Unit 12 BANKING GOVERNANCE

1. Unit 12 BANKING GOVERNANCE

2. Skills focus • Reading • understanding how ideas in a text are linked • Writing • deciding whether to use direct quotation or paraphrase • incorporating quotations • writing research reports • writing effective introductions/ conclusions • Vocabulary focus • verbs used to introduce ideas from other sources (X contends/suggests/asserts that …) • linking words/phrases conveying contrast (whereas), result (consequently), reasons (due to), etc. • words for quantities (a significant minority)

4. A Study the words and phrases in box a. 12.1 Vocabulary 1 Check the meaning, stress and pronunciation. 2 What part of speech is each word? accounta'bility (n, U) responsibility agreement, obedience com'pliance (n, U) relating to a big company (adj) 'corporate ex'plicit (adj) clear, exact fi'duciary standards trustworthiness with other people’s money (n, pl)

5. A Study the words and phrases in box a. 12.1 Vocabulary 1 Check the meaning, stress and pronunciation. 2 What part of speech is each word? im'plicit (adj) suggested moral principles in'tegrity (n, U) obedience (n, U) ob'servance pro'active (adj) taking action without being asked (n, C/U) pro'cedures set of agreed actions

6. A Study the words and phrases in box a. 12.1 Vocabulary 1 Check the meaning, stress and pronunciation. 2 What part of speech is each word? prolifer'ation (n, U) large increase, growth requirement pro'vision (n, C)

7. B Read text A on the opposite page. 12.1 Vocabulary 1 Replace the underlined words and phrases with a synonym from box b. 2 Check the meaning, stress, pronunciation, and part of speech of the words in the text. dys'function (n, U) problems controlled by 'subject to (adj) openness (n, U) tran'sparency 'govern (v, T) guide (n, pl) 'governance procedures rules

8. B Read text A on the opposite page. 12.1 Vocabulary 1 Replace the underlined words and phrases with a synonym from box b. 2 Check the meaning, stress, pronunciation, and part of speech of the words in the text. norms (n, pl) accepted practices develop gradually e'volve (v, T) dealt with (v, T) a'ddressed re'view (n, C) examination

9. B Read text A on the opposite page. 12.1 Vocabulary 3Link each highlighted item to its noun. Example: they refers to previously mentioned noun (banks) Because banks have the potential The Board of Directors and senior The Board of Directors and senior implement strong governance procedures identified and addressed annually The bank can do this a regular review of its corporate governance managers should carry out managers should carry out

10. B Read text A on the opposite page. 12.1 Vocabulary 3 Link each highlighted item to its noun. Example: they refers to previously mentioned noun (banks) managers should carry out an ‘internal audit’ managers should carry out

11. C Study the verbs in box c. They can be used to introduce quotations, paraphrases and summaries. 12.1 Vocabulary 1 Check the meanings of any words you don’t know. 2 Which verbs have similar meanings? See Vocabulary bank.

12. Introductory verbs Vocabulary bank Choosing the right introductory verb is important. Your choice of introductory verb shows what kind of statement the writer is making. Examples: Pickford (2006) suggests that employees should understand how the law ‘applies to their own functions’. Your choice of introductory verb also shows what you think of other writers’ ideas. This is an important part of academic work. Examples: Pickford (2006) claims that, in banking compliance, implicit and explicit rules must be followed.

13. Introductory verbs Vocabulary bank

14. Introductory verbs Vocabulary bank *suggest can have two meanings

15. C Study the verbs in box c. They can be used to introduce quotations, paraphrases and summaries. 12.1 Vocabulary 2 Which verbs have similar meanings? accept, agree, concede argue, assert, claim, contend, insist consider, note, observe, point out, state disagree, dispute illustrate, indicate, show

16. C Study the verbs in box c. They can be used to introduce quotations, paraphrases and summaries. 12.1 Vocabulary 3 Which verbs are not followed by that? 4 When can you use each verb? Example: accept = agree but with some reluctance; the idea is often followed by but

17. C Study the verbs in box c. They can be used to introduce quotations, paraphrases and summaries. 12.1 Vocabulary

18. C Study the verbs in box c. They can be used to introduce quotations, paraphrases and summaries. 12.1 Vocabulary

19. C Study the verbs in box c. They can be used to introduce quotations, paraphrases and summaries. 12.1 Vocabulary

20. D Read text B on the opposite page. Look at the highlighted sentences. 12.1 Vocabulary 1 What is the purpose of each sentence? Example: Employees … need to understand the specific provision of the law = opinion or recommendation. 2 In an assignment, should you refer to the highlighted sentences by quoting directly or paraphrasing? 3 Choose an appropriate introductory verb and write out each sentence as a direct quotation or a paraphrase. Add the source references. See Skills bank.

21. Skills bank Deciding when to quote and when to paraphrase • When referring to sources, you need to decide whether to quote directly or to paraphrase/summarize. • Quote when the writer’s words are special or show a particularly clever use of language. This is often the case with strongly stated definitions or opinions. • Paraphrase/summarize descriptions and factual information.

22. D Read text B on the opposite page. Look at the highlighted sentences. 12.1 Vocabulary Pickford (2006) points out that compliance has become a major responsibility for bank supervisors. giving an opinion quote directly giving an opinion that others may not agree with Pickford (2006) argues that, in banking compliance, implicit and explicit rules must be followed. paraphrase

23. D Read text B on the opposite page. Look at the highlighted sentences. 12.1 Vocabulary quoting from another writer; the other writer is making a strong statement quote the other writer directly Pickford (2006) cites Robinson, who insists that ‘senior management are responsible for ensuring … control processes are in place’. (Robinson, 2003). giving an opinion or recommendation paraphrase with a direct quotation Pickford (2006) suggests that employees should understand how the law ‘applies to their own functions’.

24. D Read text B on the opposite page. Look at the highlighted sentences. 12.1 Vocabulary giving an opinion that others may not agree with quote directly As Pickford (2006) contends, ‘This means anticipating the kinds of problems that, if not corrected, may lead to new compliance requirements.’ (p. 24).

25. E Look at the student notes on bank governance principles on the opposite page. 12.1 Vocabulary 1 Who should be responsible for creating a code of conduct? The board of directors, because it is the governing body representing the shareholders/owners of the bank. 2 What does best practice mean? The model way of accomplishing a task. 3 What does arm’s-length mean? A contract in which all parties are not connected in any way. 4 Who is responsible for defining risk areas? Management is responsible for defining risk areas.

26. F Read the AZA Bank internal memo above. How should the bank respond to the governance issues identified in the audit? For your answer, refer to the student notes in Exercise E. 12.1 Vocabulary Possible answers: Have a comprehensive code of conduct and ensure all staff receive training and understand it. Have bank policies and procedures that ensure all transactions are appropriately authorized and approved. Ensure the bank has appropriately trained and experienced staff to assess all new product risk, and to price products accordingly. Ensure product risk fits within the risk strategies set by the board of directors. Ensure that comprehensive procedures are prepared for granting loan extensions, and that appropriate authorization levels are set. Ensure rigorous internal checks are carried out on an ongoing basis.

27. 12.2 Reading A Discuss the following questions. 1 What risks do banks face when operating in other jurisdictions? Banks may face some of the following risks when operating in other countries: differences between cultures, varying structural models and public policies, different laws and regulations, different compliance rules. 2 Who should take responsibility when problems occur? The board of directors is ultimately responsible.

28. 12.2 Reading B Read the title of the article on the opposite page. What will the text be about? Write three questions to which you would like answers.

29. 12.2 Reading C Read the text. Does it answer your questions?

30. D For each paragraph: 1 Identify the topic sentence. 2 Think of a suitable title. 12.2 Reading In 2004, ABN AMRO signed a ‘written agreement’ with US regulatory authorities concerning its dollar clearing activities in New York. ABN AMRO’s compliance problems with US regulatory authorities ABN AMRO’s auditors identified violations of US regulations coming from its Dubai branch. Dubai branch violates US regulations ABN AMRO stopped these procedures once they were detected. the consequences of the violations compliance measures and Basel principles On top of the financial penalties, ABN AMRO was required to implement additional compliance measures. The ABN AMRO case has demonstrated that central banks and regulating agencies consider inadequate controls and serious noncompliance issues to be totally unacceptable. the risks of non-compliance

31. 12.2 Reading E Look at the underlined words in the text. What do they refer back to? ABN AMRO Libya and Iran employees at ABN AMRO’s Dubai branch had excluded or modified … information payment instructions ABN AMRO ABN AMRO the Basel principles non-complying banks

32. 12.2 Reading F Study the highlighted words and phrases. 1 What do they have in common? 2 What linking words can you use to show: contrast? concession? result? reason? See Vocabulary bank.

33. Linking ideas in a text Vocabulary bank Linking words, which join ideas within a sentence or between sentences, convey different meanings.

34. 12.2 Reading F Study the highlighted words and phrases. 1 What do they have in common? 2 What linking words can you use to show: contrast? concession? result? reason?

35. 12.2 Reading G Study the highlighted words and phrases. 2 What linking words can you use to show: contrast? concession? result? reason?

36. 12.2 Reading F Study the highlighted words and phrases. 3 Write the sentences with the highlighted items again, using other linking words with similar meanings.

37. G Read the sentences on the right. Number them 1–8 to show the order in which they happened. 12.2 Reading 5 7 2 4 8 6 3

38. 12.2 Reading H Read the text on the right. A student has written a summary of the first four paragraphs of the text about ABN AMRO but the quotations and paraphrases have not been correctly done. Can you spot the mistakes and correct them? See Skills bank.

39. Skills bank Incorporating quotations • Use an introductory verb. • Don’t forget the quotation marks. • Make the quote fit the grammar of the sentence. • Show any missing words with ‘...’. • Copy the original words exactly. • Add emphasis with italics and write [italics added].

40. H Read the text on the right. A student has written a summary of the first four paragraphs of the text about ABN AMRO but the quotations and paraphrases have not been correctly done. Can you spot the mistakes and correct them? 12.2 Reading Note the grammar here: either As Robins (2005) explains or Robins (2005) explains that but not both. This is a common mistake. As Robins (2005) explains, 1. The words which are the same as the original need quotation marks. 2. Because the word at is different from the original, it is put in square brackets. It is important that a quote is exactly the same as the original. Any changes need to be clearly shown. ‘ABN AMRO’s auditors identified violations of US regulations [at] its Dubai branch’.

41. H Read the text on the right. A student has written a summary of the first four paragraphs of the text about ABN AMRO but the quotations and paraphrases have not been correctly done. Can you spot the mistakes and correct them? 12.2 Reading It was not until after they signed a ‘written agreement’ with authorities in the US that the Dubai problems were found. Note that much of the text here has been paraphrased – which is the better option for information.

42. H Read the text on the right. A student has written a summary of the first four paragraphs of the text about ABN AMRO but the quotations and paraphrases have not been correctly done. Can you spot the mistakes and correct them? 12.2 Reading Robins (ibid.) further points out that 1. When continuing to refer to a source you can use further or also or other similar words; says is not a good choice of introductory verb since it is too informal. You do not need according to as well as a verb of saying. 2. When referring to the same place in the same source, use ibid. instead of the full source reference. If it is the same publication (but not the same place in the text), use op. cit.

43. H Read the text on the right. A student has written a summary of the first four paragraphs of the text about ABN AMRO but the quotations and paraphrases have not been correctly done. Can you spot the mistakes and correct them? 12.2 Reading ABN AMRO ‘voluntarily notified the US banking authorities’ [italics added] who then fined the Dutch bank US $75 million. 1. The words which are the same as the original need quotation marks. 2. If you want to emphasize a part of a quote, use italics and then put ‘[italics added]’ after the quote. 3. It is important to make a quotation fit the grammar of a sentence. Failing to do this properly is a common mistake.

44. I Write a paragraph for a university lecturer, summarizing ABN AMRO’s failure to comply with US banking regulations. Decide whether you should quote or paraphrase the material from the text. 12.2 Reading

45. A Study the words in box a. 1 Check the pronunciation and grammar. 2 What are their meanings in a research report? 12.3 Extending skills

46. A Study the words in box a. v do (some research, a survey, an experiment) pl n information; can be numerical (quantitative) or verbal (qualitative) 12.3 Extending skills n(U/C) the title of the section in a research report which discusses the findings The title of the section in a research report which details what has been found out; each finding should be linked with a research question. The title “results’ can also be used for this section. pl n possible effect or result of the findings n(C) n(C),v noun: when someone is asked questions in a survey; verb: to asksomeone questions in a survey n(C) the person being questioned n(C) the person asking the questions

47. A Study the words in the box. n(C) a problem with the research methods; an aspect which the research could not address 12.3 Extending skills n(C) Title of the section in a research report which explains how the research was carried out. In the plural it refers to the researchmethodsused. n(C) a written set of questions in no fixed order; with no organizing principle adj suggestion for action as a result of the findings of the research n(C) n(C) what the researcher wants to find out a person taking part in a questionnaire survey n(C)

48. A Study the words in the box. pl n same as findings;used more or less interchangeably n(C),v the group of people taking part in the research 12.3 Extending skills a type of research in which the researcher sets out to describe a situation or set of ideas or behaviours, by reading a variety of documents or asking people questions n(C),v v do (some research, a survey)

49. B Read the introduction to Report A and the conclusion to Report B, on the opposite page. 1 What methods were used in each piece of research? 12.3 Extending skills Report A: Probably a written survey and interviews. Report B: Probably a written questionnaire.

50. B Read the introduction to Report A and the conclusion to Report B, on the opposite page. 2 What are the elements of an introduction and a conclusion? 12.3 Extending skills See Skills bank.