Financial English

1. Financial English Guy Thistlethwaite 12th June 2012

2. Financial English • Aims • To build your vocabulary through reading and discussion • To develop your comprehension of financial texts • To improve your speaking through discussion, case studies and role plays

3. Regulation and deregulation – The banking industry 1 conglomerates a abolished or ended rules and restrictions 2 depositors b sums 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 e guaranteeing to buy a company's newly issued stocks if no one else does 6 regulation f made it illegal to do something 7 repealed g people who place money in bank accounts 8 underwriting h cancelled or ended (a law)

4. Regulation and deregulation – The banking industry 1 conglomerates c groups of companies that have joined together 2 depositors g people who place money in bank accounts 3 deregulated a abolished or ended rules and restrictions 4 fines b sums of money paid as penalties for breaking the law 5 prohibited f made it illegal to do something 6 regulation d control of something by rules or laws 7 repealed h cancelled or ended (a law) 8 underwriting e guaranteeing to buy a company's newly issued stocks if no one else does

5. Put these sentences on a time-line • Major US banks were fined for giving bad advice to investors • Commercial banks used their investors’ money to buy securities and many depositors lost money • Many banking regulations were ended and big financial conglomerates were formed • New laws in the US and Britain separated commercial and investment banks

6. Time-line 1900 2000

7. Time-line 1900 2000 a 2002 c 1980s-1990s b 1920s d 1930s

8. True or false? • The Glass-Steagall Act was the result of the behaviour of investment banks • The British and American Financial markets are now completely unregulated • German and Swiss banks did all types of banking business at a time when American and British ones were not allowed to • During the 20th century, many financial markets first became more regulated, and then less regulated • Large American banks do no longer do the kind of things that led to the separation of invesment and commercial banking in the 1930s

9. Accounting A patient was at her doctor's office after undergoing a complete physical exam. The doctor said, "I have some very grave news for you. You only have six months to live." The patient asked, "Oh doctor, what should I do?" The doctor replied, "Marry an accountant." "Will that make me live longer?" asked the patient. "No," said the doctor, "but it will SEEM longer."

11. Accounting assets cost accounting income tax accounting financial accounting expenditure liabilities bookkeeping management accounting auditing

12. Accounting 1. assets 2. tax accounting 3. auditing 4. cost accounting 5. financial accounting 6. liabilities 7. bookkeeping 8. Income 9. expenditure 10. management accounting

13. Financial statements 1 A charge for arranging a transaction [e.g. buying or selling securities] a commission b fee c tax 2 A charge for a service performed by a bank a commission b fee c tax 3 Payments for an insurance policy a commissions b premiums c tariffs 4 A reduction in the value of an asset, charged against profits a amortization b loss c waste 5 Adjective meaning after all deductions have been made a gross b net c zero

14. Financial statements 1 A charge for arranging a transaction [e.g. buying or selling securities] a commission b fee c tax 2 A charge for a service performed by a bank a commission b fee c tax 3 Payments for an insurance policy a commissions b premiums c tariffs 4 A reduction in the value of an asset, charged against profits a amortization b loss c waste 5 Adjective meaning after all deductions have been made a gross b net c zero

15. Financial statements 6 Adjective meaning for a whole group of companies a consolidated b corporate c mutual 7 Adjective meaning one year or less in financial statements a annual b long-term c short-term 8 Part-ownership [less than 50%) of other companies a conglomeration b liabilities c minority interests 9 Things of value that cannot be physically touched, such as reputation (goodwill], brand names and trademarks a intangible assets b liabilities c tangible assets 10 The net worth of a company - the amount by which assets exceed liabilities a dividends b profit c shareholders' equity

16. Financial statements 6 Adjective meaning for a whole group of companies a consolidated b corporate c mutual 7 Adjective meaning one year or less in financial statements a annual b long-term c short-term 8 Part-ownership [less than 50%) of other companies a conglomeration b liabilities c minority interests 9 Things of value that cannot be physically touched, such as reputation (goodwill], brand names and trademarks a intangible assets b liabilities c tangible assets 10 The net worth of a company - the amount by which assets exceed liabilities a dividends b profit c shareholders' equity

19. Numbers

20. Financing International Trade Discuss the following in small groups: • What are your country's main exports? • What are your country's main imports? • Which countries or regions are your country's major trading partners? • What are the most common ways for importers to pay exporters for goods?

21. España! • Spain major imports are machinery and equipment, fuels, chemicals, semi-finished goods, foodstuffs and consumer goods. Its principal import partners are European Union countries (Germany, France, Italy, UK, Netherlands) and China • Spain major exports are: machinery, motor vehicles, fuels, chemicals, and semi-finished goods and foodstuffs. Spain is also the third largest wine exporter in the world. The EU accounts for 70 percent of Spain's exports, the most important trading partners being France and Germany.

22. How a letter of credit works The advising bank authenticates the letter of credit and sends the beneficiary (the seller) the details. The seller examines the details of the letter of credit to make sure that he or she can meet all the conditions. If necessary, he or she contacts the buyer and asks for amendments to be made. The applicant (the buyer) completes a contract with the seller. The issuing bank (the buyer's bank) approves the application and sends the letter of credit details to the seller's bank (the advising bank]. The buyer fills in a letter of credit application form and sends it to his or her bank for approval.

23. How a letter of credit works 1. The applicant (the buyer) completes a contract with the seller. 2. The buyer fills in a letter of credit application form and sends it to his or her bank for approval. 3. The issuing bank (the buyer's bank) approves the application and sends the letter of credit details to the seller's bank (the advising bank). 4. The advising bank authenticates the letter of credit and sends the beneficiary (the seller) the details. The seller examines the details of the letter of credit to make sure that he or she can meet all the conditions. If necessary, he or she contacts the buyer and asks for amendments to be made.

24. How a letter of credit works 5. When the seller [beneficiary] is satisfied with the conditions of the letter of credit, he or she ships the goods. 6. The seller presents the documents to his or her bankers [the advising bank]. The advising bank examines these documents against the details on the letter of credit and the International Chamber of Commerce rules. 7. If the documents are in order, the advising bank sends them to the issuing bank for payment or acceptance. If the details are not correct, the advising bank tells the seller and waits for corrected documents or further instructions. 8. The issuing bank [the buyer's bank] examines the documents from the advising bank. If they are in order, the bank releases the documents to the buyer, pays the money promised or agrees to pay it in the future, and advises the buyer about the payment. [If the details are not correct, the issuing bank contacts the buyer for authorization to pay or accept the documents.] The buyer collects the goods. 9. The issuing bank advises the advising [or confirming] bank that the payment has been made. 10. The advising/confirming bank pays the seller and notifies him or her that the payment has been made.