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Unit 1

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30 views

Unit 1

Uploaded by

Sharon Ains
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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UNIT 1 :

ORGANISATION OF THE
FINANCIAL SECTOR
Unit 1: The organization of the financial industry

AIMS
❖ To learn about: the organization of the financial industry; key
vocabulary of banking products and services
❖ To learn how to: express permission, necessity and prohibition
❖ To practice: asking and talking about terms and conditions of
bank accounts
Unit 1: The organization of the financial industry

Background
The financial sector (or the financial services industry) includes
the following areas:
❖ commercial banks, which receive customers' deposits and
make loans
❖ private banks, which manage the assets of wealthy individuals
❖ investment banks, which advise and raise money for
companies, and sell and trade financial products
Unit 1: The organization of the financial industry

❖ the money markets, in which financial institutions, companies


and government bodies can borrow and invest in the short-
term (less than one year)
❖ the currency markets, in which individuals and companies can
buy and sell foreign currency
❖ the stock market, where the stocks and shares of public
companies are traded
❖ the futures and derivatives markets, where these financial
instruments are traded
Unit 1: The organization of the financial industry
❖ the inter-bank clearing system, in which financial institutions
settle credits and debits among themselves
❖ insurance companies, which offer financial protection against
risks such as accidents, fire, theft, loss, damage, etc.
❖ accounting and auditing companies, which examine companies’
❖ financial records to make sure they are accurate and in
accordance with the law
❖ regulatory authorities, which ensure that financial institutions
and markets comply with laws and regulations.
Vocabulary 1 (p.9)
mortgage
1 A _____________ is a loan to buy property.
deposit
2 Money you put in the bank is called a _____________
3 Money paid to a retired person is called a _____________
pension
4 Securities representing part-ownership of a company
shares
are called _____________ stocks
or _____________
Vocabulary 1- cont. (p.9)
capital
5 The money invested in a business is its _____________
6 _____________
Bonds are interest-paying securities issued by
companies that need to borrow money.
7 A _____________
takeover is when a company gains control of
another one by buying its stocks.
8 A _____________
merger is when two formerly separate
companies join together.
Listening 1: The development of the financial industry

+ Most financial institutions were national: ‘So they were


national banks belonging to that country.’

+ Most financial institutions were specialized: ‘The other key


feature was that financial institutions were specialised.’
Listening 1: The development of the financial industry

Retail banks: making loans, receiving deposits


Building societies: arranging mortgages
Insurance companies: providing pensions; offering life insurance

Investment banks: arranging mergers; giving financial


advice to companies; issuing shares or bonds, arranging or
fighting takeover bids
Listening 2: Going international
1/ Many banks have become international, by buying banks in
other countries or through being taken over.
2/ The City of London is a major financial centre but most of the
banks operating there are not British, just as
Wimbledon is a big international tennis tournament that takes
place in London, although very few of the players are British.
3/ Internationalization and homogenization (making all the
banks become the same, or very similar).
Vocabulary 2 (p. 11)

1/ groups of companies that have 2/ people who place money in


joined together bank accounts

3/ abolished or ended rules and 4/ sums of money paid as


restrictions penalties for breaking the law

5/ made it illegal to do something 6/ control of something by rules or


laws

7/ cancelled or ended (a law) 8/ guaranteeing to buy a company’s


newly issued stocks if no one else
does
Vocabulary 2 (p. 11)

1/ conglomerates 2/ depositors

3/ deregulated 4/ prohibited

5/ regulation 6/ repealed

7/ underwriting
Reading: Regulation and deregulation- question 1- p.11

1/ underwriting 2/ depositors

3/ regulation 4/ prohibited

5/ deregulated 6/ repealed

7/ conglomerates 8/ fines
Reading: Regulation and deregulation- question 2- p.12

(b) Commercial banks used their investors’ money to buy


securities and many depositors lost money.
(d) New laws in the US and Britain separated commercial and
investment banks.
(c) Many banking regulations were ended and big financial
conglomerates were formed.
(a) Major US banks were fined for giving bad advice to investors.
Reading: Regulation and deregulation- question 3- p.12

1/ FALSE 2/ FALSE

3/ TRUE 4/ TRUE

5/ FALSE
Language focus-question 3- p.13

1/ were not allowed/couldn’t 2/ can/ are allowed to

3/ don’t have to, don’t need to/ 4/ were not allowed to/couldn’t
needn’t
5/ mustn’t/ aren’t allowed 6/ needn’t, don’t need to/ don’t
to/ couldn’t have to

7/ allowed to/ able to 8/ were not allowed to/ couldn’t

9/ have to/ need to/ must (must would 10/ didn’t have to/ didn’t need to
probable come before still)
THE END

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