Témakör 6 1

Téma 1

Types of Banks
Central banking

The Bank of England as the country's central bank plays the major role in controlling the
British monetary system and it is at the hub of most banking activity. The Bank of England is
controlled by a court of directors appointed by the state. This court consists of a governor, a
deputy governor and sixteen directors.

Functions of the Central Bank:

 It is the government's bank. It manages the government's banking accounts, for
example for the Exchequer and other government departments.
 It advises the government on formulation of monetary policy and assists the
government in carrying out the monetary policy.
 It handles the arrangements for government borrowing: short- term: through the sale
of Treasury Bills, and long-term: management of government stocks
 It manages the exchange equalisation account and through this the Bank can influence
the value of sterling by selling or buying pounds to affect foreign exchange market
prices.
 It controls the note issue: The Bank has the sole responsibility for the issue of bank
notes in England and Wales.
 It is the bankers' bank: Each of the clearing banks has an account with the Bank. The
clearing banks keep about the half of their liquid reserves deposited at the Bank (short
call money) and use these for settling debts among themselves. The commercial banks
rely on the Bank if they run short of money or require loan.
 It has international responsibilities: The Bank provides services for other central
banks and for example for the IMF.
 It is the lender of last resort: If the commercial banks run short of cash they recall
deposits they have in the money market. This leaves the discount houses short of
funds, but The Bank 'lends as last resort' to the discount houses at a higher rate of
interest.

Other banks and financial institutions:

Discount houses:
 They accept very short-term deposits in return for a low rate of interest
 They use funds to purchase a variety of assets, e.g. treasury bills, bills of exchange
and guilt-edged securities
 They provide immediate finance for companies by discounting reliable bills of
exchange = they buy them for less then their face value and resell them and charge a
higher rate of discount to achieve a profit

Clearing banks:
 They accept deposits of money
 They provide a system of payments mechanism
 They provide a wide range of services
 They handle the exchange and settlement of cheques
Témakör 6 2
Téma 1

Trustee Savings Bank (TSB)

It is a fully fledged bank that offers a variety of services similar to the other clearing banks:
current, deposit, savings and investment account, credit transfer facilities, overdrafts,
personal and mortgage loans, combined credit and cheque guarantee card, travel cheques and
foreign currency.

State banks

The National Savings Bank operated through the Post office

The National Girobank: financially independent from the Post Office

Merchant banks

They are private firms that offer highly specialised services almost exclusively for business
customers. Their main activities:
 Acceptance house activities: they lend their name to a bill of exchange issued by less
well-known traders, so that it becomes more acceptable because of the bank's good
reputation. They confirm the buyer’s ability to pay for the product
 Issuing house activities: they sponsor first issues of companies' shares , and they are
intermediaries between companies seeking capital and those willing to provide it.
 Capital market activities: they accept larger deposits, provide finance for hire-
purchase, advise on company problems such as capital reorganisations, offer
consultancy services etc.

Foreign banks

There area bout 400 foreign banks in London. They provide services and credit to companies
from their own countries operating in Britain, but some of them make substantial sterling
loans to British borrowers, too.

Banking in the USA

In 1913, the Congress established the Federal Reserve System and required all national banks
to belong to this system. State banks were invited to join and many did. Now most American
banks belong to the FRS, which regulates banking in America.

The nation is divided into 12 Federal Reserve Districts. There is one Federal Reserve Bank in
each district. They operate under the centralised control of the Federal Reserve Board in
Washington. It consists of 7 members appointed by the President and approved by the Senate
for a 14-year term. This Board makes most of the major decisions for FRS.

The Federal Reserve Banks do not business with individuals or business firms. They serve
only the Federal Government and the members banks of FRS.

The Federal Reserve Banks serve two main purposes:

 The Federal Government uses them to handle its own banking needs. The Federal
Reserve Banks also handle the sale of bonds issued by the US Administration
 The Federal Reserve Banks provide important services to the member banks. Member
banks are required by law to set aside a part of their depositors' money . This is called
Témakör 6 3
Téma 1

their reserve and each bank must deposit its reserve in the FRB that serves its Federal
Reserve District.

Vocabulary

Deposit betét (bank témakörben), de lehet letét is

Treasury bill Kincstárjegy
Gilt-edged securities Biztonságos államkötvények
Bill of exchange Idegenváltó; váltó = feltétel nélküli fizetési
felszólítás, amit vki aláírásával kiállít vki
másnak; a címzettet arra utasítja, hogy
meghatározott időben fizessen ki egy adott
összeget vagy egy bizonyos személy
számára, vagy a dokumentum
bemutatójának.
To discount a bill of exchange váltót leszámítolni, diszkontálni
Clearing Banks klíring bankok, zsíró bankok = olyan
bankok, melyek tagjai a London Bankers
Clearing Bank Association-nek, mely
lehetővé teszi a csekk- és készpénzforgalom
elszámolását Angliában
Savings bank takarékpénztár

Overdraft számlahitel, hiteltúllépés = folyószámla-

hitel, meghatározott határértékig változó
összeggel
To buy on the hire-purchase system részletre vásárol
Acceptance house/ accepting house váltóbank; olyan pénzintézet, melynek
tevékenységei közé tartozik a váltók
értékesítése akár elfogadással, akár
garanciával. Valójában garantálja az áruk
vásárlójának vagy importőrének pénzügyi
helyzetét azzal, hogy vállalja a
váltókötelezettséget, azaz aláírásával
igazolja, megerősíti, hogy a vevő illetve az
importőr az árut ki tudja fizetni
Issuing house kibocsátóház; olyan pénzintézet, mely a
vállalatok tőzsdei bevezetésében, illetve
részvényeik kihelyezésében és a
tőkenövekedést célzó további tranzakciók
lebonyolításában segédkezik
Merchant bank szakosodott kereskedelmi bank