| Lead-in: Why do you think the UK has been one of the main centres of financial activity? Key words and phrases 1. insurance – страхування 2. building societies –житлово-будівельні товариства 3. Stock Exchange –фондова біржа 4. commodity market –товарний ринок 5. capital flow –приплив капіталу 6. securities trading – торгівля ціними паперами 7. International Stock Exchange –Міжнародна Фондова Біржа 8. brokers and jobbers –брокери та джобери 9. annual national income –річний національний дохід 10. retail banks –банки, що обслуговують дрібну клієнтуру 11. merchant banks –торгові банки 12. discount houses –вексельні контори, облікові доми 13. Minimum Lending Rate –ставка мінімального позичкового відсотка 14. savings banks –ощадні банки 15. financial derivative markets –фінансові похідні (вторинні) ринки 16. factoring companies –факторингові компанії 17. Unlisted Securities Market –позабіржовий ринок цінних паперів (паперів, недопущених до обігу на фондовій біржі) |
The United Kingdom has traditionally been a focus of financial activity worldwide and the 1980s saw considerable changes in the structure, composition, and regulation of financial institutions. These embrace banking, insurance, building societies, the Stock Exchange, and commodity markets.
London has continued to grow in size as a centre of financial operations. Capital flows and foreign exchange and securities trading have increased. Due to increased competition and developments in technology the International Stock Exchange was reorganized. As a result, new companies have been created to link British and foreign banks with former brokers and jobbers. The Financial services Act of 1986, the Building Societies Act of 1987, the Banking Act of 1987 regulate these new financial organizations.
Banking and financial services have always played in important role in the country’s economy. London is the world’s leading centre of insurance and handles 20 per cent of the world’s insurance business. It is also the world’s largest centre for foreign exchange. In the 1990s financial institutions and insurance accounted for 7 per cent of Britain’s annual national income.
The Bank of England is the only bank that issues banknotes in England and Wales. Several banks in Scotland and Northern Ireland issue currencies in limited amounts. There are more than a dozen commercial banks in Britain, including Lloyds, Barclays, National Westminster, and Midland.
All commercial banks are supervised by the Bank of England. The Bank of England licenses retail banks, merchant banks, discount houses, and other British or foreign banks. The Bank of England also controls the Minimum Lending Rate, which influences the general structure of interest rates. Savings banks, building societies also provide some banking services. Historically, the financial services industry has been based in the City of London. One of the world’s largest financial derivative markets is in the City as well. Saving by individuals is channeled into investments through insurance companies, pension funds, investment and unit trusts. Institutions that specialize in particular types of financing are finance houses, factoring companies, finance corporations. The UK has a number of organized financial markets. The securities markets consist of the International Stock exchange, which deals with officially listed stocks and shares, the Unlisted Securities Market, for smaller companies, and the Third Market, for unlisted companies. The London Stock Exchange is one of the biggest in the world. In 1986 an event known as the ‘Big Bang’ changed it significantly. This led to the rapid expansion of products, markets, and number of employees.
Ø Comprehension:
1. What changes took place in the financial life of Great Britain in the 1980s?
2. What is the percentage of the world’s insurance business that London handles?
3. Name the functions that the Bank of England performs.
4. What do securities markets consist of?
Ø True-false questions:
| 1. The 1990s saw considerable changes in the structure of financial institutions. | |
| 2. After the 1990s the International Stock Exchange was reorganized. | |
| 3. In the 1990s financial institutions and insurance accounted for 10 per cent of Britain’s annual national income. | |
| 4. There are many banks that issue banknotes and coins in England and Wales. | |
| 5. The Bank of England licenses retail banks, merchant banks, discount houses, and other British or foreign banks. | |
Ø Text organization:
The Nationalments below express the main ideas of the text. Number them so that they are in the same order as the ideas in the text. The first one is given for you:
| Nationalment | Order | |
| a. | The UK has a number of organized financial markets. | |
| b. | Historically, the financial services industry has been based in the City of London. | |
| c. | The United Kingdom has traditionally been a focus of financial activity worldwide. | |
| d. | The 1980s saw considerable changes in the structure of financial institutions. | |
| e. | There are more than a dozen commercial banks in Britain, including Lloyds, Barclays, National Westminster, and Midland. | |
| f. | All commercial banks are supervised by the Bank of England. | |
| g. | In 1986 an event known as the ‘Big Bang’ changed the London Stock Exchange significantly. |
Ø Viewpoint:
Were there any changes in the financial life of Ukraine after the collapse of the Soviet Union?
