VI. Summarize the following passage in about 100 words: Young Americans Bank

Young Americans Bank has clients who stand no taller than T. Boone Pickens’ belt buckle. The bank makes MasterCards available to customers as young as 12. To qualify for the $95-a-year plastic credit card, the applicant must have an account at the bank and, if under 18, an adult cosigner. When the bank opened, it amused locals. But the bank is proving itself. It opened an impressive 5,000 accounts in the first seven months of business, has $1.3 million in capital, and plans to break even this year, even though the typical new bank takes three years to make a profit.

Junior patrons can open a checking account with as little as $10 and take out loans. The bank has lent money to buy a horse, to cut a record, and to start and sustain young businesses. “We get some incredibly ambitious kids here,” says Leanne Cadman, Young Americans’ loan administrator. “They’re 15, 16 years old, and they’re ready to make a million dollars.” The bank accommodates even the most pint-sized entrepreneur. It features steps to the teller windows and multilevel loan desks.

The bank was started by Denver cable TV magnate Bill Daniels as a way to teach money management skills to kids. He spent two years convincing the Colorado banking board to issue a state charter and contributed $2 million of his own money toward the project. He also enlisted 20 founding sponsors, who agreed to deposit $50,000 to $100,000 each for at least a year without collecting interest.

Some skeptics ask if “buy now, pay later” is a lesson we want to teach our youth. But despite skeptics, young bank customers keep coming. Cadman sees six to eight loan applicants a week – some of whom have already launched successful business ventures. Fourteen-year-old Lee Nicholson was his snow removal business take off after borrowing $700 for a snowblower. With a $1,500 loan, University of Colorado junior Greg Phelps began marketing a software program for Shaklee distributors.

VII. Choose the right answer:

1. A “current/checking” account is …

   1. one which is available for the time being;

   2. one in which savings are held4

   3. one which is used all the time for day-to-day transactions.

2. A “deposit/savings” account is …

   1. one from which regular payments are made;

   2. one in which savings are held;

   3. one from which withdrawals can be made by cheque.

3. The “rate of interest” is …

   1. a percentage of each unit of money paid for its use;

   2. rate of profitability;

   3. portion of an investment on which the interest is calculated.

4. An “overdraft” is …

   1. an amount by which the balance in a current account exceeds the value of a cheque drawn from it;

   2. an amount by which the value of a cheque exceeds the balance in the current account;

   3. an excessive balance in a current account.

VIII. Do it in English making use of the active vocabulary: Порівняння банківської структури сша та інших країни

Структура комерційного банківництва Сполучених Штатів значно відрізняється від структури інших промислово розвинутих країн. Сполучені Штати — єдина країна, яка не має національної банківської системи, в якій банки мають відділення по всій країні. На відміну від інших країн, Сполучені Штати мають старовинну модель регулювання бан­ківської сфери штатами і феде­рального регулювання, яке забез­печує керування банківською діяльністю між штатами, що становить національну банківську систе­му. Один із результатів такої орга­нізації банківництва полягає в тому, що в Сполучених Штатах існує на­багато більше банків, ніж в інших промислово розвинутих країнах. На відміну від Сполучених Штатів, які мають приблизно 12 000 комерційних банків, у кожній іншій промислово розвиненій країні не більше 1000 банків. Наприклад, в Японії є приблизно 150 комерційних банків, тобто фактично 1% від їхньої кіль­кості в США, незважаючи на те, що населення і економіка Японії становлять половину населення і обсягу виробництва США.

Інший наслідок обмеження від­ділень банків полягає в тому, що американські банки значно менші, ніж банки в інших країнах. Тільки один американський банк «Citicorp», входить у десятку найбільших бан­ків світу. Наступний найбільший за розмірами американський банк, «BankAmerica», навіть не потрапляє до списку перших двадцяти п'я­ти. Своєрідність банківської струк­тури Сполучених Штатів ще біль­ше вирізняється від інших структур у світі після поглиблення європейської економічної інтеграції в 1992 р. Починаючи з 1 січня 1992 р.. всі банки, які мають ліцензію Європейського Економічного Співтовариства (ЄЕС), безперешкодно надаватимуть повний набір банківсь­ких послуг в будь-якій країні ЄЕС. Внаслідок цього повинна скластися всеєвропейська банківська система з щораз більшими європейськими банками.

IX. Familiarize yourself with the following text. Be ready to answer the following comprehension questions based on the text. Summarize the text in about 150 words.

Table 1. Regulatory classification of commercial banks

(as of December of 1990, 1997, 2000)

Source of charter	Classification of banks	Federal Reserve System members	FDIC members	Number of banks
				1990	1997	2000
Office of Comptroller of the Currency	National banks			4,425	4,572	3,990 (27,396)
State bank regulatory agencies	State banks	State member banks		997	1,091	1,057 (5,908)
		State nonmember banks	State nonmember insured banks	9,013	7,853	7,347 (17,827)
			State nonmember noninsured banks	328	290	278 (111)
Total number of banks				14,763	13,516	12,672 (51,242)

As shown in Table 1, we may classify banks on the basis of three criteria, namely charter, Federal Reserve membership, and FDIC member­ship. First, under the dual system, a bank may be chartered by either a state or a federal agency. If it is chartered by a state agency, it is classified as a state bank. If it is chartered by a federal agency, the Office of the Comptroller of the Currency, it is a national bank. National banks must bear "national" in their names, indicating their national charter. With regard to Federal Reserve membership, all national banks are automatically members of the Federal Reserve System. However, Federal Reserve membership is not mandatory for state-chartered banks. Those state banks which join the System, subject to the approval of the Federal Reserve, are called state member banks, whereas those state banks which remain outside the System are termed state nonmember banks. The membership does not imply that these member banks directly participate in the central bank policy-making decisions but rather that they serve as loose instrumentalities of policy implementation. There are certain benefits of membership in the System such as (1) borrowing privilege from the Federal Reserve when a member bank is temporarily in need of liquidity, (2) use of the Federal Reserve facilities for collecting checks, settling clearing balances, and electronic funds transfers, (3) use of currency services, (4) use of infor­mation services, and (5) participation in electing six of the nine directors of the Federal Reserve Bank in their district. However, since 1980 all nonmember banks which are subject to the Federal Reserve reserve require­ments have also been accorded an equal access to the Federal Reserve services (items (1) through (4) above). There is therefore practically no difference between member and nonmember banks in terms of receiving Federal Reserve services. However, the main difference today lies in the regulatory jurisdictions. As for the third criterion, FDIC membership, all national banks and state member banks are automatically required to become members of the FDIC. On the other hand, state nonmember banks are not required to join the system. However, as shown in Table 1, a majority of state nonmember banks have membership in the FDIC. Such banks are classified as state nonmember insured banks. Therefore, the remainder of state banks constitute state nonmember noninsured banks. Although their deposits are not insured by the FDIC, many of them are covered by state insurance funds.

Comprehension questions:

1. What is the basis of banks classification in the USA?

2. What is the difference in the ways of chartering a bank under the dual system?

3. Is Federal Reserve membership mandatory for state-chartered banks?

4. What is the role of state member banks in Federal Reserve System?

5. What is the difference between state member and state nonmember banks?

6. What are the benefits of membership in the System?

7. Is there any difference between member and nonmember banks in terms of receiving Federal Reserve Services?