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TEMA II: FINANCIAL INSTITUTIONS AND MONETARY POLICY

(UNITILE 3, 4, 5)
Durata (n ore de pregtire) 3,5
Total, din care:
- instruire teoretic 2 ore
- instruire practic 1 or 30 minute
Obiectiv general: nsuirea vocabularului specific domeniului financiar-bancar n limba
englez.
COMPETENE
SPECIFICE

CONINUT
TEMATIC

METODE/
FORME DE
ACTIVITATE

1
S asimileze
vocabular,
structuri
lingvistice
specifice i
informaii despre
domeniul
financiar-bancar.

2
Vocabular
specific
domeniilor
financiar i
bancar:
instituii
financiare,
politic
monetar.
Timpurile
modului
indicativ (2):
dificulti i
particulariti.
Numeralul n
limba
englez.

3
Metoda
comunicativ:
Prezentare
interactiv
Conversaie
euristic
Exerciii
individuale/ n
grupuri mici (46 studeni)
Jocuri de rol

S fie capabili s
descrie i s
analizeze n mod
fluent, n limba
englez, n scris
i oral, grafice i
tabele.

MIJLOACE DE
INSTRUIRE,
MATERIALE DE
NVARE
4
- videoproiector
- laptop
- CD player
- CD-uri i DVDuri

CRITERII DE
EVALUARE
5
Capacitatea de a
utiliza vocabular i
structuri specifice .
n limba englez,
despre domeniul
financiar-bancar.
Capacitatea de a
descrie i analiza n
mod fluent, n limba
englez, n scris i
oral, grafice i
tabele.

INDICAII BIBLIOGRAFICE SUPLIMENTARE:

Butzphal, Gerlinde, Maier-Fairclough, Jane. Career Express Business English 2.


Cornelsen Verlag. Berlin, 2010.
Capel, Will et al. Collins Business Vocabulary in Practice. (3rd ed.). Collins, 2012.
Emmerson, Paul. Business English Handbook. Advanced. Macmillan, 2007.
Emmerson, Paul. Business Vocabulary Builder. Macmillan, 2009.
Handford, Michael et.al. Business Advantage. Cambridge University Press, 2011.
*** Oxford Business Dictionary. Oxford University Press, 2008.
Walker, Caroline, Harvey, Paul. English for Business Studies in Higher Education.
Garnet Publishing, 2008.

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UNITATEA 3: FINANCIAL INSTITUTIONS


INFO CELL BANKING AND MONETARY POLICY
BANKING is the business of accepting deposits and lending money. It can be carried
out by some other financial intermediaries that perform the functions of securing
deposits and making loans.
A BANK is an organisation that offers a wide range of services to do with the handling
of money. They keep money on behalf of their customers, lend it to them, and offer them
various services.
A CENTRAL BANK in a country (i.e., The Bank of England The Bank of America, and
The National Bank of Romania) is the banker for the government, issuing money on its
behalf and setting the chief interest rate for loans; it is much involved in the countrys
monetary policy.

LEARNING OBJECTIVES
After reading this chapter you should:
know more about banking in your country and abroad
familiarize yourselves with different monetary policies
learn and practise your vocabulary and specific structures used in the language of
banking and finance
SECTION A INTRODUCTION
Pre-questions

a. Name at least three types of financial institutions that you know of and speak about
their role in a countrys economy
b. What services do banks usually provide for customers?
c. How has the Romanian banking system changed in the last 4-5 years?
d. What do you understand by the monetary policy of a country/government? Give
examples.

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1. Read the text to check some of your answers from the previous activity and then
state if the following are true or false.
a. Banks, building societies, insurance companies, pension funds and the stock exchange
are all financial bodies.
b. Banks can lend money to people, companies and sometimes governments.
c. The four big banks of Great Britain are Lloyds, Barclays, National Westminster and
The Royal Bank of Scotland.
d. Building societies usually lend money to persons and firms to help them buy houses
and flats.
e. A lot of money accumulates in the pension funds, as well as in insurance funds.
f. Through the stock exchange people buy shares from companies and receive dividends
out of the profits.

There are many sorts of financial bodies, doing different things, including, for
instance, banks, building societies, insurance companies, pension funds and the
stock-exchange. These all have roles in the working of the economy.
Banks started by being places where people could deposit money for safety. As not
everyone wants to take their money out at the same time, banks can safely, provided they
keep some in hand, lend much of it out to businesses, to ordinary people and sometimes
to governments. Banks also help people to transfer money: by cheque instead of using
cash to pay bills. A more recent development is the issuing of cards which can be used to
obtain cash or pay bills without cheques. Soon, we may be able to get along with using
hardly any visible money at all.
At first, there were a lot of local banks, one or two in each country or county
town. Now they have been joined into four big banks (Lloyds, Barclays, National
Westminster and Midland) that cover the whole country, with some smaller ones (for
example, Royal Bank of Scotland, TSB and Coop).
There are also special banks, mainly in the City of London. The most important
are the merchant banks, which have a wide range of activities. Their main function is to
give advice to firms, especially about buying up other firms, when there are often
financial battles between companies. They also do a variety of other jobs for their

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customers, like moving money abroad or helping them borrow, by selling large issues of
shares. There are also about 500 foreign banks represented in London, providing banking
services in many parts of the world and engaging in the financing of trade.
Building societies began like savings clubs, where people saved up until they had
enough to pay a deposit on a house (say 10 per cent of the cost); then the building society
would lend them the balance out of the money other members were saving up. There is
still some of that spirit, but the societies have grown and become more like banks. But
they still lend only to persons, not firms, and mostly lend only to help people buy houses
and flats (though that is changing). Until recently, they have not gone in for money
transmission, but that too is changing.
Pension funds provide income to live on after retirement. Generally, people have
to contribute to them while they are still working. There is a compulsory government
scheme under which contributions are paid to the government for a state pension. But
often the firm people work for has its own pension scheme, and employees can use thateither instead of the state scheme or as well. The largest of these private schemes are
those of the big public utilities (railways, post office, coal mines), but there are also
numerous private firms with schemes. There is also the possibility of taking out a
personal pension plan, the contributions to which are allowed against income tax.
Since people contribute all their working lives, and only draw out at the end, a lot
of money accumulates in these funds. Until it is needed, it can be lent out; this produces
an income, which increases the pensions at the end of the day. Usually, pension fund
managers lend money by buying shares in companies. Together with insurance
companies, pension funds now own well over half of British industry. In addition,
pension funds have bought land and offices, which are then rented out to produce income
for funds.
Insurance companies provide insurance for houses against fire or burglary; or cars
against accidents; or people against getting ill or dying. The companies provide a contract
undertaking to pay compensation for loss or damage, injury or death in return for a
payment in advance made regularly. The premiums are based on the principle of pooling
the risks, which means that the burden of the contributions to those contributing is less
onerous than the loss which is insured would be to the individual, so each gets something

26

from it. The net result is that the individual contributes regularly, but claims something
back only occasionally, if ever. Hence, here too a lot of money accumulates. As with
pension funds, this is used to buy long-term assets, such as company securities and
governments bonds. Some of the insurance companies are now very large.
The stock exchange is an institution which makes lending to companies easier.
One way to lend money is for an individual to lend it to someone known to him or her.
But such loans or debts are not transferable. Another way is for a company to issue shares
or loans which individuals may buy. The stock exchange provide a way of making such
shares or loans easily saleable, so that a promise to pay can be turned into cash.
One example of loans to the government, which issues promises to pay back the
total eventually, and to pay interest each year meanwhile. These promises are in units of a
convenient size, say 5 or 50 or 100, and all are the same, so that everyone knows
what they are when they buy or sell them. Also everyone knows that (in this respect at
least) most governments in normal times can be trusted to do what they promise to do.
The result is that the units are readily saleable. Such government stocks are traded on
the stock exchange. Prices go up and down according to the state of the market, but in
general all are tradeable on any day at a price anyone can find out.
Businesses can borrow in the same way through fixed-interest loans, usually
called debentures. Another way is not to have the same fixed interest every year
promised in advance, but a return that varies according to how much profit the firm
makes. The individual buys in effect a part of a company (a share), and receives a
payment out of the profits, called a dividend. These shares can also be bought and sold
on the stock exchange. How easy they are to sell depends on how well known the firm is.
(Many of these shares are bought up by pension funds and insurance companies since
they have so much money to invest.)

2. Make a summary of the text in no more than 150 words.

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SECTION B

3. The paragraphs of the following text have been mixed up. Put them in the right
order and then find a title for the whole text.

Paragraph 1
As time went on, the Bank of England came to be the place where the ordinary
banks kept their reserves, or from whom they could borrow reserves if they ran short. To
be able to provide the banks with reserves when needed, the bank kept a central reserve
of gold. When this central reserve was drawn on heavily, the Bank raised the rate of
interest it charged the other banks when they borrowed. This discouraged them from
borrowing too much, and drew in gold from abroad, thus protecting its own reserve of
gold. The other banks took to charging their own customers the same rate of interest plus
a margin, and varying their own rate with the banks rate (which came to be called Bank
Rate). The bank thus became the body that fixed interest rates- at least short-term rates,
up to six months or a year- inside the country. This had an influence on how much the
ordinary banks lent.
Paragraph 2
The Bank of England is one of the oldest central banks, and what it now does
grew out of its history. It was founded in 1694 to lend money to the new Dutch King
William, who needed money to fight a war. It was in effect a group of bankers who felt
more certain of getting their money back if they lent as a group. This illustrates the fact
that a king or government often needs the support of City bankers, and is to some extent
dependent on their goodwill and good opinion. To have an official outpost in the City can
therefore be useful to the government.
Paragraph 3
Originally the local banks each issued their banknotes. That probably made the
banking system more risky, and one of the things the Bank of England did was to keep an
eye on how well the local banks managed, principally by making sure the loans they
made were to reputable borrowers. Nowadays the Bank of England has the sole right to
issue notes in England and Wales; The Scottish and Northern Ireland banks have limited
rights. However, most money nowadays consists of bank deposits, and the banks are very
much in the business of accepting deposits and making loans out of them, so they have
lost nothing important.

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4. In groups, draw a comparison between The Bank of England and Banca


Naional a Romniei (The National Bank of Romania) in terms of:
-

bank reserves

rate of interest

banknotes

5. Match the term/phrase (1 20) with the right definition (a t):


1. balance

a.
a record of transactions in a
bank account
2. bank charges
b.
a sum deducted from a bank
account, as for a cheque
3. branch
c.
an instruction to a bank to
make regular payments
4. check(AmE)/ cheque (BrE)
d.
bank account from which
money may be drawn at any time;
5. checkbook (AmE)/ chequebook e.
bank account on which
(BrE)
interest is paid;
6. credit
f.
book containing detachable
checks
7. credit card
g.
(plastic) card from a bank
authorising the purchasing of goods on
credit
8. current
account/
checking h.
deficit in a bank account
account (Am E)
caused by withdrawing more money
than is paid in
9. debit
i.
local office or bureau of a
bank
10. deposit
account/
savings j.
money in a bank account;
account (Am E)
sum added to a bank account; money
lent by a bank
11. fill in (Br E)/ to fill out(Am E)
k.
money lent by a bank etc and
that must be repaid with interest
12. interest
l.
money paid for the use of
money lent
13. loan
m.
money paid to a bank for the
banks services etc
14. overdraft
n.
person to whom money is
paid
15. pay in [paid, paid]
o.
small document recording
money that you pay in to a bank account
16. payee
p.
the
difference
between

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17. paying-in slip


18. standing order
19. statement
20. withdraw [-drew, -drawn]

credits and debits in an account


q.
to add written information to
a document to make it complete;
r.
to deposit or put money in to
a bank account
s.
to take money out of a bank
account
t.
written order to a bank to
pay the stated sum from ones account

And now write a paragraph about a banking service or product using ten of the
terms above.
6. Read the following text and fill in the blanks with terms from the box:
checks/cheques; commercial; credit cards; financial institutions; investment;
loans; policy; rate of interest; savings; securities

Traditionally, the principal types of banking are ________(1) and central. In commercial
banking, business involves borrowing money from individuals, firms and sometimes even
governments. The banks use this money to make _______ (2), extend credit and invest in
_______(3). They earn money by borrowing at one _______(4) and lending at a higher
rate, and by charging commissions and fees for their services. These services include
______(5), ______(6), loans, personal wealth management, estate planning, etc. Anyone
who would want to start a business could apply. Central banks, on the other hand, provide
services for governments, commercial banks and other ________ (7). Usually they must
cooperate closely with national governments and often they lead or regulate the national
banking system by formulating banking _______(8). In addition to such traditional banks
there are other institutions, such as finance companies, _______(9) banks, _______(10)
banks, etc. These are often also called banks, but they usually cannot provide all the
services of commercial banks.
The banking systems in different countries have many similarities, but also differences.
The main differences seem to be in organizational details (e.g. unit banking vs. branch
banking) as well as some banking techniques, although they are becoming less noticeable

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as international communication improves. Domestic or local banks are now more likely
to copy practices that have proven successful in other countries. In addition there seems
to be a trend toward banks merging with or buying out other banks, often forming large,
international banking institutions.
Other modern developments of course involve technology, e.g. e-commerce and Internetbased banking. Some banks are no longer focusing on local branches. They feel that there
will be less personal contact with customers in the future since most banking will be done
online, via the telephone or at ATM machines. Therefore they are closing branches and
reducing the number of employees involved in direct customer service. It will be
interesting to see how such developments influence the industry in general.
7. COMPREHENSION CHECK: Answer the questions on the text above:
1. What is the role of the government in both central and commercial banking?
2. What is the main business of commercial banking?
3. How does a commercial bank succeed in earning money?
4. What is the difference between traditional banks and the other financial
institutions?
5. Are the banking systems similar everywhere in the world? Support your answer
with arguments.
6. What is the nowadays trend in banking? Mention some developments in banking.
7. How does technology affect local branches of international banks and their
employees?

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8. Read the following article adapted from The Economist and then write a
memorandum announcing the appointment of Mr Gavin Governor as Governor of
The Bank of England.

GOVERNOR TO BE NEXT BANK OF ENGLAND GOVERNOR


The contest for the governorship of the Bank of England ended on Wednesday with the
appointment of Gavin Governor, Deputy Governor for monetary policy, to replace Sir
Edward King, who retires in seven months time.
The announcement came as Gordon Lord, the chancellor, sought to reassure financial markets
that a sharp increase in government borrowing would not be accompanied by any relaxation
in the Banks efforts to control inflation.
Mr Governor, 54, an economist who joined the Bank in 1991, was the candidate favoured by
the City and is respected among central bankers and economists internationally for his
academic work. He helped in the setting up the Banks inflation targeting regime and, with
Sir Edward, in arguing the case for monetary independence. Mr Governor also established the
Banks quarterly inflation reports, which analyse its price projections.
Mr Governor is regarded as more of a Eurosceptic than the other leading candidates for the
job, Sir Howard Duke and Andrew Baron. Michael Squire, economist at Citigroup, said the
selection of Mr Governor ensures that the central bank will be able to face the upcoming
policy challenges with an experienced head.

9. LOOK IT UP!
1. What is the City? Do you know other terms to denote it?
2. What is the role of a central bank? Could you mention the most important
departments within a central bank?
3. Do you know the term denoting a central bank used in the United States?
4. Give examples of well-known financial centres.

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10. Study the

ORGANIZATIONAL CHART

of the Industrial and Commercial Bank of

Cumbria (ICBC):
PRESIDENT/CHAIRMAN
Board of Directors

CEO/ MANAGING DIRECTOR

Accounting and Settlement Department

Business Development and Strategy

Administration Dpt.

Information Technology Dpt. (IT)

Auditing and Supervisory Dpt.

Credit Card Management Dpt.

Corporate Banking Dpt.

E-banking Dpt.

Credit Dpt.

Housing Finance Dpt.

Private Banking Dpt.

Human Resources Dpt.

Treasury Dpt.

Legal Dpt.

11. Describe the activity of each department using the verbs/phrases listed below,
according to the model:
to apply, to appoint, to approve, to assist, to authorise, to be accountable for, to be
concerned with, to be in charge with, to calculate, to charge, to collect, to compile, to
consist of, to control, to credit, to deal with, to debit, to deposit, to evaluate, to finance, to
grant, to instruct, to issue, to record, to recruit, to remit, to report to, to submit, to
supervise, to transfer
Model: The Board of Directors is responsible for making policy decisions and
determining the bank strategy. It appoints a CEO/Managing Director who reports
directly to the Board. It usually consists of the President/Chairman, the Directors and
the Heads of Departments.

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12. Fill in the blanks with the correct preposition:


1. I hope that you agree . us this matter.
2. The board arrived the meeting time.
3. A Japanese reporter has been asking you all morning, Sir!
4. Most employees believe the success of their strike.
5. Do you think you can borrow so much money the bank?
6. Could you change a 100-euro note . 5-euro notes?
7. The reputed politician did not want to comment the newspapers headlines about
his latest escapades.
8. I wonder how the new management team will cope . the recent complaints
Union members.
9. Ive read your report but I havent really figured out what it deals .
10. Seemingly, our economic development depends financial aid from the EU.

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UNITATEA 4: MONETARY POLICY


INFO CELL MONETARY POLICY
The MONETARY POLICY is the central government policy with respect to the
quantity of money in the economy, the rate of interest and the exchange rate.
Fill in the following article with a word or group of words extracted from the box
below:
fell sharply against
the euro

inject liquidity into foreign assets


the financial
system

short term interest


rates

monetary and
fiscal

bond issues

economic recovery

exchange rate

The Yen
A weakening dollar is perhaps the last thing that the Bank of Japan wants. With domestic
demand anaemic, Japan perennially relies on exports and overseas production, especially
of cars and electronics, to keep its economy going. So, throughout May 2003, even as the
yen (1)___________, the central bank was intervening furiously to keep it from rising too
far against the dollar.
Since May 15th, when the yen closed at 116, having hit a 27-month high, the pressure has
eased. By June, it was back to 119, near the 120 with which the Bank of Japan seems
comfortable. In trade-weighted terms, thanks to the strengthening of the euro, the yen is
now weaker than it was when the Iraq war ended in April. Even so, the Japanese prime
minister said at the G8 summit in Evian that the yen was still too strong against the
dollar.
The Bank of Japan may have helped Japans carmakers, but it is offering little solace to
the rest of the economy. With (2)__________ at zero, the central bank has relied on nontraditional measures to (3)__________. For example, it has boosted banks current
account balances with the central bank. Since March 2003, the Bank of Japan has raised
its ceiling for these balances by 50%, to 30 trillion yens ($250 billion).
The Bank of Japan also continues to buy new government (4)__________at a rate of 1.2
trillion yens per month. This has helped drive the yield on ten-year bonds down by fourtenths of a percentage point since the start of the year, to below 0.5%. But the central

35

bank is more aggressive-by, say, buying some of the outstanding stocks of bonds, rather
than just a portion of new issues, or by buying (5)__________.
If the Bank of Japan is to conquer deflation, it will have to do more. However, this does
not really seem to be the central banks goal. Its main concern is to avoid being blamed
for any large-scale financial collapse. So its officials step in from time to time to reassure
markets, but do little more. Recently, its officials have been considering a plan to buy
asset-backed securities in an effort to prop up ailing small firms.
The Bank of Japan is not short of helpful advice from visitors to Tokyo. Some said that
(6)__________ manipulation was unlikely to do much good, and advised the Japanese to
set an inflation target. Others also suggested ways in which the central bank could
promote inflation and ease worries about the balance sheet. They also stressed the
importance of using (7)__________ policy in concert.
Japans central bankers have heard such arguments before, and ignored them. That may
be one reason why the American specialists pointed not only to Japans structural
monetary and fiscal problems, but also to its frustratingly slow pace of change. From my
side of the ocean one of the analysts said, it seems that many people are looking to the
United States to take the responsibility for leading the world into (8)__________.

2.
Read the text again to state which of the following are true and which are
false:
a.

Lately, Japan has been relying essentially on domestic demand. (F)

b.

The yen is now weaker, just because of the euro financial evolution

c.
The aggressiveness of the central bank is manifested only by buying some of the
outstanding stocks of bonds.
d.
Some foreign advisors stated that the Bank of Japan should use monetary and
fiscal policy in concert.
3.
In groups, discuss the following issues, considering the financial realities of
your country in comparison with those stated above about the Bank of Japan.
a.
The role of the exchange rate manipulation in the financial/monetary policy of
Romania
b. What strategies would you suggest for the Romanian economic recovery?

36

UNITATEA 5: THE INDICATIVE MOOD 2. NUMERALS. PRACTICE


1. In pairs, find the questions for the following answers:
a. The last time I went to a bank was last week.
b. I wanted to open an account.
c. It was a current account.
d. Yes, I asked about that possibility, but I hope Ill never overdraw.
e. Well, they also offered to open a deposit account for me, to issue a banking card on
my name, to transfer money from my account to wherever I wanted to, to exchange
whatever currency I needed, to lend money to me and many others.
2. Go through the text again and underline all the verbs in the Past Tense Simple.
Then fill in the table below with all three basic forms of those verbs. An example has
been written for you.
Basic forms of verbs extracted from the text
Short Infinitive
Ex. grow

Past Tense
grew

Past Participle
grown

37

Write an article for the local paper, in which to describe the services Romanian
banks used to offer a couple of years ago in comparison with what they offer now.

3. In the following sentences the numerals have been mixed up. Find their right
place and then translate the sentences into Romanian.
a. After 2-nd years of courtship and then rejection by a string of suitors, the American
Stock Exchange (Amex) has finally found a mate.
b. On June 110, GTCR Golder Rauner, a Chicago investment firm, agreed to buy the
Amex for $ 2m from the NASD1.

4. Here are some phrases using numbers in payments. Match the phrases on the left
with the figures on the right.
1 We speak of a gross profit of 16%

a. nine five seven stroke twenty four M.

2. The interest charges will be of $ 5.40

b. the seventeenth of August nineteen


ninety seven

3. You will get an annual interest rate of c. sixteen per cent


1

NASD= The National Association of the Securities Dealers

38

2.7%
4. Check the invoice No. 957/24M

d. five point forty

5. It was on the 17th of August 1997

e. two point seven per cent

6. The profit is 2, 312, 000

f. two million three hundred and twelve


thousand pounds

5. Project work
You want to start a business and you need a loan from the bank. In pairs, work on
your file for the bank. You will have to include the following items:
a. feasibility plan, containing information about
-

business aim

business field/profile

products/services

partners (if any)

location

foreseen profits

b. guarantees- stable job or/and properties, real estate, endorsers.


c. references

INFO CELL THE FEDERAL RESERVE


In the 1913 United States of America, the Federal Reserve System, which serves as the
nation's central bank, was created by an act of Congress. The System consists of a seven
member Board of Governors with headquarters in Washington, D.C., and twelve
Reserve Banks located in major cities throughout the United States.
Responsibilities: The primary responsibility is the formulation of monetary policy,
affecting the cost and availability of money and credit in the economy. The Board of
Governors sets reserve requirements and shares the responsibility with the Reserve
Banks for discount rate policy.
In addition to monetary policy responsibilities, the Federal Reserve Board has regulatory
and supervisory responsibilities over banks that are members of the System, bank
holding companies, international banking facilities in the United States, foreign

39

activities of member banks, and the U.S. activities of foreign-owned banks. It plays a key
role in assuring the smooth functioning and continued development of the nation's vast
payments system.
Governors also discuss the international monetary system with central bankers of
other countries and are in close contact with the heads of the U.S. agencies that make
foreign loans and conduct foreign financial transactions.
6. Complete the table below using previous information on central and domestic
banks:
CENTRAL BANK

DOMESTIC BANK

RESPONSIBILITIES

SERVICES/
OPERATIONS
CLIENTS/
PARTNERS

INFO CELL E BANKING


On-line banking is a service provided by many banks and credit unions that allows you to
conduct banking transactions over the Internet using a PC, mobile phone. You may be
able to:

Access account history


Access accounts 24/7
Apply for mortgage or personal loans electronically
Live chat with customer support
Receive and pay bills on-line
Schedule on-line standing orders
Track real time stock quotes
Trade stocks and mutual funds
Transfer funds between accounts
View account balance

40

7. Read the following article and underline the terms and phrases referring to
banking:
THE ORIGINS OF ELECTRONIC BANKING

The advent of the Internet and the popularity of PCs presented both an opportunity and a
challenge for the banking industry. For years, financial institutions have used powerful
computer networks to automate millions of daily transactions; today, often the only paper
record is the customers receipt at the point of sale. Now that its customers are connected
to the Internet via PCs, banks envision similar economic advantages by adapting these
same internal electronic processes to home use. Banks view on-line banking as a
powerful value-added tool to attract and retain new customers while helping to
eliminate costly paper handling and teller transactions in an increasingly competitive
banking environment.
Mouse clicks are replacing face-to-face transactions. Web pages can look just as good
and work as well for a small community credit union as they do for some of the worlds
largest financial institutions. Some experts believe newcomers including small, virtual
banks will lead the way with new and innovative banking styles. In fact, smaller
institutions have several advantages in the on-line banking arena due to their lower
infrastructure costs. Because they are not spending as much on housing for existing
product delivery, they can offer customers better deals like: free checking and savings
accounts with higher interest rates.
Internet users seek for convenience when they go on-line to find varied information
ranging from political news to holiday gifts. 32 per cent of Internet users have now done
their banking online and 15 per cent have made a travel purchase on-line. It is likely that
convenience is not the only factor driving the popularity of e-banking. Some customers
are using the Internet to save money. One on-line bank, NetBank, now charges $3 for
each paper statement and many companies are strongly encouraging their customers to
accept electronic billing. Some corporations reward on-line consumers with special
discounts and enjoy the benefits of increased traffic to their web sites. In both cases, the

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industry is educating consumers about Internet transactions by making them pay for offline equivalents for the same banking services.
Success means dealing with old issues in new ways and creating solutions that connect
tradition to innovation.
8. COMPREHENSION CHECK:
1. What was the reason for the spread of on-line banking?
2. Why is on-line banking important for banks?
3. What costs are eliminated in e-banking transactions?
4. Who are the newcomers in the banking industry? What advantages do they have?
5. What are the factors that add to the popularity of e-banking?

9. Translate into Romanian, choosing the appropriate version:


1. On December 9th, the airline said that actually it had debts of $875m that were due at
the end of the year.
a. Compania aerian a anunat pe 9 decembrie ca are de fapt datorii de 875 milioane
de dolari, scadente le sfritul anului.
b. Pe 9 decembrie, liniile aeriene au spus c n prezent aveau datorii de 875 milioane
de dolari din cauza sfritului de an.
c. Pe 9 decembrie, compania aerian a spus c la acel moment avea datorii de 875
milioane care erau datorate la sfritul anului.

2. Last year, the company lost a record of $2.1 billion; this year it is to lose even more.
a. Anul trecut compania a pierdut o nregistrare de 2.1 milioane de dolari, anul
acesta va pierde mai mult.
b. Anul trecut compania a nregistrat pierderi record n valoare de 2,1 miliarde de
dolari, iar anul acesta, cu siguran va pierde mai mult.

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c. Compania a pierdut anul recut recordul de 2.1 milioane de dolari iar anul acesta
va pierde mai mult.

3. The directors had already spoken to banks about borrowing money should the airline
enter chapter 11 bankruptcy law.
a. Directorii au vorbit deja cun bnci despre mprumutul de bani dac va intra
compania aerian n capitolul 11 al legii falimentului.
b. Directorii discutasera deja cu unele bnci despre un potenial mprumut n cazul n
care compania aerian ar intra sub incidena capitolului al 11-lea din legea
falimentului.
c. Directorii discutaser deja cu unele bnci despre un mprumut dac cumva
compania aerian va intra sub incidena capitolului al 11-lea din legea
falimentului.
10. Match the phrases (1 10) to the appropriate explanations (a j):
1. cost

a. A bank that provides


transactions via the Internet.

most

consumer

2. customer service

b. A bank with branches, tellers and ATMs. Many


traditional banks now offer online banking and
online bill payment services.

3. fund business

c. A monthly charge for online bill payment


services. Many banks offer this as a free service
to account holders.

4. online share dealing

d. An individual client can submit the application


for pledge loan and obtain the result of the
application online.

5. personal pledge loan

e. An Internet and telephone share dealing service


where customers buy and sell shares.

6. traditional (brick-andmortar) bank

f. Clients (fund investors) can perform fund


subscription, purchase and redemption as well
as inquiry of funds-related information online.

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7. treasury bond business

g. Clients of personal treasury bond investment


can trade treasury bond online in real time.

8. virtual (internet) bank

h. The customer can change his logon password,


card or customer information on-line.

9. WAP Mobile Phone


Banking

i. This is the on line banking service for the


customers provided through mobile phones.

10. Web Site Address


Hotlink

j. Users click on it to go to the bank's home page


on the Internet.

11. CASE STUDY: Look at the table below to choose the appropriate bank for the
following four people. Explain your choice:
Sarah Johnson, married and mother of 2 children, owns a small business. She has to pay
an important number of bills every month both for her household and business. Time is
essential for her. She intends to open an account with a bank.
William Windows, single, is a salesperson for a big software distribution company. He
travels extensively and wants an account that could take over the job of paying bills. He
is a cell phone and laptop addict. He needs unlimited access to his account and the
possibility to withdraw money from any location.
Oscar Rottenn, retired, has a bad health condition that prevents him from leaving his
house for a long period of time. He wants to put some money away. Despite his age, he is
very open-minded.
Sonny Hearst Jr., 21, is a student and a part-time waiter at the campus cafeteria. He
wants to open an account with a bank to receive his paycheck and to pay his tuition
directly from this account.

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Brick-and-Mortar Banks
Institution

Bank

Bank of
America

Interest-Bearing Accounts
Minimum
Deposit /
Interest
Rate
$100 /
0.40%

Chase
$100 /
Manhattan
1.00%
Bank
U.S. Bank

$1,000 /
1.26%

Monthly Fee

ATM
Fees

Online Bill Payment

Credits
for Other
Banks'
ATM
Fees

Cost / Number of Monthly


Payments

$10.00

No credits $5.95 / Unlimited payments

$5.95

No credits Free / Unlimited payments

$3.50

No credits $5.95 / 15 payments

Virtual Banks

American
Express

$100 /
1.98%

$8.00

4 per
month
($1.50
Free / Unlimited payments
maximum
each)

nBank

$100 /
5.32%

$15.00

Up to $6
$4.50 / 5 payments
per month

0-$4.40

No credits Free / Unlimited payments

$50 /
NetB@ank 3.00%3.93%*

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