Otázka: Money and banking
Jazyk: Angličtina
Přidal(a): Barunka
Banks are institution that deal with money and provide other financial services.
Banks buy and sell money for profit.
Profit = difference between the interest on loans and the interest paid on deposit and money from providing banks services
Money
- anything generally accepted as a means of paying for goods and services
- a measure of value so the value of the ticket is stated in crowns
- serves as a store of value – unlike many goods, it will keep
Forms of money
- currency – bank notes and coins
- demand deposits – money in current or savings accounts
- term deposits – that restrict withdrawals to a specific time
- securities – shares, bonds, bills of exchange, cheques, certificates of deposits
- payment cards
The banking system
- central banks
- issues currency
- buys and sells government securities
- keep foreign currency and gold reserves
- supervises and regulates commercial banks
- represents our country abroad
- is responsible for monetary policy
- determines discount interest rates
- manages state accounts
- commercial banks
- are profit-making businesses that accept deposits and use these money to provide, make, loans
- they perform the following operations:
- opening and managing current accounts, deposit accounts and foreign currency accounts
- providing loans and mortgages
- issuing payment cards, arranging electronic money transfers, standing payment orders, handling cheques and bills of exchange
- exchanging foreign currency, providing information to clients
Types of account
- current accounts
- they are used for writing cheques, paying by debit card and paying bills
- the have low interest
- deposits accounts and savings accounts
- long term deposits usually have higher interest than short-term deposits
Loans
- is money lent to a borrower by a lender
- the borrower must pay off more money – his loan plus the interest on the sum
- in the process of making loans, banks create new money
- there are:
- long-term loans
- medium-term loans
- short-term loans
Mortgage
- is a long term loan, a real property (a building) is uses as a guarantee
- if client is unable to repay his loan, the property becomes the one of the bank
Payment cards
- they allow their holders to withdraw cash from automated teller machines in their country as well as abroad
- debit cards
- holders can’t overdraw their account, they have to stay in the black
- credit cards
- holders can overdraw their account
- this overdraft is agreed by the bank up to a maximum of 10 000 crowns for example
Trends in banking
- internet banking
- you have access to your account through a personal computer connected to the internet
- mobile banking
- client communicates with bank through a mobile phone
