Text 3 Warm-up

1. Translate the following word combinations: mode of working, to put into effect, overall policy, day-to-day running of the bank, to make a profit, principal purposes, national currency, foreign currency, law regulations, to pass a law.

2. Try to define the structure of Ukrainian banking system.

Vocabulary

shareholder – акціонер; акционер

Chairman – голова; председатель

Board of Directors – рада директорів; совет директоров

Annual General Meeting – щорічні загальні збори; ежегодное всеобщее собрание

current account – поточний рахунок; текущий счет

deposit account – депозитний рахунок; депозитный счет

joint stock – акціонерний; акционерный

standing order – постійне доручення клієнта банку; постоянное поручение клиента банка

savings account – ощадний рахунок; сберегательный счет

activities – діяльність; деятельность

net amount – чиста сума; чистая сумма

legal entity –юридична особа; юридическое лицо

charter – статут, хартія, чартер; устав, хартия, чартер

entitlement to effect banking operations – право на ведення, здійсненя банківських операцій; право на ведение, осуществление банковских операций

Bank Structure

Commercial banks have branches in all major towns and a similar structure and mode of working common to them all.

The essence of a bank’s activities is the collection of deposits through current accounts and deposit accounts and the use of these funds to provide loans or funds for investment. The current account is the one commonly held and drawn upon by cheques and standing orders. The deposit account is more in the nature of a savings account. The pattern of investments which a bank decides upon is crucial because, on the one hand, the bank must use the funds wisely to make a profit and, on the other, funds must be available for depositors to withdraw when they wish to do so.

The owners are the shareholders. At the outset they provide the necessary capital. They are organized on the joint stock principle and are registered public companies. The Board of Directors and the Chairman are elected by ordinary shareholders at the Annual General Meeting and are responsible for the efficient management of the bank. The Board is concerned with the overall policy of the bank and the major decisions which put that policy into effect. The Board appoint a Managing Director who is directly responsible to them and a member of the Board. They also appoint senior executives who in turn appoint the rest of the clerical staff who are responsible, in different capacities, for the day-to-day running of the bank.

At the end of each business year the Board of Directors recommend and the Annual General Meeting decides how much of the profit should be distributed to the shareholders as dividend, and how much should be retained in the business. In preparation for the Annual General Meeting, a bank publishes its Report and Accounts from which shareholders can easily determine the total profits the bank has earned and how much is available for distribution. The published accounts must be sent to every shareholder and are also available for anyone with an interest in the affairs of the bank.