Finanse cz. 1 pt.2

Commercial banks

receive and hold customers’ deposits in current and savings accounts, pay money according to customers’ instructions, lend money to individuals and small businesses, etc.

Investment banks

give financial advice to large companies, raise capital for them by issuing stocks or shares and bonds, organize mergers and takeovers, etc.

Building societies

receive customers’ deposits and lend mortgages to buy homes (houses and flats)

Central bank

supervise the banking system, hold part of commercial banks’ reserves, implement monetary policy, fix the minimum interest rate, issue coins and banknotes, control the money supply, and act as lender of last resort.

Private banks

manage the assets of rich people (or high net worth individuals).

Clearing banks

pass cheques and other payments (credit card payments, direct debits, etc.) through the banking system.

Islamic banks

do not pay interest to depositors or charge interest to borrowers, for religious reasons, but invest in companies and share the companies’ profits (or losses) with the bank’s depositors.

Microfinance banks

provide financial services and make very small loans (microcredits) to poor people in developing countries, to help them set up in business.

Insurance companies

provide financial protection against loss, offer life insurance, etc.

Mutual funds or investment funds

are investment companies that pool money from many inventors and invest is in stocks, bonds, and other securities.

Hedge funds

are private investment funds for wealthy investors that use high-risk, speculative strategies that are not used by ordinary mutual funds, in order to achieve higher returns.

Lender of last resort

a bank that will lend money to financial institutions in difficulty if no other bank will.

shares

a certificate representing one unit of ownership of a company.

bons

an interest-paying debt certificate issued by the government or companies to raise money.

To implement monetary policy

decisions concerning the money supply, exchange rates, and the level of interest rates.

reserves

funds which banks have to hold to allow depositors to withdraw money.

capital

the money invested in a business.

interest

the price paid for borrowing money, paid to the lenders.

Money supply

the total amount of money in circulation in an economy.

To merge

when two or more companies join together.