to equal - равняться, быть равным
the firm didn't really want to саrry that gold around, so it asked the goldsmith If, instead of actually taking the gold, it could be given a deposit - фирма не хотела держать золото при себе (носить золото с собой) и вместо того, чтобы на самом деле его забрать, попросила мастера принять это золото на хранение в виде вклада
(they) were worth $110 - их стоимость составляла, они оценивались (имели ценность) в 110 долларов
to write (syn. to draw, to issue, to make out) a cheque - выписать чек
his assets failed - зд. его активы снизились
to fail - (о банках) обанкротиться
initial loan - первоначальная ссуда
reserves - резервы
the amount of gold that is immediately available in the vault - запасы (количество) золота, которое всегда находится (и может быть немедленно получено) в хранилище банка
depositors' demands - требования вкладчиков
leaving himself with $90 -оставив себе только 90 долларов
to rely on - рассчитывать, надеяться на что-либо
the reserve ratio • резервная норма
dare - осмеливаться
to make a profit through his interest charges - получить прибыль за счет платежа процентов
What are the risks involved? - Чем он рискует?
to panic (panicked) -пугать, приводить в панику
to doubt - сомневаться
he was bound to lose some of the gold - он непременно должен был потерять часть золота
a run on the bank - натиск вкладчиков на банк
the financial panic - финансовая паника
to fear - опасаться, страшиться
to go bankrupt - обанкротиться
MODERN BANKING
(СОВРЕМЕННАЯ БАНКОВСКАЯ СИСТЕМА)
The goldsmith bankers were an early example of a financial intermediary.
A financial intermediary is an institution that specializes in bringing lenders and borrowers together.
A commercial bank borrows money from the public, crediting them with a deposit. The deposit is a liability of the bank. It is money owed to depositors. In turn the bank lends money to firms, households or governments wishing to borrow.
Banks are not the only financial intermediaries. Insurance companies, pension funds, and building societies also take in money in order to relend it. The crucial feature of banks is that some of their liabilities are used as a means of payment, and are therefore part of the money stock.
Commercial banks are financial intermediaries with a government licence to make loans and issue deposits, including deposits against, which cheques can be written.
Let's start by looking at the present-day UK banking system. Although the details vary from country to country, the general principle is much the same everywhere.
In the UK, the commercial banking system comprises about 600 registered banks, the National Girobank operating through post offices, and a dozen trustee saving banks. Much the most important single group is the London clearing banks. The clearing banks are so named because they have a central clearing house for handling payments by cheque.
A clearing system is a set of arrangements in which debts between banks are settled by adding up all the transactions in a given period and paying only the net amounts needed to balance inter-bank accounts.
Suppose you bank with Barclays but visit a supermarket that banks with Lloyds. To pay for your shopping you write a cheque against your deposit at Barclays. The supermarket pays this cheque into its account at Lloyds. In turn, Lloyds presents the cheque to Barclays, which will credit Lloyds' account at Barclays and debit your account at Barclays by an equivalent amount. Because you purchased goods from a supermarket using a different bank, a transfer of funds between the two banks is required. Crediting or debiting one bank's account at another bank is the simplest way to achieve this.
However on the same day someone else is probably writing a cheque on a Lloyds' deposit account to pay for some stereo equipment from a shop banking with Barclays. The stereo shop pays the cheque into its Barclays' account, increasing its deposit. Barclays then pays the cheque into its account at Lloyds where this person's account is simultaneously debited. Now the transfer flows from Lloyds to Barclays.
Although in both cases the cheque writer's account is debited and the cheque recipient's account is credited, it does not make sense for the two banks to make two separate inter-bank transactions between themselves. The clearing system calculates the net flows between the member clearing banks and these are the settlements that they make between themselves. Thus the system of clearing cheques represents another way society reduces the costs of making transactions.
The Balance Sheet of the London Clearing Banks.
Балансовый отчет лондонских клиринговых банков
Таbl. 7 shows the balance sheet of the London clearing banks. Although more complex, it is not fundamentally different from the balance sheet of the goldsmith-banker shown in Таbl 6. We'll begin by discussing the asset side of the balance sheet.
The Balance Sheet of the London Clearing Banks.
Assets | £b | Liabilities | £b |
| Sterling: Cash Bills and market loans Advances Securities Lending in other currencies Miscellaneous assets TOTAL ASSETS | 2,9 34,7 83,0 9,4 54,6 15,5 200,1 | Sterling: Sight deposits Time deposits CDs
Deposits in other currencies Miscellaneous liabilitiesTOTAL LIABILITIES | 54,1 59,9 8,1
46,2 31,8 200,1 |
Cash assets are notes and coin in the banks' vaults. However, modem banks' cash assets also include their cash reserves deposited with the Bank of England. The Bank of England (usually known as the Bank) is the central bank or banker to the commercial banks.
Apart from cash, the other entries on the asset side of the balance sheet show money that has been lent out or used to purchase interest-earning assets. The second item, bills and market loans, shows short-term lending in liquid assets.
Liquidity refers to the speed and the certainty with which an asset can be converted back into money, whenever the asset-holders desire. Money itself is thus the most liquid asset of all.
The third item, advances, shows lending to households and firms. A firm that has borrowed to see it through a sticky period may not be able to repay whenever the bank demands. Thus, although advances represent the major share of clearing bank lending, they are not very liquid forms of bank lending. The fourth item, securities, shows bank purchases of interest-bearing hug-term financial assets. These can be government bonds or industrial shares. Although these assets are traded daily on the stock exchange, so in principle these securities can be cashed in any time the bank wishes, their price fluctuates from day to day. Banks cannot be certain how much they will get when they sell out. Hence financial investment in securities is also illiquid.
The final two items on the asset side of the balance sheet show lending in foreign currencies and miscellaneous bank assets. Total assets of the London clearing banks were £200,1 billion. We now shall examine how the equivalent liabilities were made up.
Deposits are chiefly of two kinds: sight deposits and time deposits. Whereas sight deposits can be withdrawn on sight whenever the depositor wishes, a minimum period of notification must be given before time deposits can be withdrawn. Sight deposits are the bank accounts against, which we write cheques, thereby running down our deposits without giving the bank any prior warning. Whereas most banks do not pay interest on sight deposits or cheque (checking) accounts, they can afford to pay interest on time deposits. Since they have notification of any withdrawals, they have plenty of time to sell off some of their high- interest investments or call in some of their high-interest loans in order to have the money to pay out deposits.
Certificates of deposit (CDs) are an extreme form of time deposit where the bank borrows from the public for a specified period of time and knows exactly when the loan must be repaid. The final liability items in Таbl. 7 show deposits in foreign currencies, miscellaneous liabilities, such as cheques, in the process of clearing.
VOCABULARY NOTES
a financial intermediary - финансовый посредник
to bring together - соединять, сводить вместе
insurance companies - страховые компании
pension lands - пенсионные фонды
the money stock - денежная масса, деньги в обращении
to issue deposits - открывать вклады
the National Girobank - англ. Национальный жиробанк
trustee saving banks - доверительные сберегательные банки
London clearing banks - лондонские клиринговые банки (банки - члены расчетной палаты)
a central clearing house - центральная расчетная палата
inter-bank accounts - межбанковские счета
Barclays - Барклайз банк (Великобритания)
Lloyds - Ллойдз банк (Великобритания)
to credit - кредитовать
to debit - дебетовать
cheque recipient - получатель чека
cash assets - денежные активы
the Bank of England - Банк Англии, Английский банк
interest-earning (syn. interest-bearing) assets - активы, приносящие процентный доход
bills and market loans - векселя и рыночные займы
short-term lending - краткосрочное кредитование
liquid (ant. illiquid) assets - ликвидные активы
liquidity - ликвидность
advances - ссуда в вида аванса
a sticky period - трудный период
securities - ценные бумаги
interest-bearing long-term financial assets - долгосрочные финансовые активы, приносящие процентный доход
government bonds - государственные облигации
industrial shares - промышленные акции
the stock exchange - фондовая биржа
niscellaneous bank assets - прочее имущество банка
sight deposit - депозит до востребования; бессрочный вклад
time deposit - срочный вклад
to withdraw - отзывать (вклад)
to run down a deposit - уменьшать вклад
cheque (checking) accounts - текущий (чековый) счет
to sell off - распродавать
cad in high-interest loans - требовать возврата займов (требовать уплаты процентов)
certificates of deposit - депозитные сертификаты
miscellaneous liabilities ' прочие (другие) пассивы
1. GENERAL DEFINITION OF ACCOUNTING
Today, it is impossible to manage a business operation without accurate and timely accounting information. Managers and employees, lenders, suppliers, stockholders, and government agencies all rely on the information contained in two financial statements. These two reports — the balance sheet and the income statement — are summaries of a firm's activities during a specific time period. They represent the results of perhaps tens of thousands of transactions that have occurred during the accounting period.
Accounting is the process of systematically collecting, analyzing, and reporting financial information. The basic product that an accounting firm sells is information needed for the clients.
Many people confuse accounting with bookkeeping. Bookkeeping is a necessary part of accounting. Bookkeepers are responsible for recording (or keeping) the financial data that the accounting system processes.
The primary users of accounting information are managers. The firm's accounting system provides the information dealing with revenues, costs, accounts receivables, amounts borrowed and owed, profits, return on investment, and the like. This information can be compiled for the entire firm; for each product; for . each sales territory, store, or individual salesperson; for each division or department; and generally in any way that will help those who manage the organization. Accounting information helps managers plan and set goals, organize, motivate, and control. Lenders and suppliers need this accounting information to evaluate credit risks. Stockholders and potential investors need the information to evaluate soundness of investments, and government agencies need it to confirm tax liabilities, confirm payroll deductions, and approve new issues of stocks and bonds. The firm's accounting system must be able to provide all this information, in the required form.