ESP Series
Alison Smith
FLASH on
for BANKING & FINANCE
Audio files in MP3 format are available online at www.elionline.com
FLASH on English
English for BANKING & FINANCE
FLASH on Alison Smith
FLASH on English for BANKING & FINANCE offers finance and banking-related vocabulary, presented in realistic situations, and practice in relevant language structures. It aims to all students preparing to enter professions related to banking and finance or to professionals wanting to improve their language competence.
ESP Series
English for BANKING & FINANCE
Downloadable MP3 Audio Files
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www.elionline.com
Alison Smith
FLASH on
ESP Series
English for BANKING & FINANCE
Contents Unit
1
Topic
Vocabulary
Skills
Banking Systems
Types of banks
Reading: banking categories
Alternative Banking Systems
Banking terminology
Reading: microcredit, time banking, ethical and Islamic banking Speaking and listening: ethical banking Speaking: time banking
Central Banks
Common compound nouns for banking
Reading: UK, US and European Central Banks Listening: European Central Bank Speaking and writing: presenting a central bank and its role
Business Banking
Types of accounts E-banking terminology
Reading: business accounts and financing Listening: changes in UK High Street banking Speaking: advantages and disadvantages of e-banking
Types of Cards and Fraud
Fraud and scams
Reading: types and use of different cards, understanding financial fraud Speaking: discussing different types of card Listening: protecting yourself from fraud
Payment Methods (1)
Terminology for payment and transactions
Reading: risks and benefits of international payment methods Speaking: discussing bank transfers Writing: analysing different payment methods
Payment Methods (2)
Letters of credit
Reading: documentary collection and letters of credit Writing: an essay on international payment methods
pp. 4-5
2 pp. 6-9
3 pp. 10-13
4 pp. 14-17
5 pp. 18-21
6 pp. 22-26
7 pp. 27-30
2
Unit
8
Topic
Vocabulary
Skills
Bank Correspondence
Phraseology for comparing, negotiating, recommending and explaining
Reading: a letter from a bank Speaking: role play between bank manager and customer
Payment Issues
Terminology for business correspondence
Reading: business correspondence relating to credit references, payment conditions and extension of credit Writing: composing and replying to business letters and emails
Payment Reminders and Replies
Asking for payment, giving explanations, making proposals
Writing: reminders for payments and replies Listening: late payments and reminders Speaking: role play between creditor and debtor
Stock Exchanges and Commodity Exchanges
Market and trading terminology
Reading: Stock and Commodity exchanges, indices and brokers Speaking: working as a broker
London and New York Stock Exchanges
Securities fraud and speculation
Reading: key information on LSE and NYSE Listening: stock market crashes and economic bubbles Speaking: presentation on shares and securities trading Writing: a report on a case of securities fraud
Explaining Financial Data
Changes and trends
Reading and speaking: understanding and describing charts and graphs Writing: a report on an investment portfolio
Applying for a Job
CVs and covering letters
Reading: how to write a CV and covering letter Writing: prepare a CV and covering letter Speaking: tips for a job interview
pp. 31-32
9 pp. 33-38
10 pp. 39-45
11 pp. 46-48
12 pp. 49-51
13 pp. 52-55
14 pp. 56-60
pp. 61-63 Banking & Finance Word Bank
1
MP3 audio files downloadable from www.elionline.com
3
1
Banking Systems
1
Pairwork Do you know the names of any foreign banks? What countries are they from? Talk together.
2
Read the texts and decide if the sentences on page 5 are true (T) or false (F). If there is not enough information, choose ‘doesn’t say’ (DS).
Banking can be defined as the activity of accepting or borrowing money from clients, whether individuals or companies, and then lending out this money to other individuals or companies in order to earn a profit. Naturally the services offered by today’s banks, as well as the types of bank in existence, are much more multifaceted than this.
Types of Bank Some broad groups of banking categories are as follows:
4
RETAIL BANKS
COMMERCIAL BANKS
These deal with individual customers and concentrate on mass market products such as current and savings accounts, mortgages, loans and credit and debit cards. All of the major retail banks in the UK also serve the needs of small businesses.
These deal with business clients, both large and small, and as well as current and deposit accounts, they offer foreign currency accounts and exchange, lines of credit and guarantees for international trade, payment processing, loans for business development and expansion.
INVESTMENT BANKS
PRIVATE BANKS
This kind of bank does not take deposits but works with companies and investment markets, for example by underwriting the issue of stocks or bonds and advising on merger and acquisition processes.
These manage the banking and financial needs of high net worth individuals.
1 OFFSHORE BANKS
BUILDING SOCIETIES
These banks are located in countries which are considered tax havens due to low or no tax systems, and they offer financial and legal advantages to investors from other countries.
These are mutual financial institutions, which means that they are owned by their members. In the past their main business was savings accounts and mortgages, although now most have diversified and offer similar services to banks.
POSTAL SAVINGS BANKS These are operated in conjunction with the national postal system of a country. When they were first introduced, they only offered savings accounts, however nowadays most of them offer complete banking services.
T
F
DS
1 2 3 4 5
The principal aim of banking is to make a profit through borrowing and lending money. Most private customers will have accounts with a retail bank. Retail banks do not offer services to any kind of business. Commercial banks are bigger organisations than retail banks. A company interested in increasing its capital through new shares would consult an investment bank. 6 Private banks deal with people with a lot of money and investments. 7 Offshore banks are only located on islands. 8 Building societies and postal savings banks offer similar services to banks.
3
Write the translation of the following words and expressions in your language.
1 borrow 2 lend 3 current account
__________________ __________________ __________________
4 deposit account 5 mortgage 6 loan
__________________ __________________ __________________
MY GLOSSARY bond /bɒnd/ ___________________________________ customer / k stəmə(r)/__________________________ guarantee / rən ti / ___________________________ high net worth /ha� net w θ/ ____________________ investment /�n vestmənt/ _______________________
investor /ď?Šn vestÉ™(r)/ ___________________________ stock /stÉ’k/ ___________________________________ tax haven / t ks heď?Švn/ _________________________ to underwrite /tu ndÉ™ raď?Št/ ____________________
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2
Alternative Banking Systems 1
Pairwork Have you ever heard of microcredit? What do you think it is? Talk together.
Microcredit is the concept of lending small amounts of money – microloans – to people who would not have access to such funds through mainstream routes. It was conceived in the developing world as a way to help poor people and alleviate poverty, and it is especially aimed at helping women and improving their position in society. Given that their aim is to help those at the bottom of the social pyramid, microloans are granted without the need for any collateral. Perhaps the most famous example is the Grameen Bank, which was founded by Nobel Peace Prize winner Muhammad Yunus in 1976 to provide credit to the poor people of his country, Bangladesh. Since then, the concept of microcredit has become more widespread and is no longer confined to the developing world. For example, in the USA Grameen America is providing loans, training and support to those living on the poverty line so that they can build their own small businesses, improving the future for themselves and their families, whilst also Muhammad Yunus boosting the local economy. Similar projects have been launched in the UK too. In recent years there has been criticism of the microfinance system and its claims to reduce poverty and empower women in developing countries. Some experts argue that there is no evidence that microfinance projects have had positive impacts and, on the contrary, are in reality little different than funds from other financial sources such as moneylenders or banks. These critics believe that basic survival should come before growing a business, and microcredit ought to be combined with other interventions to improve financial literacy and understanding. If customers have no knowledge of how to save and plan for repayments, it is unclear how are they going to be able to pay off their debt. They therefore risk finding themselves in a worse position than previously when unable to pay off their loan. There may also be the conflict of whether it is possible for a bank or organisation to run a commercially sustainable operation while simultaneously maintaining its principles and values of caring about the welfare of those in need.
MICROLOAN SUCCESS STORIES Name: Altagracia Damian Country: Dominican Republic Loan: $80 Business: Ceramics business When she started her business, she had only 16 cents in her pocket. With her first loan, she purchased clay and glazes. Since then she has received a total of eight loans and now has seven employees and can pay for her children’s education.
MICROLOAN SUCCESS STORIES Name: Gonuguntla Mariamma Country: India Loan: $80 Business: Livestock farmer Uneducated and illiterate, she bought a buffalo with her first loan to help provide for her family. With further loans, she managed to buy other livestock and now has four buffaloes, one calf and seventeen goats. She has also learnt to read and count a little and sign her name.
6
2 2 Read the text on page 6 and answer these questions.
1 What is microcredit? ___________________________________________________________________________ 2 Who are the normal recipients of microloans? ______________________________________________________ 3 What is the Grameen Bank? _____________________________________________________________________ 4 What is the purpose of microloan projects in countries like the USA and UK? ________________________ _____________________________________________________________________________________________ 5 Why has there been some criticism of the microfinance system? ________________________________________ 6 What is one suggestion to improve microcredit? _____________________________________________________ 7 What risk can recipients of microloans face? Why? _________________________________________________ 8 Why could it be inconsistent for a bank to be both profit and welfare-led? __________________________ ____________________________________________________________________________________________
3 Match these words with the correct definition.
1 alleviate 2 poverty 3 collateral 4 empower 5 financial literacy 6 repayment
a b c d e f
support and encourage valuable property the act of paying back someone or something make a problem or situation less severe the condition of being extremely poor being able to understand basic principles of finance
Time Banking
4
Read the text and answer the questions.
The idea of using time as a means of exchange was conceived by Edgar Cahn in the late 1980s in the USA. Since then the concept of time banking has spread and there are now time banks all over the world. The idea behind time banking is quite simple: it uses time as a currency rather than dollars, pound or euros. Participants ‘deposit’ time in a time bank by offering a particular skill or service to other people, and then they are able to ‘withdraw’ the equivalent amount of time and use it when they need some particular help or service. Time banking is based on the following core values: • We are all valuable assets with something to give. • The definition of work should include both economic and social activity, things like raising a family, building a safe community, caring for others and our planet. • Reciprocity and how we can help each other. • Networks of people are stronger than individuals and we need communities built on commitment, trust and support. • Everybody is important. We must all recognise and respect the contributions everyone can make. Edgar Cahn, a former civil rights lawyer, started developing the idea of time banking after suffering a massive heart attack at age 44 which radically changed his perception of life. He is the author of several books, including No More Throw Away People.
1 Who developed the idea of time banking and when? ________________________________________________ 2 What currency is used in a time bank? ____________________________________________________________ 3 How does a time bank work? ____________________________________________________________________ 4 What fundamental principles are behind the concept of time banking? _________________________________
5
Speaking Discuss these questions in small groups.
1 Do you think time banking is a good idea? Why/Why not? 2 How could it be helpful in times of financial crisis? 3 Will the concept of time banking increase in the future? Why/Why not? 4 Are there any time banks in your country/town? 5 What skills and experience could you offer a time bank? 6 What help or services might you need from a time bank?
7
2 Ethical Banking in the UK
6
Pairwork Have you ever heard about ethical and Islamic banks? Are there any in your country/town? Discuss with your partner.
As more and more consumers have started changing their lifestyles and thinking about their social and environmental responsibility, the number of people in the UK choosing an ethical bank over the conventional, profit-driven banks has increased considerably over the last few years.
ETHICAL BANKS In the UK, an ethical bank offers the same services as a traditional bank and it is regulated by the same authorities that control traditional banks. How it differs is in its policies, which have underlying moral and ethical principles, and in the transparency of its actions. Loans are not given where the money will be used, for example, for the production of weapons or the exploitation of child labour. They also issue many microloans to help small businesses. Investments are only made in areas such as environmentally-friendly businesses, fair trade organisations or to finance projects in developing countries.
ISLAMIC BANKING Islamic banking can also be considered as a kind of ethical banking system, and in the UK it is popular with both Muslim and non-Muslim customers. According to sharia law, making money from money is forbidden, so Islamic banks do not apply interest and instead make their money through trade and investments. These investments can only be in areas allowed by Islamic law, so areas such as gambling and alcohol are not permitted. The risk of profit and losses is also shared between the bank and the borrower. These qualities of fairness and equity make Islamic banking a form of ethical banking, and one which is, according to financial experts, quite stable in times of financial crisis.
The 2012 Financial Services Act created the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) in order to protect and improve the UK’s economy. The PRA, which is part of the Bank of England, is responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and investment companies. The FCA has the objective of protecting the integrity of the UK’s financial market and promoting effective competition.
8
2 7
Read the texts on page 8 and complete these sentences. 1 Recently there has been an increase in‌ __________________________________________________________ ______________________________________________________________________________________________ 2 The authorities control both‌ ___________________________________________________________________ ______________________________________________________________________________________________ 3 Ethical banks differ from traditional banks because‌ ________________________________________________ ______________________________________________________________________________________________ 4 Examples of ethical investments are‌ ____________________________________________________________ ______________________________________________________________________________________________ 5 Islamic banks follow‌ __________________________________________________________________________ and therefore do not ‌__________________________________________________________________________ 6 Islamic banks are not allowed to invest‌ __________________________________________________________ ______________________________________________________________________________________________
8
1
Listen to this interview about ethical banking in the UK and choose the correct option.
1 Why might people want to choose an ethical bank? A There has been a lot of negative press about banks and their actions. B Traditional banks no longer offer the most competitive service. C People want to live better quality lives. 2 Why do the Co-op bank and Smile get a poor ethical rating? A They do not invest enough in animal protection programmes. B Their customers include unethical supermarkets. C They are part of a group which has some unethical practices. 3 Building societies‌ A are not the same type of organisation as a bank. B cannot offer current accounts. C always offer the best ethical option. 4 How are credit unions run? A The same way as a bank. B To benefit their members. C To profit their shareholders. 5 What do Charity Bank, Triodos and the Ecology building society have in common? A They get top ratings with Ethical Consumer magazine. B They operate in a socially and environmentally-aware manner. C They offer the best savings and mortgage rates.
9
Speaking Discuss these questions in small groups. 1 Do you think that ethical banks maintain their promises? 2 Would you choose to bank with an ethical or Islamic bank? Why/Why not?
MY GLOSSARY to boost /tÉ™ bu st/ ______________________________ collateral /kÉ™ l tÉ™rÉ™l/ ___________________________ ethical / eθď?Škl/ _________________________________ exploitation / eksplÉ”ď?Š teď?ŠĘƒn/ _____________________ illiterate /ď?Š lď?ŠtÉ™rÉ™t/ ______________________________ to launder /tÉ™ lÉ” ndÉ™(r)/ ________________________
mainstream / meď?Šnstri m/ _______________________ microfinance system / maď?Škrəυfaď?Šn ns sď?ŠstÉ™m/ ___ _____________________________________________ micro loan / maď?Škrəυ ləυn/ ______________________ regulation / re ju leď?ŠĘƒn/_________________________ repayment /rď?Š peď?ŠmÉ™nt/ _________________________
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