Today the British banking is a complicated tripartite system' like a three-layer cake. The system is: headed by the Bank of England.
This bank was established under a royal charter in 1694. The head of the Bank is Governor of the Bank appointed by the Queen on the recommendation of the Prime Minister. The Queen also appoints Deputy Governor and the Court of Directors, which consists of 16 directors.
The Bank of England is a central bank or a national bank. It controls the British banking system, issues banknotes and mints coins. It lends and borrows money ior the government, manages the national debt and is in the control of the nation's gold reserve. The other two layers are:
· the commercial or joint stock clearing banks
· specialized banking institutions such as the discount houses and merchant banks.
The commercial or joint-stock banks deal with the general public. The four large English commercial banks are known as the Big Four; They are Barclay Lloyds, the Midland, and the National Westminster. Together they have upwards of 10,000 branches. Commercial banks render various services Lo companies and individuals. Some of the services are:
· to receive or accept from their customers the deposit of money
· to collect and transfer money both at home and abroad against deposit and current accounts
· to provide overdrafts to both personal and business customers,
· to lend loans to their customers
· to exchange money
· to supply economic information and to prepare economic reviews to be published
· to make foreign exchange transactions, including spot transactions, forward transactions and swap transactions
· to issue various banker's cards
Merchant banks find discount houses deal only with special customers providing funds for special purposes. They accept, commercial bills of exchange and offer quite a lot of financial services. They provide advisory services about new issues of securities, mergers, take-overs and reorganizations. They also arrange financing for their customers and provide fund-management services.
Besides there is a big group of banks in the United Kingdom made up of foreign banks. All the major foreign banks are represented in the UK by subsidiary, branch, representative offices or consortium. They provide finance both in sterling and in other currencies and offer a wide range of financial services.
Lombard Street is" the symbol of British banking. This is the place where the first bankers coming from Italy settled.
prime minister (syn. secretary )
court of directors
совет директоров (в Банке Англии)
Syn. board of directors
(в др. банках, на фирмах)
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UNIT 4: BASIC FACTORS IN BUSINESS
Business is the human activity related to material things. It includes production, financing and merchandising. Merchandising is the selling of products, and providing various services, such as accounting, distributing, and repair.
There are four basic factors of production: land, labour, capital, and entrepreneurship.
In order to produce things, it is necessary to use land. It refers not only to a piece of real estate where we can build a factory, but it also means raw materials used for production. All the raw materials come from the land, the air, and the oceans. Some natural resources are non-renewable. If they are used now, they will not be available in the future. Examples are oil and coal deposits. Other resources are renewable. Examples are forests and fish.
Labour refers to all human resources that could be used in production of goods and services. Of course, the whole population is not available for use in production. The total number of persons available for work refers to collectively as the labour force, or the working population. Most labour changes raw materials into finished products and then distributes these to buyers.
The next factor, capital, can be used to replace or reduce the amount of physical and mental labour that people have to use in order to operate business. In everyday language, capital means several things. The most general meaning is wealth or money. But it also refers to the equipment that money purchases. Capital may include tools, machines, and buildings such as factories and warehouses where goods are produced and stored. Capital can take either of two forms, fixed or circulating. Fixed capital comprises mainly plant and equipment. Circulating, or working, capital includes stocks of raw materials, all goods in the process of being produced and all stocks of finished products.
When people put together land, labour, and capital to make something of value, it is called entrepreneurship (or, sometimes, as enterprise). The entrepreneur is responsible for starting business activity. He manages the business by deciding the general policies for business operation. In order to be successful, an entrepreneur must look for new products or new ways of making things, and new methods of distribution, or he must offer new services. Many of these entrepreneurial functions are carried out by the staff of the companies. Most firms selling consumer goods are in constant competition to make new and better products, called product innovation. Most large manufacturing businesses compete to find better and lower-cost methods, called process innovation. The most important function of the entrepreneur is that he is responsible for all business debts. When a company goes bankrupt, it causes problems for many people. The employees have to seek work elsewhere, the customers must look for another place to buy their products, the creditors lose money that they have lent to the company. But the entrepreneur takes the biggest risk. If the business succeeds of fails, he must pay the creditors up to the limit of his ability to pay. If he is skillful – and lucky – the money he receives from his business activity will pay for the land, labour, and capital, and there will be some extra money remaining for him. This extra money is the profit. If the money he receives is not enough to pay for all the costs, the difference is a loss.