TRƯỜNG ĐẠI HỌC NGOẠI THƯƠNG
KHOA TIẾNG ANH CHUYÊN NGÀNH
PHAN KIM THOA (Chủ biên)
English for
FINANCE AND BANKING
Tiếng Anh chuyên ngành
TÀI CHÍNH NGÂN HÀNG
NHÀ XUẤT BẢN LAO ĐỘNG
Hà Nội, 2021
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THAM GIA BIÊN SOẠN
Đặng Thị Mỹ Dung
Mai Hữu Hạnh
Nguyễn Thu Hương
Lê Thị Minh Tâm
Dương Thanh Thủy
Nguyễn Thị Hải Thúy
Tô Thùy Trang
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PREFACE
Hello and welcome to the ―English for Finance and Banking”!
This textbook is designed to meet the needs of students studying the majors
involving international banking and finance in terms of language. Each chapter of
this book contains six parts. The first part deals with different Terms, Theories
and Definitions about the topic of the chapter. These are essential for you to
imagine and road map the context that you are going to discover about.
The second part focuses on the Vocabulary issue with which you may find
helpful to read any piece of reading related to the topic in the chapter without
difficulty. This part also aims at enhancing your practical usage of vocabulary in
the real financial world.
The third part contains one or more Readings on the topic of the chapter.
These readings are originated from both theoretical issues and practical views
and articles. They are chosen to offer you a thorough and critical understanding
of the topic. The Reading Comprehension Exercises follows the readings in
this part.
The fourth part is Follow-up exercises to revise all the issues being discussed
in the previous parts. The fifth part - Extension Activities- gives you some
extending activities to work in a group which are mainly conducted in the form
of speaking practice. And the final part gives topics for essay writing.
Naturally, it is advisable to follow these parts of each chapter in its designed
structure. You certainly may find certain concepts, ideas and theories more
familiar than others depending on the background you have accumulated from
other courses of your major at your university. However, the textbook is
designed to also provide readers of different backgrounds with essential language
tools to survive in the financial world. From that perspective, we hope that you
find the textbook a valuable tool in helping you enhance your English language
capability in your finance - related profession.
The authors thank all those who contributed to this textbook during its
preparation, especially the lecturers from Faculty of Banking and Finance, FTU
for their editorial comments on this edition.
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ABOUT THE COURSE
This course provides students with opportunities to learn the basic concepts
of different areas of financial business, including international finance and
banking . To that end, students will be able to build up a substantial reservoir of
banking and financial vocabulary throughout the course with reading, discussion
and other practices.
The ―English for Finance and Banking‖ is for students of English anywhere
in general and for the fourth-year students of the Foreign Trade University in
particular whose primary reason in learning English is for the purpose of
conducting business and finance. Many of them will find this book useful for
learning business and financial terminology and concepts. This is to help them
operate more effectively their business dealings in the international marketplace
where communication is mostly conducted in English. The course is organized as
two classes per week, for 10 weeks in total, incorporating instructions and
various practices such as group-work, discussion, and group presentations and
essay writing on a professional topic.
The course emphasizes several skills which students need to develop if they
are to conduct business and finance in English. There are also different types of
vocabulary exercises. Emphasis is placed on developing the ability to learn
meaning from context. Reading exercises give an overview of a particular topic,
introduce key business, financial and economic concepts and teach students to
grasp what has been said by analyzing the passage to find the main ideas, to note
details, and to make inferences. Writing exercises given by the teacher during the
study are included in order to help students develop and express their own
thoughts or opinions about a topic- related to the lesson. There are also additional
proposals for debates, discussion or group presentations to enable students to use
orally some of the words and ideas that have been learned in the course of the unit.
The variety and scope of the exercises, together with the information given in the
reading selections, should further develop both English language skills and student
comprehension of the basic elements of finance and banking. This book not only
provides a good foundation for students to continue a more specialized study in the
field but also illustrates techniques that shall be useful to the professionals in
understanding and writing up presentations in the world of business and finance.
Students are expected to actively participate and contribute in each class. For
each class students should:
 Prepare the topic and/or the handouts BEFORE the class
 Participate in class activities
 Do assignments.
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TABLE OF CONTENTS
Unit 1. Introduction ............................................................................................ 7
Unit 2. Time value of moneys ............................................................................12
Unit 3. Interest rates ...........................................................................................31
Unit 4. Financial statements .............................................................................40
Unit 5. Risks and returns ..................................................................................57
Unit 6. Financial markets...................................................................................72
Unit 7. Financial institutions ............................................................................84
Unit 8. Mergers and acquisitions ................................................................... 115
Unit 9. Banking ............................................................................................... 127
Unit 10. Payment methods in international trade ........................................ 139
Compiled from ................................................................................................. 151
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Unit 1
INTRODUCTION
Why Study Financial Markets?
Financial markets-markets in which funds are transferred from people who
have an excess of available funds to people who have a shortage. Financial
markets, such as bond and stock markets, are crucial to promoting greater
economic efficiency by channeling funds from people who do not have a
productive use for them to those who do. Well-functioning financial markets are a
key factor in producing high economic growth, and poorly-performing financial
markets are one reason that many countries in the world remain desperately poor.
Activities in financial markets also have a direct effect on personal wealth, the
behavior of businesses and consumers, and the cyclical performance of the
economy.
Why Study Financial Institutions and Banking?
Financial institutions and the business of banking- Banks and other financial
institutions are what make financial markets work. Without them, financial
markets would not be able to move funds from people who save to people who
have productive investment opportunities. Thus financial institutions play a
crucial role in the economy.
Structure of the Financial System
The financial system is complex, comprising many different types of private
sector financial institutions, including banks, insurance companies, mutual funds,
finance companies, and investment banks, all of which are heavily regulated by the
government. If an individual wanted to make a loan to IBM or General Motors, for
example, he or she would not go directly to the president of the company and offer
a loan. Instead, he or she would lend to such a company indirectly through
financial intermediaries, which are institutions that borrow funds from people who
have saved and in turn make loans to people who need funds.
Why are financial intermediaries so crucial to well-functioning financial
markets? Why do they extend credit to one party but not to another? Why do they
usually write complicated legal documents when they extend loans? Why are
they the most heavily regulated businesses in the economy?
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Banks and Other Financial Institutions
Banks are financial institutions that accept deposits and make loans. The term
banks include firms such as commercial banks, savings and loan associations,
mutual savings banks, and credit unions. Banks are the financial intermediaries
that the average person interacts with most frequently.
A person who needs a loan to buy a house or a car usually obtains it from a
local bank. Most Americans keep a large portion of their financial wealth in
banks in the form of checking accounts, savings accounts, or other types of bank
deposits. Because banks are the largest financial intermediaries in our economy,
they deserve the most careful study. However, banks are not the only important
financial institutions. Indeed, in recent years, other financial institutions, such as
insurance companies, finance companies, pension funds, mutual funds, and
investment banks, have been growing at the expense of banks, so we need to
study them as well.
Why Study Money and Monetary Policy
Money, also referred to as the money supply, is defined as anything that is
generally accepted as payment for goods or services or in the repayment of debts.
Money is linked to changes in economic variables that affect all of us and are
important to the health of the economy.
Money and Inflation
The movie you paid $10 to see last week would have set you back only a dollar
or two thirty years ago. In fact, for $10, you probably could have had dinner, seen
the movie, and bought yourself a big bucket of hot buttered popcorn. The average
price of goods and services in an economy is called the aggregate price level or,
more simply, the price level. It is generally regarded as an important problem to be
solved and is often at the top of political and policymaking agendas. To solve the
inflation problem, we need to know something about its causes.
What explains inflation? As we can see, the price level and the money supply
generally rise together. The continuing increase in the money supply might be an
important factor in causing the continuing increase in the price level that we call
inflation. Inflation may be tied to continuing increases in the money supply,
which plots the average inflation rate (the rate of change of the price level,
usually measured as a percentage change per year).
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Money and Interest Rates
In addition to other factors, money plays an important role in interest-rate
fluctuations, which are of great concern to businesses and consumers.
Example: As the money growth rate rose in the 1960s and 1970s, the longterm bond rate rose with it. However, the relationship between money growth
and interest rates has been less clear-cut since 1980.
How We Will Study Money, Banking, and Financial Markets
The study of money, banking, and financial markets is an exciting field that
directly affects your life. Interest rates influence the earnings you make on your
savings and the payments on loans you may seek for a car or a house, and
monetary policy may affect your job prospects and the prices you will pay for
goods in the future. Your study of money, banking, and financial markets will
introduce you to many of the controversies related to economic policy that are
hotly debated in the political arena, and will help you gain a clearer understanding
of the economic phenomena you hear about in the news media. The knowledge
you gain will stay with you and benefit you long after this course is over.
VOCABULARY
Exercise 1: Fill in a blank with the most suitable word:
Bonds
Capital
deposit
merger
mortgage
pension
sharestakeover
stocks
1. A _______________ is a loan to buy property.
2. Money you put in the bank is called a _______________
3. Money paid to a retired person is called a _______________
4. Securities representing part-ownership of a company are called_________
5. The money invested in a business is its _______________
6. _______________ are interest-paying securities issued by companies that
need to borrow money.
7. A _______________ is when a company gains control of another one by
putting its stocks.
8. A ______________ is when two formerly separated company join together.
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Write your answer here:
1.
2.
3.
4.
5.
6.
7.
8.
Exercise 2: Matching the terms with their definitions
1. conglomerates
a. abolished or ended rules and restrictions
2. depositors
b. sum of money paid as penalties for breaking the law
3. deregulated
c. groups of companies that have joined together
4. fines
d. control of something by rules or laws
5. prohibited
6. regulation
e. guaranteeing to buy a company‘s newly issued stocks
if no one else does
7. repealed
f. made it illegal to do something
8. underwriting
g. people who place money in bank accounts
h. cancelled or ended (a law)
Write your answer here:
1.
2.
3.
4.
5.
6.
7.
8.
Exercise 3: Read the article, and complete it using the words (1-8) in
Exercise 2
Regulation and deregulation
In the late 1920s, several American commercial banks that were (1)
_______________ security issues for companies weren‘t able to sell the stocks to
the public, because there wasn‘t enough demand. So they used money belonging
to their (2) _______________ to buy securities. If the stock price later fell, their
customers lost a lot of money.
This led government to step up the (3) _______________ of banks, to protect
depositors ‗funds, and to maintain investors‘ confidence in the banking system.
In 1933 the Glass-Steagall Act was passed, which (4) _______________
American commercial banks from underwriting securities. Only investment
banks could issue stocks for corporations. In Britain too, retail or commercial
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banks remained separate from investment or merchant banks. A similar law was
passed in Japan after World War II.
Half a century later, in the 1980s and 90s, many banks were looking for new
markets and higher profits in a period of increasing globalization. So most
industrialized countries (5) _______________ their financial systems. The GlassSteagall Act was (6) _______________ . A lot of commercial banks merged with
or acquired investment banks and insurance companies, which created large
financial (7) _______________. The larger American and British banks now
offer customers a complete range of financial service, as the universal banks in
Germany and Switzerland have done for a long time. The law forbidding US
commercial banks from operating in more than one state was also abolished. In
Britain, many building societies, which specialized in mortgages, started to offer
the same services as commercial banks.
Yet in al countries, financial institutions, are still quite strictly controlled,
either by the central bank or another financial authority. In 2002, ten of Wall
Street‘s biggest banks paid (8) _______________ of $1.4 billion for having
advised investors, in the 1990s, to buy stocks in companies that they knew had
financial difficulties. They had done this in order to get investment banking
business from these companies - exactly the kind of practice that led the US
government to separate commercial and investment banking in the 1930s.
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