Through a variety of means, they carry their message into the schools and into the television screens of the nation. One of many activities sponsored by US businesses is a nationwide program called Junior Achievement. Local business people help high-school-age «junior achievers» to organize small companies, sell stock to friends and parents, produce and market a product (key chains, perhaps, or wall decorations) and pay stockholders a dividend. The same young people act as company officers, sales people and production workers. The idea is to give young people a deeper appreciation to the role enterpreneurship plays in a capitalist society and to give them experience in business practices.
The list of best selling books often includes works by successful business people relating their personal formulas for getting ahead.
Семестр
ADDITIONAL MATERIAL
BANKS AND FINANCIAL INTERMEDIARIES
Banks are financial institutions that accept money deposits and make loans. Included under the term “banks” are firms such as commercial banks, savings and loan associations, mutual savings banks, and credit unions.
Banks are important for three reasons:
1. They provide a channel for linking people who want to save with those who want to invest.
2. They play an important role in determining the money supply.
3. They are a source of the financial innovation that is expanding the ways in which we can invest our savings.
Banks play a critical role in the creation of money, not by printing $ 50 bills but by lending. Banks loans create checking account deposits, a large component of the money supply.
If you wanted to make a loan to some companies, you would not go directly to the president of the company and offer a loan. Instead, you would lend your money to such companies indirectly through financial intermediaries, institutions such as commercial banks, savings and loan associations, mutual savings banks, credit unions, insurance companies, mutual funds, pension funds, and finance companies that borrow funds from people who have saved and in turn make loans to others.
Banks are the financial intermediaries that the average person interacts with most frequently. A person who needs a loan to buy a house or a car usually obtains it from a local bank. Most Americans keep a large proportion of their financial wealth in banks
In the form of checking accounts, savings accounts, or other types of bank deposits.
Financial intermediation is an important activity in the economy because it allows funds to be channeled from people who might otherwise not put them to productive use to people who will. In this way, financial intermediaries help promote a more efficient and dynamic economy.
Thus, banks are the most important of a number of financial intermediaries that channel funds from people who might not put them to productive use to people who can do so. Banks also play a critical role in the creation of money and have been important in the rapid pace of recent financial innovation.
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COMMERCIAL BANKING
Commercial banks are businesses that trade in money. They receive and hold deposits, pay money according to customer’s instructions, lend money, etc.
There are still many people in Britain who do not have bank accounts. Traditionally, factory workers were paid wages in cash on Fridays. Non-manual workers, however, usually receive a monthly salary in the form of a cheque or a transfer paid directly into their bank account.
A current account (US: checking account) usually pays little or no interest, but allows the holder to withdraw his or her cash with no restrictions. Deposit accounts (in the US also called time or notice accounts) pay interest. They do not usually provide cheque (US: check) facilities, and notice is often required to withdraw money. Standing orders and direct debits are ways of paying regular bills at regular intervals.
Banks offer both loans and overdrafts. A bank loan is a fixed sum of money, lent for a fixed period, on which interest is paid; banks usually require some form of security or guarantee before lending. An overdraft is an arrangement by which a customer can overdraw an account, i.e. run up a debt to an agreed limit; interest on the debt is calculated daily.
Banks make a profit from the spread or differential between the interest rates they pay on deposits and those they charge on loans. They are also able to lend more money than they receive in deposits because depositors rarely withdraw all their money at the same time. In order to optimize the return on their assets (loans), bankers have to find a balance between yield and risk, and liquidity and different maturities, and to match these with their liabilities (deposits). The maturity of a loan is how long it will last; the yield of a loan is its annual return - how much money it pays - expressed as a percentage.
TYPES OF BANKS
Central banks supervise the banking system; fix the minimum interest rate; issue bank notes; control the money supply; influence exchange rates; and act as lender of last resort.
Commercial banks are businesses that trade in money. They receive and hold deposits in current and savings accounts, pay money according to customers’ instructions, lend money, and offer investment advice, foreign exchange facilities, and so on. In some countries such as England these banks have branches in all major towns; in other countries there are smaller regional banks. Under American law, for example, banks can operate in only one state. Some countries have banks that were originally confined to a single industry.
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In some European countries, notably Germany, Austria, and Switzerland, there are universal banks which combine deposit and loan banking with share and bond dealing, investment advice, etc. Yet even universal banks usually form a subsidiary, known as a finance house to lend money - at several per cent over the base lending rate - for hire purchase or installment credit, that is, loans to consumers that are repaid in regular, equal monthly amounts.
In Britain, the USA and Japan, however, there is, or used to be, a strict separation between commercial banks and banks that do stockbroking or bond dealing. Thus in Britain, merchant banks specialize in raising funds for industry on the various financial markets, financing international trade, issuing and underwriting securities, dealing with takeovers and mergers, issuing government bonds, and so on. They also offer stockbroking and portfolio management services to rich corporate and individual clients. Investment banks in the USA are similar, but they can only act as intermediaries offering advisory services, and do not offer loans themselves.
Yet, the distinction between commercial and merchant or investment banks has become less clear in recent years. Deregulation in the US and Britain is leading to the creation of “financial supermarkets” - conglomerates combining the services previously offered by stockbrokers, banks, insurance companies, etc.
In Britain there are also building societies that provide mortgages, i.e. they lend money to home-buyers on the security of houses and flats, and attract savers by paying higher interest than the banks. The savings and loan associations in the United States served a similar function, until most of them went spectacularly bankrupt at the end of the 1980s.