1、Commercial BanksChapter 12Lead-inLanguage NotesKey PointsFollow-up Tasks12.112.312.212.4CONTENTSExtended Tasks12.512.1Lead-inThis chapter will first of all examine various aspectsaspects of commercial banks,including their definition,scale,structure,and compositiondefinition,scale,structure,and comp
2、osition.Then it will introduce the working mechanismworking mechanism in which a commercial bank creates money and makes money.Finally,it will introduce the regulations regulations of commercial banks in the USA.Commercial banks are financial institutions,which aim at making profits,raising funds wi
3、th various financial liabilities,dealing with various financial assets,and providing credit services.General commercial banks do not have the right to issue currency.12.2 Key Points12.2.1 Definition of Commercial Banks12.2 Key Points12.2.2 Size,Structure and Composition of the Banking Industry Small
4、 banks are often focused on the retail side of the business making loans to consumers and small companies or accepting deposits from them.By contrast,large banks,which are engaged in both retail and wholesale businesses,are often concentrated on the wholesale side of the business.In addition,large b
5、anks tend to pay higher salaries and invest more in buildings and premises than small banks do.They also tend to diversify their business and services resulting in more non-interest incomes.12.2 Key Points12.2.3 Working Mechanism of Commercial Banks In a fractional reserve banking system,commercial
6、banks are permitted to create money by allowing multiple claims to assets on deposit.Banks create credit that did not previously exist when they make loans.This is sometimes called the money multiplier effect.There is a limit to the amount of credit lending institutions can create this way.Banks are
7、 legally required to keep a certain minimum percentage of all deposit claims as liquid cash.This is called the reserve ratio.12.2 Key Points12.2.4 Regulations in the U.S.A.Federal Deposit Insurance CorporationOffice of the Comptroller of the Currency Federal Reserve System State Authorities U.S.bank
8、s may be subject to the supervision and regulations of four separate regulators.charter t:t(r)特许权 retail ri:tel 零售claim klem 请求权 evenue revnju:收入equity ekwti 权益 vault v:lt 保险库exponentially 指数地 wholesale hlsel 批发fractional frknl 部分的liquid lkwd 流动的liquidator lkwdet(r)清算者spread spred 价差receiver rsi:v(r
9、)接收者redemption rdempn 赎回regulate regjulet 监管12.3 Language NotesI.Wordsattract deposits bank run bills discounting certificates of deposit(CDs)checking account commercial bankingcore capitalcredit unions derivative securities equity capital financial assets12.3 Language NotesII.Phrases financial inst
10、itutionfinancial liabilitiesFederal Deposit Insurance Corporation(FDIC)Federal Reserve System(FRS)fractional reserve insurance premiums issue currency letters of credit loan commitments nit of account计量单位make loans middle business money multiplier effect mortgage loans mutual funds net interest inco
11、me non-interest incomes off-balance-sheet assets origination fee 12.3 Language NotesII.Phrases parent holding companiesreserve ratio return on asset(ROA)return on equity(ROE)savings accounts savings institutions state-chartered supervisory authorities US Treasury nit of account计量单位1.However,as effor
12、ts were made to eliminate the barriers to regional competition and expansion in the banking industry in the early and mid-2000s,the largest banks generally raised their return on equity(ROE)and return on asset(ROA)relative to small banks.2.In addition,when an insured bank is closed,the FDIC acts as
13、the receiver and liquidator,although the closure decision itself is technically made by the banks chartering or licensing agency.3.When too many depositors demand redemption of their cash titles,a bank run occurs.This is precisely what happened during the bank panic of 1907 and in the 1930s.12.3 Lan
14、guage NotesIII.Sentences 4.The amount of money earned by a commercial bank is determined by the spread between the interest it pays on deposits and the interest it earns on loans,which is known as net interest income.5.Because the holding companys management can influence decisions made by its subsi
15、diary bank and it will affect its risk exposure,the FRS regulates and examines bank holding companies as well as the banks themselves.12.3 Language NotesIII.Sentences 12.4 Follow-up TasksI.MatchingDirections:Match the English words and phrasesEnglish words and phrases in the leftleft column with the
16、 proper ChineseChinese equivalents in the rightright column.()1.business formationA.国家银行()mercial banksB.地方银行()3.deposit interest C.州政府监管的()4.national bank D.并购申请()5.investment institutionsE.商业结构()6.nationally chartered F.商业银行()7.loan interest G.存款利息()8.merger applications H.贷款利息()9.regional bank I.
17、国家监管的()10.state-chartered J.投资机构12.4 Follow-up TasksII.JudgmentsDirections:Decide whether each of the following statements is true(T)true(T)or false(F).1.Commercial banks are not savings institutions,but investment institutions.()2.Bank size plays an important role in the business activities and fin
18、ancial performance of commercial banks.()3.Large commercial banks are more capitalized than small ones.()4.The U.S.Treasury is the oldest bank regulatory agency in the United States.()5.Since 1980,all the U.S.banks must meet the same non-interest-bearing reserve requirements.()12.4 Follow-up TasksII
19、I.Short Answer Questions Directions:Answer each of the following questions brieflybriefly.1.What are the purposes of commercial banks?2.What are the business scopes of commercial banks?3.What are differences between small and big banks in terms of business scopes?4.How does a commercial bank create
20、money and make money?5.What benefits can an American bank enjoy when it becomes a member of the Federal Reserve System?12.4 Follow-up TasksIV.Translation Directions:Translate the following Chinese paragraph into Englishinto English.商业银行是一个以营利为目的，以多种金融负债筹集资金，多种金融资产为经营对象，具有信用创造功能的金融机构。一般的商业银行没有货币的发行权。
21、传统的商业银行的业务主要集中在经营存款和贷款（放款）业务，即以较低的利率借入存款，以较高的利率放出贷款，存贷款之间的利差就是商业银行的主要利润。商业银行的主要业务范围包括吸收公众、企业及机构的存款、发放贷款、票据贴现及中间业务等。商业银行只是储蓄机构，不是投资机构。Money talks.English proverbA bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.Robert FrostSurvive first and m
22、ake money afterwards.George SorosMoney makes the mare go.English proverbMoney,and not morality,is the principle of commercial nations.Thomas Jefferson12.5 Extended TasksI.Proverbs and Quotes12.5 Extended TasksII.Interview ExcerptRay Dalio is an American billionaire investor,hedge fund manager,and philanthropist.He is the founder of investment firm Bridgewater Associates,one of the worlds largest hedge funds.In this speech excerpt,Dalio talks about the holy grail of investing.12.5 Extended TasksIII.Movie ClipThis clip is a powerful speech,which contends that greed is good.Thanks
