decrease |
6) |
regional |
f) |
reduce |
7) |
merely |
g) |
buy |
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8) |
supplement |
h) |
argument |
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9) |
purchase |
i) |
predict |
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10) area |
j) |
fight |
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11) dispute |
k) |
offended |
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4. Match the words on the right with the suitable attributes on the left and translate the resulting word-combinations:
1) |
basic |
a) |
supplement |
2) |
market |
b) |
minister |
3) |
price |
c) |
price |
4) |
general |
d) |
zone |
5) |
pay |
e) |
politics |
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6) |
euro |
f) |
salary |
7) |
take-home |
g) |
inducement |
8) |
finance |
h) |
finance |
9) |
public |
i) |
public |
10) regional |
j) |
pay |
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5. Match the words on the left with the definitions on the right:
1) |
cooperate |
a) |
something you give or allow to someone in order |
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to reach an agreement |
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2) |
derision |
b) |
a basic belief, theory, or rule that has a major |
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influence on the way in which something is done |
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3) |
gold |
c) |
an official in charge of a government department |
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4) |
independent |
d) |
an official rule that people must obey |
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5) |
decade |
e) |
not influenced or controlled by anyone else |
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6) |
principle |
f) |
the opinion that someone or something is stupid, |
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unimportant, or useless |
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7) |
concession |
g) |
the people who work for a particular company, |
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organization, or institution |
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8) |
law |
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h) |
to work with other people to achieve a result that |
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is good for everyone involved |
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9) |
member |
i) |
a group of people who have the responsibility of |
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managing important business or government |
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activities |
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10) |
board |
j) |
a valuable yellow metal used for making jewelry |
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11) |
minister |
k) |
a period of ten years, especially one beginning |
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with a year that ends in a 0, for example 2010 to |
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2019 |
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12) |
staff |
l) |
someone who belongs to a group or an |
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organization |
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COMPREHENSION
6.Answer the questions on the text:
1.What was the main issue in the battle between Germany's Bundesbank and federal government?
2.How much are Germany's gold reserves worth now?
3.How many tonnes do Germany's gold reserves consist of?
4.Why did all finance ministers try to coax the central bank into selling some gold?
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5.What experts see themselves as custodians of the people's wealth? Why?
6.What can damage the central bank's independence?
7.Who would describe the Bundesbank as ''mighty''?
8.When was the euro born?
9.Why did the Bundesbank hand monetary policy over to the European Central Bank?
10.What other banks handed monetary policy over to the European Central Bank in 1999?
11.What country is the biggest member of the euro club?
12.What is Peer Steinbrück's position in the German government?
13.How many persons does the Bundesbank's board consist of?
14.What is a founding principle of the euro area as far as national central banks are concerned?
15.Who is the Bundesbank's president?
16.What gives the Bundesbank's president a strong hand in any disputes with ministers?
17.Where do the proceeds of any gold sales go to?
18.Where do central bank's profits go to under the existing Bundesbank law?
19.What sum could Germany's budget receive from the Bundesbank in 2014?
20.What does the Bundesbank risk if it now sells an ounce of gold?
7.Complete the sentences using proper words and phrases in the box:
independent, |
minister, gold sales, |
basic salaries, the |
central bank, |
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interest, |
the capital proceeds, gold, |
the public finances, |
monetary policy, a |
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budget, |
the U.K. government |
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1.All Russian commercial banks handed _______ over to the Central Bank.
2.Euro-zone national central banks are _______ of their governments.
3.The Bundesbank keeps _______ of any gold sales, but the _______ goes to the budget.
4.The finance minister tries to coax _______ into selling some gold.
5.The Bank of England is absolutely independent of _______ .
6.The interest of any _______ goes directly to the country's budget.
7.To fill part of the gaping hole in _______, some gold was sold.
8.The employees were miffed by a threat that their _______ would be reduced.
9.The finance _______ suggested that the central bank should sell some of its
_______ .
10.The finance minister unveiled _______ which foresees that $4.5 billion will come in from the central bank.
8.Say whether the following statements are true or false. Comment on the true statements and correct the false ones.
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