Lector univ. dr. ANDREI NICULESCU

LIMBA ENGLEZĂ 2 Curs în tehnologie ID-IFR

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Descrierea CIP a Bibliotecii Naţionale a României Limba engleză 2/Curs în tehnologie ID-IFR/ Andrei Niculescu - Bucureşti, Editura Fundaţiei

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UNIVERSITATEA SPIRU HARET FACULTATEA DE MANAGEMENT FINANCIAR CONTABIL BUCUREŞTI

PROGRAMUL DE STUDII UNIVERSITARE DE LICENŢĂ: MANAGEMENT

Lector univ. dr. ANDREI NICULESCU

LIMBA ENGLEZĂ 2 – Curs în tehnologie ID-IFR –

Realizator curs în tehnologie ID-IFR

Lector univ. dr. ANDREI NICULESCU

EDITURA FUNDAŢIEI ROMÂNIA DE MÂINE Bucureşti, 2014

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CONTENT

ARGUMENT Unitatea de învăţare 1

HISTORY OF BANKING Learning Units: Why do banks exist?/ Banking Act/ The differences between the functions of banks today/ Modern banks Unitatea de învăţare 2

THE EUROPEAN UNION Learning Units: The European Investment Bank, The European System of Central Banks / The European Central Bank / The Court of Auditors Unitatea de învăţare 3 FUNCTION AND STRUCTURE OF A BANK(2) Learning Units: Merchant banks/ The banking industry today/ A brief history of bank notes Unitatea de învăţare 4 MONEY Learning Units: General functions/ History of Euro/ The Euro- a European adventure/ The Euromarkets Unitatea de învăţare 5 ACCOUNTS Learning Units: Current accounts, deposit accounts/ Opening a deposit account/ Banking business

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Unitatea de învăţare 6 FOREIGN EXCHANGE Learning Units: The foreign exchange market/ Foreign exchange market basics/ A country's currency Unitatea de învăţare 7 LOANS Learning Units: The history of loans/ Modern banking loans Unitatea de învăţare 8 INVESTMENT Learning Units: Investment / Investment related to business of a firm - business management

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1. ARGUMENT : "Those who know nothing of foreign languages, knows nothing of their own." - Johann Wolfgang von Goethe Intercultural understanding begins with individuals who have language abilities and who can thereby provide one's own nation or community with an insider's view into foreign cultures, who can understand foreign news sources, and give insights into other perspectives on international situations and current events. For survival in the global community, every nation needs such individuals. A person competent in other languages can bridge the gap between cultures, contribute to international diplomacy, promote national security and world peace, and successfully engage in international trade. As globalization and mobility and communications are bringing the world ever closer together, ever more urgent is the need for global citizens to be competent in other languages. If businesses are to effectively compete in a global economy, they must learn to deal with other cultures on their own terms. Companies that plan to do business abroad therefore have a dire need for bilingual or multilingual employees. Businesses that intend to compete internationally need employees who can competently communicate in the locales where they do business. Employees who speak one language can communicate only with people who speak that same language. Business is not the only area of employment where language competencies are needed, however. Multiple government agencies, the travel industry, engineering, communications, the field of education, international law, economics, public policy, publishing, advertising, entertainment, scientific research, and an broad array of service sectors all have needs for people with foreign language skills. Whatever your career goals, knowing a language certainly won't hurt your employability. Chances are that knowing languages will open up employment opportunities that you would not have had otherwise. And you will be able to command a greater salary in the workplace. All else being equal, knowing languages gives you an edge over monolingual applicants competing for the same jobs.

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2. COMPETENŢE SPECIFICE CURSULUI PRACTIC DE LIMBA ENGLEZĂ

1. Cunoaştere, înţelegere, explicare şi interpretare - dezvoltarea celor 4 competenţe lingvistice: intelegerea textului, redactare (eseuri, comentarii, scrisori etc), comunicare verbala, inţelegere orală; - adaptarea noţiunilor dobândite la limbajul specific profilului nefilologic. 2. Instrumental-aplicative - abilităţi analitice de culegere şi procesare a datelor lingvistice şi paralingvistice şi interpretarea lor din perspectivă culturală şi interculturală; - elaborarea unor fişe de lucru personale; - elaborarea de portofolii cu tematică dată; - e-learning.

Competenţe specifice cursului practic de limba engleză

3. Atitudinale - valorificarea optimă şi creativă a competenţelor de cunoaştere şi înţelegere a structurilor predate; - cultivarea creativităţii în aplicarea competenţelor lingvistice dobândite; - promovarea unor atitudini educaţionale centrate pe valori şi principii în practicile finanţelor internaţionale;. - manifestarea unei atitudini deschise faţă de colaborarea cu alţi factori externi (comunitatea locală, instituţii europene etc.); - participarea la formarea proprie a carierei în concordanţă cu specializarea urmată.

3. ABILITĂŢI DOBÂNDITE DE STUDENT DUPĂ PARCURGEREA CURSULUI PRACTIC DE LIMBA ENGLEZĂ

Cursul urmăreşte să sporească abilităţile cursanţilor de a comunica în limba engleză furnizând următoarele: - cunoştinţe de vocabular axate pe o anumită topică (banca, bursa de mărfuri, cursul valutar, banii etc); - la sfârşitul cursului cursanţii vor putea citi fără dificultăţi de pronunţie şi înţelegere un articol de ziar în limba engleză sau un text de economie ( financiar) accesibil. Întreg suportul de curs este bazat texte extrase din presa britanică; - în ceea ce priveşte scrisul, orice cursant va putea în final să redacteze în limba engleză o scrisoare de afaceri, un contract în şi din limba engleză; - nivel european B1 sau B2

4. BIBLIOGRAFIE OBLIGATORIE:

a. Barbu Adina, Chirimbu Sebastian ( 2007) : English Language for Daily Use, Editura Fundaţiei România de Mâine, Bucureşti

b. Niculescu Andrei (coordonator) (2007): The Language of Business, Editura Fundaţiei România de Mâine, Bucureşti

c. Bondrea Emilia, Mihăilă Ramona (coord.), Chirimbu Sebastian (co-autor) (2009): Aspecte ale civilizaţiilor europene, Editura Fundaţiei România de Mâine, Bucureşti

d. Vasilescu Ruxandra (coord.) (2008): Dicţionar de termeni economici român-englez-francez-spaniol , Editura Polirom, Iaşi

UNITATEA DE ÎNVĂŢARE 1

HISTORY OF BANKING Learning Units:

Why do banks exist?/ Banking Act/ The differences between the functions of banks today/ Modern banks

1.Introducere Banks are obviously one of the fundamental economic institutions of capitalism and modern industrial society. From their beginnings in the transition from the Middle Ages to the modern world, they have been the repositories of wealth, and lenders who provide the fuel for economic activity. 2.Competenţele specifice disciplinei (subsumate prezentei teme/unităţi de învăţare) - Dezvoltarea celor patru competenţe lingvistice: înţelegerea textului, redactare (comentarii, scrisori, eseuri etc.), comunicare verbală, înţelegere orală; - Elaborarea unor fişe de lucru personale, elaborarea unor portofolii cu tematică dată; - Cultivarea creativităţii în aplicara competenţelor lingvistice dobândite; - Adaptarea noţiunilor dobândite la limbajul specific profilul nefilologie (financiar-bancar); - Valorificarea optimă şi creativă a competenţelor lingvistice dobândite; - Realizarea de interacţiuni în comunicarea orală sau scrisă în limba engleză. 3.Timpul alocat Timpul alocat parcurgerii temei în cadrul cursului practic de limba engleză: 2h 4.Conţinutul temei 1 Exploatarea limbii engleze pe baza textelor didactice din bibliografia obligatorie (propuse pe grade de dificultate). Exploatarea limbii se va face prin intermediul discuţiilor, dezbaterilor, lucrului în grup şi individual precum şi a exerciţiilor.

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4.1Banks are obviously one of the fundamental economic institutions of capitalism and modern industrial society. From their beginnings in the transition from the Middle Ages to the modern world, they have been the repositories of wealth, and lenders who provide the fuel for economic activity. The earliest clients of the Renaissance banks were the nobility and royalty of Europe. Commoners had no access to these financial institutions. But the kings of Europe needed loans from these banks to fund their military activities. And these military activities were aimed at conquest, with the wealth it brings. The history of Europe is littered with bankrupt kings who borrowed from banks to fund their military adventures. The other main clients of the early banks were the large trading houses, the biggest merchants of their day. And it is no coincidence that their trading clients wanted and needed the protection of kings and their navies, and the potential expansion opportunities afforded by kings with their armies. Later, with the expansion of the middle class and the emergence of the modern world in the Industrial Revolution, prosperous middle class people began to have the income and the status that gained them access to the banks, albeit on a much smaller scale than had been true for kings and nobles. And the banks found that lending to these people was profitable -- and indeed, keeping this emerging class in debt was a way of limiting their upward mobility. But it should be remembered that among the earliest functions of banks was the funding of wars. Moreover, this dual role of banks -- as the funder and the profiteer from war -- continued as the modern nation-state gradually replaced kings and nobles as the primary makers

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of war. The role of banks in economic society has increased dramatically since their inception, and now banks won -- or "hold the mortgage" on -- most of the major economic institutions of modern society. 4.2 Banking in the United Kingdom can be considered to have started in the Kingdom of England in the 17th century. The first activity in what later came to be known as banking was by goldsmiths who, after the dissolution of English monasteries by Henry VIII, began to accumulate significant stocks of gold. 17th Century Many goldsmiths were associated with The Crown but, following seizure of gold held at the Royal Mint in the Tower of London by Charles I, they extended their services to gentry and aristocracy as the Royal Mint was no longer considered a safe place to keep gold. Goldsmiths came to be known as ‘keepers of running cash’ and they accepted gold in exchange for a receipt as well as accepting written instructions to pay back, even to third parties. This instruction was the forerunner to the modern banknote or cheque. Around 1650, a cloth merchant, Thomas Smith opened the first provincial bank in Nottingham. The Bank of England was created in 1694. The Governor and Company of the Bank of Scotland was established by an Act of the Parliament of Scotland on 17 July 1695, the Act for erecting a Bank in Scotland, opening for business in February 1696. Although established soon after the Bank of England, the Bank of Scotland was a very different institution. Where the Bank of England was established specifically to finance defence spending by the English government, the Bank of Scotland was established by the Scottish government to support Scottish business, and was prohibited from lending to the government without parliamentary approval [1]. The founding Act granted the bank a monopoly on public banking in Scotland for 21 years, permitted the bank's directors to raise a nominal capital of £1,200,000 Pound Scots (£100,000 Pound Sterling), gave the Proprietors (shareholders) limited liability, and in the final clause (repealed only in 1920) made all foreign-born Proprietors naturalised Scotsmen "to all Intents and Purposes whatsoever". John Holland an Englishman was one of the bank's founders. Its first chief accountant was George Watson.

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18th century During this period, services offered by banks increased. Clearing facilities, security investments and overdraft protections were introduced. An Act of Parliament in 1708 restricted banks with more than six partners from issuing bank notes. This had the effect of keeping private banks as small partnerships. Joint stock investment companies were already well established, but joint stock banks did not become well established until the following century. The Industrial Revolution and growing international trade increased the number of banks, especially in London. These new "merchant banks" facilitated trade growth, profiting from England's emerging dominance in seaborne shipping. Two immigrant families, Rothschild and Baring, established merchant banking firms in London in the late 18th century and came to dominate world banking in the next century. Many merchant banks were also established outside of London, especially in growing industrial and port cities like Manchester, Birmingham, Newcastle and Liverpool. By 1784, there were more than 100 provincial banks. The industrialist turned banker could assist his own industry since he not only provided a local means of payment, but also accepted deposits. Here we have a parallel with the early goldsmith banking. A great impetus to country banking came in 1797 when, with England threatened by war, the Bank of England suspended cash payments. A handful of Frenchmen landed in Pembrokeshire, causing a panic. Shortly after this incident, Parliament authorised the Bank of England and country bankers to issue notes of low denomination. 19th century On 23 October 1826 a new joint stock bank, Lancaster Banking Company, was formed. However earlier that year the Bristol Old bank had converted from a private to a joint stock bank, making it the first joint stock bank This was quickly followed by other institutions such as the Manchester & Liverpool District Banking Company and the National Provincial Bank. The National Provincial was the first bank to be considered a truly national bank with twenty branches across England and Wales. In 1844 the government introduced the Bank Charter Act to regulate the issuing of bank notes. Two banking collapses, one in 1866 and another in 1878 caused significant reputation damage but in consequence record keeping and accounting improved. The resulting new organisations became huge bureaucracies with a board of directors, general manager, secretary and an army of accounting clerks.

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In 1896 twenty smaller private banks formed a new joint-stock bank. The leading partners of the new bank, which was named Barclay and Company, were already connected by a web of family, business and religious relationships. The company became known as the Quaker Bank, because this was the family tradition of the founding families. This bank eventually became Barclays plc. 20th century With the outbreak of war banking flourished and the so called ‘’Big Five’’ commenced a series of takeovers and mergers. These banks, Westminster, National Provincial, Barclays, Lloyds and Midland were eventually reined in by government control. Between the wars, there was a decline to match the general depression of the time. But the banks fought back by taking action to recruit less wealthy customers and by introducing small saving schemes. It would take until 1950 for real recovery where there was a huge increase in provincial branch offices and the emergence of the high street bank. Relaxation of some controls over mergers and acquisitions led to consolidation in the 1960s in which the Big Five became the Big Four, along with the takeover of several regional banks (Martins, District Bank, National Bank, Glyn Mills and William Deacons). At the same time the government launched a new banking service, the National Girobank. In 1976 the Banking Act increased the supervisory role of the Bank of England. Introduction of computing, credit cards and many new services continued to drive the expansion of banks and as deregulation was introduced competitiveness increased. Banks improved services, refurbished antiquated premises and brought in further technology such as ATM. 21st century Currently banks in the United Kingdom have refined their services with most offering very similar services being distinguished only by offering different interest rates. Indeed a very recent trend has been to not advertise interest rates as this avoids the banks having to offer such advertised rates to at least 60% of their customers. Functions

Commercial banks play an important role in the financial system and the economy. As a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner. They provide specialized financial services, which reduce the cost of obtaining information about both savings and borrowing

al banks play an important role in the financial system and the economy. As a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner. They provide specialized financial services, which reduce the cost of obtaining information about both savings and borrowing

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opportunities. These financial services help to make the overall economy more efficient. Banks operate by borrowing funds-usually by accepting deposits or by borrowing in the money markets. Banks borrow from individuals, businesses, financial institutions, and governments with surplus funds (savings). They then use those deposits and borrowed funds (liabilities of the bank) to make loans or to purchase securities (assets of the bank). Banks make these loans to businesses, other financial institutions, individuals, and governments (that need the funds for investments or other purposes). Interest rates provide the price signals for borrowers, lenders, and banks. Through the process of taking deposits, making loans, and responding to interest rate signals, the banking system helps channel funds from savers to borrowers in an efficient manner. Savers range from an individual with a $1,000 certificate of deposit to a corporation with millions of dollars in temporary savings. Banks also service a wide array of borrowers, from an individual who takes a loan of $100 on a credit card to a major corporation financing a billion-dollar corporate merger.

5. Concepte cheie ale temei 1 - Banks - Specialised terminology - English Tenses (2)- Indicative Mood

6. Întrebări de control şi teme de dezbatere

Answer the following questions:

1. Why do banks exist? 2. Functions 3. Why are banks obviously one of the fundamental economic institutions of

capitalism and modern industrial society? Explain.

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7.Itemi model pentru teste de (auto)evaluare Decide if the sentences are true or false: 1.Banks make money by taking a portion of the money that is stored in them and loaning it to other people and companies in exchange for a promise to repay the loan, plus interest. 2.Banks compete for deposits through the interest rates on the money stored in them. 3.The difference between the interest collected by the bank and the interest paid by the bank contributes to the income of the bank. 4.Banks also charge fees for various services, all of which involve moving money from one account to another or issuing checks and credit cards. Plus there are fees for processing loans, etc. 5.Currently banks in the United Kingdom have refined their services with most offering very similar services being distinguished only by offering different interest rates. 6.In 1878 the government introduced the Bank Charter Act to regulate the issuing of bank notes. 7.The Bank of England was created in 1594. 8.Rezumat Banks exist primarily to provide a secure place to store wealth held in the form of readily available money. But like all enterprises staffed by humans, banks also exist in order to make money. Banks make money by making loans from a portion of the deposits and charging interest on those loans. Banks compete for deposits through the interest rates offered on them. Banks also charge fees for various services, all of which involve moving money from one account to another or issuing checks and credit cards. Plus there are fees for processing loans, etc.. As a result of these various activities - without which the bank

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would not make any money - banks are considered vital to economic development through their prudent investment of portions of the wealth stored in them. Banks are also considered integral to various other functions related to the management of the nation's money supply and systems of credit. However, regardless of what banks now do, they exist first and foremost as a secure place to store wealth held in the form of readily available money. As a conclusion, banks act as an intermediary between despositors and borrowers basically - but there have been changes to the traditional banks in that nowadays banks provide a lot of new functions to its customers aside from loans and deposit holdings. 9.Temă de casă Realizarea unui portofoliu : Banks in XXI century 10.Bibliografie recomandată - Barbu Adina, Chirimbu Sebastian ( 2007) : English Language for Daily Use, Editura Fundaţiei România de Mâine, Bucureşti - Niculescu Andrei (coordonator) (2007): The Language of Business, Editura Fundaţiei România de Mâine, Bucureşti - Bondrea Emilia, Mihăilă Ramona (coord.), Chirimbu Sebastian (co-autor) (2009): Aspecte ale civilizaţiilor europene, Editura Fundaţiei România de Mâine, Bucureşti - Vasilescu Ruxandra (coord.) (2008): Dicţionar de termeni economici român-englez-francez-spaniol , Editura Polirom, Iaşi Opţional: - Chirimbu Despina(2008): Discurs economic în limba engleză (suport pentru cursul opţional/ versiune print sau online), USH

UNITATEA DE ÎNVĂŢARE 2 THE EUROPEAN UNION

Learning Units: The European Investment Bank, The European System of Central Banks /

The European Central Bank / The Court of Auditors. 1.Introducere

The institutional triangle (EP, CEU, EC) produces the policies and laws that apply throughout the EU. In principle, it is the Commission that proposes new laws, but it is the Parliament and Council that adopt them. The Commission and the member states then implement them, and the Commission ensures that the laws are properly taken on board. Two other institutions have a vital part to play: the Court of Justice upholds the rule of European law, and the Court of Auditors checks the financing of the Union’s activities. The powers and responsibilities of these institutions are laid down in the Treaties, which are the foundation of everything the EU does. They also lay down the rules and procedures that the EU institutions must follow.

The European Central Bank (ECB) was set up in 1998, under the Treaty on European Union, and it is based in Frankfurt (Germany). Its job is to manage the euro - the EU's single currency, and to safeguard price stability for the more than two-thirds of the EU's citizens who use the euro. The ECB is also responsible for framing and implementing the EU’s economic and monetary policy.

2.Competenţele specifice disciplinei (subsumate prezentei teme/unităţi de învăţare) - Dezvoltarea celor patru competenţe lingvistice: înţelegerea textului, redactare (comentarii, scrisori, eseuri etc.), comunicare verbală, înţelegere orală; - Elaborarea unor fişe de lucru personale, elaborarea unor portofolii cu tematică dată; - Cultivarea creativităţii în aplicara competenţelor lingvistice dobândite; - Adaptarea noţiunilor dobândite la limbajul specific profilul nefilologie (financiar-bancar); - Valorificarea optimă şi creativă a competenţelor

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lingvistice dobândite; - Realizarea de interacţiuni în comunicarea orală sau scrisă în limba engleză. 3.Timpul alocat Timpul alocat parcurgerii temei în cadrul cursului practic de limba engleză: 2h 4.Conţinutul temei 2 Exploatarea limbii engleze pe baza textelor didactice din bibliografia obligatorie (propuse pe grade de dificultate). Exploatarea limbii se va face prin intermediul discuţiilor, dezbaterilor, lucrului în grup şi individual precum şi a exerciţiilor. 4.1 The European Central Bank (ECB) was set up in 1998, under the Treaty on European Union, and it is based in Frankfurt (Germany). Its job is to manage the euro - the EU's single currency, and to safeguard price stability for the more than two-thirds of the EU's citizens who use the euro. The ECB is also responsible for framing and implementing the EU’s economic and monetary policy. To carry out its role, the ECB works with the European System of Central Banks (ESCB), which covers all 27 EU countries. However, only 16 of these countries have so far adopted the euro. The 16 collectively make up the ‘euro area’ and their central banks, together with the European Central Bank, make up what is called the ‘Eurosystem’. The ECB works in complete independence. Neither the ECB, the national central banks of the Eurosystem, nor any member of their decision-making bodies can ask for or accept instructions from any other body. The EU institutions and member state governments must respect this principle and must not seek to influence the ECB or the national central banks. The ECB, working closely with the national central banks, prepares and implements the decisions taken by the Eurosystem’s decision-making bodies - the Governing Council, the Executive Board and the General Council. One of the ECB’s main tasks is to maintain price stability in the euro area, so that the euro’s purchasing power is not eroded by inflation. The ECB aims to ensure that the year-on-year increase in consumer prices is less than, but close to, 2% over the medium term. It does this in two ways: - First, by controlling the money supply. If the money

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supply is excessive compared to the supply of goods and services, inflation will result. - Second, by monitoring price trends and assessing the risk they pose to price stability in the euro area Controlling the money supply involves, amongst other things, setting interest rates throughout the euro area. This is perhaps the Bank’s best-known activity. 4.2 The European Investment Bank (EIB) was set up in 1958 by the Treaty of Rome as the long-term lending Bank of the European Union. The EIB lends money to the public and private sectors for projects of European interest, such as: - Cohesion and convergence of EU regions - Support for small and medium-sized enterprises - Environmental schemes - Research, development and innovation - Transport - Energy The EIB is active in the EU and in some 140 countries worldwide with which the EU has a Cooperation agreement. The EIB is a non-profit, policy driven bank. Unlike commercial banks, the EIB does not manage personal bank accounts, conduct over-the-counter transactions or provide private investment advice. The EIB makes long-term loans for capital investment projects (mainly fixed assets) but does not provide grants. The EIB is owned by the Member States of the European Union. They subscribe jointly to its capital, each country’s contribution reflecting its economic weight within the Union. The EIB does not use any funds from the EU budget. Instead, it is self-financing, borrowing on the financial markets Because the EU Member States are the EIB’s shareholders, it carries the highest possible credit rating (AAA) on the money markets. As a result, the EIB can raise large amounts of capital on very competitive terms. As the EIB is not-for –profit, its lending conditions are equally favourable. The EIB cannot however lend anymore than 50% of the total cost of an individual project. The projects the Bank invests in are carefully selected according to the following criteria:

- they must help achieve EU objectives; - they must be economically, financially, technically and

environmentally sound; - they should help attract other sources of funding.

The EIB also supports sustainable development in the candidate and potential candidate countries, in EU

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neighbour countries to the south and to the east, and in partner countries elsewhere. The EIB is the majority shareholder in the European Investment Fund. 4.3 The Court of Auditors was set up in 1975. It is based in Luxembourg. The Court’s job is to check that EU funds, which come from the taxpayers, are properly collected and that they are spent legally, economically and for the intended purpose. Its aim is to ensure that the taxpayers get maximum value for their money, and it has the right to audit any person or organisation handling EU funds. The Court has one member from each EU country, appointed by the Council for a renewable term of six years. The members elect one of their number as President for a renewable term of three years. Vítor Manuel da Silva Caldeira, from Portugal, was elected President in January 2008. The Court’s main role is to check that the EU budget is correctly implemented – in other words, that EU income and expenditure is legal and above board and to ensure sound financial management. So its work helps guarantee that the EU system operates efficiently and openly. To carry out its tasks, the Court investigates the paperwork of any person or organisation handling EU income or expenditure. It frequently carries out on-the-spot checks. Its findings are written up in reports which bring any problems to the attention of the Commission and EU member state governments. To do its job effectively, the Court of Auditors must remain completely independent of the other institutions but at the same time stay in constant touch with them. One of its key functions is to help the European Parliament and the Council by presenting them every year with an audit report on the previous financial year. Parliament examines the Court’s report in detail before deciding whether or not to approve the Commission’s handling of the budget. If satisfied, the Court of Auditors also sends the Council and Parliament a statement of assurance that European taxpayers' money has been properly used. Finally, the Court of Auditors gives its opinion on proposals for EU financial legislation and for EU action to fight fraud. 5.Concepte cheie ale temei 2 - The European system of Central Banks - Specialised terminology - English Tenses (3)- Indicative Mood - Determiners

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6.Întrebări de control şi teme de dezbatere Answer the following questions: - Describe the responsabilities of the ECB. - Who is responsible to check that EU funds, which come from the taxpayers, are properly collected and that they are spent legally, economically and for the intended purpose? - Who does support sustainable development in the candidate and potential candidate countries, in EU neighbour countries to the south and to the east, and in partner countries elsewhere? 7.Itemi model pentru teste de (auto)evaluare Decide if the sentences are true or false: 1.One of the ECB’s main tasks is to maintain price stability in the euro area, so that the euro’s purchasing power is not eroded by inflation. 2.Financial institutions cannot function as mediators in share markets and debt security markets. 3.The EIBs job is to check that EU funds, which come from the taxpayers, are properly collected and that they are spent legally, economically and for the intended purpose. 4.The ECB works with the European System of Central Banks (ESCB), which covers all 27 EU countries. 5.Only 25 of 27 Member States have so far adopted the euro. 6.The 16 collectively states (from EU) make up the ‘euro area’ and their central banks, together with the European Central Bank, make up what is called the ‘Eurosystem’.

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8. Rezumat Financial institutions are those organizations, that are involved in providing various types of financial services to their customers. The financial institutions are controlled and supervised by the rules and regulations delineated by government authorities. Some of the financial institutions also function as mediators in share markets and debt security markets. There the principal function of financial institutions is to collect funds from the investors and direct the funds to various financial services providers in search for those funds.

9. Temă de casă Realizarea unui portofoliu : Eurosystem

10. Bibliografie recomandată

- Barbu Adina, Chirimbu Sebastian ( 2007) : English Language for Daily Use, Editura Fundaţiei România de Mâine, Bucureşti - Niculescu Andrei (coordonator) (2007): The Language of Business, Editura Fundaţiei România de Mâine, Bucureşti - Bondrea Emilia, Mihăilă Ramona (coord.), Chirimbu Sebastian (co-autor) (2009): Aspecte ale civilizaţiilor europene, Editura Fundaţiei România de Mâine, Bucureşti - Vasilescu Ruxandra (coord.) (2008): Dicţionar de termeni economici român-englez-francez-spaniol , Editura Polirom, Iaşi Opţional: - Chirimbu Despina(2008): Discurs economic în limba engleză (suport pentru cursul opţional/ versiune print sau online), USH

UNITATEA DE ÎNVĂŢARE 3 FUNCTION AND STRUCTURE OF A BANK(2)

Learning Units: Merchant banks/ The banking industry today/ A brief history of bank

notes

1. Introducere The term „merchant banking” is generally understood to mean negotiated private equity investment by financial institutions in the unregistered securities of either privately or publicly held companies. Both commercial banks and investment banks may engage in merchant banking activities. Historically, merchant banks' original purpose was to facilitate and/or finance production and trade of commodities, hence the name "merchant". Few banks today restrict their activities to such a narrow scope. 2.Competenţele specifice disciplinei (subsumate prezentei teme/unităţi de învăţare) - Dezvoltarea celor patru competenţe lingvistice: înţelegerea textului, redactare (comentarii, scrisori, eseuri etc.), comunicare verbală, înţelegere orală; - Elaborarea unor fişe de lucru personale, elaborarea unor portofolii cu tematică dată; - Cultivarea creativităţii în aplicara competenţelor lingvistice dobândite; - Adaptarea noţiunilor dobândite la limbajul specific profilul nefilologie (financiar-bancar); - Valorificarea optimă şi creativă a competenţelor lingvistice dobândite; - Realizarea de interacţiuni în comunicarea orală sau scrisă în limba engleză. 3.Timpul alocat Timpul alocat parcurgerii temei în cadrul cursului practic de limba engleză: 2h 4.Conţinutul temei 3 Exploatarea limbii engleze pe baza textelor didactice din bibliografia obligatorie (propuse pe grade de dificultate). Exploatarea limbii se va face prin intermediul discuţiilor, dezbaterilor, lucrului în grup şi individual precum şi a exerciţiilor.

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4.1 Merchant banks are in fact the original "banks". These were invented in the Middle Ages by Italian grain merchants. As the Lombardy merchants and bankers grew in stature based on the strength of the Lombard plains cereal crops, many displaced Jews fleeing Spanish persecution were attracted to the trade. They brought with them ancient practices from the Middle and Far East silk routes. Originally intended for the finance of long trading journeys, these methods were applied to finance the production and trading of grain. The Jews could not hold land in Italy, so they entered the great trading piazzas and halls of Lombardy, alongside the local traders, and set up their benches to trade in crops. They had one great advantage over the locals. Christians were strictly forbidden the sin of usury, defined as lending at interest (Islam makes similar condemnations of usury). The Jewish newcomers, on the other hand, could lend to farmers against crops in the field, a high-risk loan at what would have been considered usurious rates by the Church; but the Jews were not subject to the Church's dictates. In this way they could secure the grain-sale rights against the eventual harvest. They then began to advance payment against the future delivery of grain shipped to distant ports. In both cases they made their profit from the present discount against the future price. This two-handed trade was time-consuming and soon there arose a class of merchants who were trading grain debt instead of grain. The Jewish trader performed both financing (credit) and underwriting (insurance) functions. Financing took the form of a crop loan at the beginning of the growing season, which allowed a farmer to develop and manufacture (through seeding, growing, weeding, and harvesting) his annual crop. Underwriting in the form of a crop, or commodity, insurance guaranteed the delivery of the crop to its buyer, typically a merchant wholesaler. In addition, traders performed the merchant function by made arrangements to supply the buyer of the crop through alternative sources --- grain stores or alternate markets, for instance --- in the event of crop failure. He could also keep the farmer (or other commodity producer) in business during a drought or other crop failure, through the issuance of a crop (or commodity) insurance against the hazard of failure of his crop. Merchant banking progressed from financing trade on one's own behalf to settling trades for others and then to holding deposits for settlement of "billette" or notes written by the people who were still brokering the actual grain.

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And so the merchant's "benches" (bank is derived from the Italian for bench, banca, as in a counter) in the great grain markets became centers for holding money against a bill (billette, a note, a letter of formal exchange, later a bill of exchange and later still a cheque). These deposited funds were intended to be held for the settlement of grain trades, but often were used for the bench's own trades in the meantime. The term bankrupt is a corruption of the Italian banca rotta, or broken bench, which is what happened when someone lost his traders' deposits. Being "broke" has the same connotation. A sensible manner of discounting interest to the depositors against what could be earned by employing their money in the trade of the bench soon developed; in short, selling an "interest" to them in a specific trade, thus overcoming the usury objection. Once again this merely developed what was an ancient method of financing long-distance transport of goods. The medieval Italian markets were disrupted by wars and in any case were limited by the fractured nature of the Italian states. And so the next generation of bankers arose from migrant Jewish merchants in the great wheat-growing areas of Germany and Poland. Many of these merchants were from the same families who had been part of the development of the banking process in Italy. They also had links with family members who had, centuries before, fled Spain for both Italy and England. As non-agricultural wealth expanded, many families of goldsmiths (another business not prohibited to Jews) also gradually moved into banking. This course of events set the stage for the rise of Jewish family banking firms whose names still resonate today, such as Warburgs and Rothschilds. The rise of Protestantism, however, freed many European Christians from Rome's dictates against usury. In the late 18th century, protestant merchant families began to move into banking, especially in trading countries such as the United Kingdom (Barings), Germany (Schroders) and the Netherlands (Hope & Co.) At the same time, new types of financial activities broadened the scope of banking far beyond its origins. The merchant-banking families dealt in everything from underwriting bonds to originating foreign loans. For instance, bullion trading and bond issuance were two of the specialties of the Rothschilds. In 1803, Barings teamed with Hope & Co. to facilitate the Louisiana Purchase. In the 19th century, the rise of trade and industry in the US led to powerful new private merchant banks, culminating in J.P. Morgan & Co. During the 20th century, however, the financial world began to outgrow the resources of family-owned and other forms of private-equity banking.

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Corporations came to dominate the banking business. For the same reasons, merchant banking activities became just one area of interest for modern banks. 4.2 UK Banking Services The UK banking industry has undergone huge changes during the last decade both in terms of product range and service delivery. The vast majority of UK banks were previously based on the high street with customers visiting their local branch to access money or request advice on products and services. Today, the UK banking industry is very different. The majority of customers now need a number of different methods for accessing their money and gaining advice on financial products and services. As technology has evolved, the range of customer contact methods has evolved accordingly to ensure that customers can manage their money 24 hours a day from locations across the world. The growth of Internet Banking gives our customers the freedom to access their accounts securely 24 hours a day, 365 days a year. Our website provides extensive amounts of information such as find interest rates for Current Accounts, account details and services, plus functionality such as online calculators and the ability to open a bank account online. Through automated Telephone Banking, our UK banking customers can also speak to a customer service representative to request information about their current account and discuss additional products according to their specific needs. The range of financial services offered to our UK banking customers have been designed to cater for all customer circumstances and individual product needs, and to ensure you can access and manage your money 24 hours a day. 4.3 The first recorded use of paper money was in the 7th century in China. However, the practice did not become widespread in Europe for nearly a thousand years. In the 16th century the goldsmith-bankers began to accept deposits, make loans and transfer funds. They also gave receipts for cash, that is to say gold coins, deposited with them. These receipts, known as “running cash notes”, were made out in the name of the depositor and promised to pay him on demand. Many also carried the words “or bearer” after the name of the depositor, which allowed them to circulate in a limited way. In 1694 the Bank of England was established in order to raise money for King William III’s war against France. Almost immediately the Bank started to issue notes in return for

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deposits. Like the goldsmiths’ notes, the crucial feature that made Bank of England notes a means of exchange was the promise to pay the bearer the sum of the note on demand. This meant that the note could be redeemed at the Bank for gold or coinage by anyone presenting it for payment; if it was not redeemed in full, it was endorsed with the amount withdrawn. These notes were initially handwritten on Bank paper and signed by one of the Bank’s cashiers. They were made out for the precise sum deposited in pounds, shillings and pence. However, after the recoinage of 1696 reduced the need for small denomination notes, it was decided not to issue any notes for sums of less than £50. Since the average income in this period was less than £20 a year, most people went through life without ever coming into contact with banknotes. During the 18th century there was a gradual move toward fixed denomination notes. From 1725 the Bank was issuing partly printed notes for completion in manuscript. The £ sign and the first digit were printed but other numerals were added by hand, as were the name of the payee, the cashier’s signature, the date and the number. Notes could be for uneven amounts, but the majority were for round sums. By 1745 notes were being part printed in denominations ranging from £20 to £1,000. In 1759, gold shortages caused by the Seven Years War forced the Bank to issue a £10 note for the first time. The first £5 notes followed in 1793 at the start of the war against Revolutionary France. This remained the lowest denomination until 1797, when a series of runs on the Bank, caused by the uncertainty of the war, drained its bullion reserve to the point where it was forced to stop paying out gold for its notes. Instead, it issued £1 and £2 notes. The Restriction Period, as it was known, lasted until 1821 after which gold sovereigns took the place of the £1 and £2 notes. The Restriction Period prompted the Irish playwright and MP, Richard Brinsley Sheridan, to refer angrily to the Bank as “… an elderly lady in the City”. This was quickly changed by cartoonist, James Gillray, to the Old Lady of Threadneedle Street, a name that has stuck ever since. The first fully printed notes appeared in 1855 relieving the cashiers of the task of filling in the name of the payee and signing each note individually. The practice of writing the name of the Chief Cashier as the payee on notes was halted in favour of the anonymous “I promise to pay the bearer on demand the sum of …”, which has remained unchanged on notes to this day. The printed signature on the note continued to be that of one of three cashiers until 1870, since when it has always been that of the Chief Cashier. The First World War saw the link with gold broken once again; the Government needed to preserve its stock of bullion and the Bank ceased to pay out gold for its notes. In 1914 the Treasury printed and issued 10 shilling and £1 notes, a task which the

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Bank took over in 1928. The gold standard was partially restored in 1925 and the Bank was again obliged to exchange its notes for gold, but only in multiples of 400 ounces or more. Britain finally left the gold standard in 1931 and the note issue became entirely fiduciary, that is wholly backed by securities instead of gold. The Bank has not always been the sole issuer of bank notes in England and Wales. Acts of 1708 and 1709 had given it a partial monopoly by making it unlawful for companies or partnerships of more than six people to set up banks and issue notes. The ban did not extend to the many provincial bankers – the so-called country bankers – who were all either individuals or small family concerns. However, the Country Bankers’ Act of 1826 allowed the establishment of note issuing joint-stock banks with more than six partners, but not within 65 miles of London. The Act also allowed the Bank of England to open branches in major provincial cities, which gave it more outlets for its notes. In 1833 the Bank’s notes were made legal tender for all sums above £5 in England and Wales so that, in the event of a crisis, the public would still be willing to accept the Bank’s notes and its bullion reserves would be safeguarded. It was the 1844 Bank Charter Act which was the key to the Bank achieving its gradual monopoly of the note issue in England and Wales. Under the Act no new banks of issue could be established and existing note issuing banks were barred from expanding their issue. Those, whose issues lapsed, because, for example, they merged with a non-issuing bank, forfeited their right of issue. The last private bank notes in England and Wales were issued by the Somerset bank, Fox, Fowler and Co in 1921. 5.Concepte cheie ale temei 3 - Merchant Banks - Banking services - Specialised terminology - English Tenses – Conditional Mood 6.Întrebări de control şi teme de dezbatere Answer the following questions: - How can you define the activity of merchant banks? - What does goldsmiths in sixteenth century? - When and by whom private banknotes were issued last? - What are the characteristics of the UK banking industry today?

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7.Itemi model pentru teste de (auto)evaluare Decide if the sentences are true or false: 1. The UK banking industry has undergone huge changes during the last decade both in terms of product range and service delivery. 2. The vast majority of UK banks were previously based on the high street with customers visiting their local branch to access money or request advice on products and services. 3. The first fully printed notes appeared in 1855 relieving the cashiers of the task of filling in the name of the payee and signing each note individually. 4. The first recorded use of paper money was in the 7th century in France. However, the practice did not become widespread in Europe for nearly a thousand years. 5. During the 18th century there was a gradual move toward fixed denomination notes. 6. Both commercial banks and investment banks may engage in merchant banking activities.

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8.Rezumat The Bank of England is the central bank for the UK; it promotes and maintains a stable and efficient monetary and financial framework, and essentially acts as banker to the banking system. Since 1997, the Bank of England has also set the official interest rate for the UK. UK banking and financial institutions are subject to multiple regulations. The regulatory framework of the UK banking system has traditionally been based on cooperation between the Financial Services Authority (FSA) and authorized institutions. The banking industry in the UK is particularly exposed to tensions between competing policy objectives. 9.Temă de casă Realizarea unui portofoliu : The history of bank notes – important steps 10.Bibliografie recomandată - Barbu Adina, Chirimbu Sebastian ( 2007) : English Language for Daily Use, Editura Fundaţiei România de Mâine, Bucureşti - Niculescu Andrei (coordonator) (2007): The Language of Business, Editura Fundaţiei România de Mâine, Bucureşti - Bondrea Emilia, Mihăilă Ramona (coord.), Chirimbu Sebastian (co-autor) (2009): Aspecte ale civilizaţiilor europene, Editura Fundaţiei România de Mâine, Bucureşti - Vasilescu Ruxandra (coord.) (2008): Dicţionar de termeni economici român-englez-francez-spaniol , Editura Polirom, Iaşi Opţional: - Chirimbu Despina(2008): Discurs economic în limba engleză (suport pentru cursul opţional/ versiune print sau online), USH

UNITATEA DE ÎNVĂŢARE 4 MONEY

Learning Units: General functions/ History of Euro/ The Euro- a European adventure/

The Euromarkets 1.Introducere Money is often defined in terms of the three functions or services that it provides. Money serves as a medium of exchange, as a store of value, and as a unit of account. The word "money" is believed to originate from a temple of Hera, located on Capitoline, one of Rome's seven hills. In the ancient world Hera was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located. The name "Juno" may derive from the Etruscan goddess Uni (which means "the one", "unique", "unit", "union", "united") and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world, a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning 'in kind'. 2.Competenţele specifice disciplinei (subsumate prezentei teme/unităţi de învăţare) - Dezvoltarea celor patru competenţe lingvistice: înţelegerea textului, redactare (comentarii, scrisori, eseuri etc.), comunicare verbală, înţelegere orală; - Elaborarea unor fişe de lucru personale, elaborarea unor portofolii cu tematică dată; - Cultivarea creativităţii în aplicara competenţelor lingvistice dobândite; - Adaptarea noţiunilor dobândite la limbajul specific profilul nefilologie (financiar-bancar); - Valorificarea optimă şi creativă a competenţelor lingvistice dobândite; - Realizarea de interacţiuni în comunicarea orală sau scrisă în limba engleză. 3.Timpul alocat Timpul alocat parcurgerii temei în cadrul cursului practic de limba engleză: 1,5h

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4.Conţinutul temei 4 Exploatarea limbii engleze pe baza textelor didactice din bibliografia obligatorie (propuse pe grade de dificultate). Exploatarea limbii se va face prin intermediul discuţiilor, dezbaterilor, lucrului în grup şi individual precum şi a exerciţiilor. 4.1 The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter. Instead, non-monetary societies operated largely along the principles of gift economics. When barter did occur, it was usually between either complete strangers or potential enemies. Many cultures around the world eventually developed the use of commodity money. The shekel was originally a unit of weight, and referred to a specific weight of barley, which was used as currency. The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money – often, the shells of the money cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins. It is thought by modern scholars that these first stamped coins were minted around 650–600 BC. The system of commodity money eventually evolved into a system of representative money. This occurred because gold and silver merchants or banks would issue receipts to their depositors – redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song Dynasty. These banknotes, known as "jiaozi" evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money, and were used alongside coins. Banknotes were first issued in Europe by Stockholms Banco in 1661, and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th-19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II, at the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the US dollar. The US dollar was in turn fixed to gold. In 1971 the US government suspended the convertibility of the US dollar to gold. After this many countries de-pegged their currencies from

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the US dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. 4.2 Money is often defined in terms of the three functions or services that it provides. Money serves as a medium of exchange, as a store of value, and as a unit of account. -Medium of exchange. Money's most important function is as a medium of exchange to facilitate transactions. Without money, all transactions would have to be conducted by barter, which involves direct exchange of one good or service for another. The difficulty with a barter system is that in order to obtain a particular good or service from a supplier, one has to possess a good or service of equal value, which the supplier also desires. In other words, in a barter system, exchange can take place only if there is a double coincidence of wants between two transacting parties. The likelihood of a double coincidence of wants, however, is small and makes the exchange of goods and services rather difficult. Money effectively eliminates the double coincidence of wants problem by serving as a medium of exchange that is accepted in all transactions, by all parties, regardless of whether they desire each others' goods and services. -Store of value. In order to be a medium of exchange, money must hold its value over time; that is, it must be a store of value. If money could not be stored for some period of time and still remain valuable in exchange, it would not solve the double coincidence of wants problem and therefore would not be adopted as a medium of exchange. As a store of value, money is not unique; many other stores of value exist, such as land, works of art, and even baseball cards and stamps. Money may not even be the best store of value because it depreciates with inflation. However, money is more liquid than most other stores of value because as a medium of exchange, it is readily accepted everywhere. Furthermore, money is an easily transported store of value that is available in a number of convenient denominations. -Unit of account. Money also functions as a unit of account, providing a common measure of the value of goods and services being exchanged. Knowing the value or price of a good, in terms of money, enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of the good to purchase.

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4.3 In economics, money is a broad term that refers to any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the amount of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Modern monetary theory distinguishes among different ways to measure the money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. 4.4 Launched in 1999, Europe’s single currency is now shared by 17 EU countries and around 331 million citizens, making it one of the world’s most important currencies and one of the EU’s greatest achievements. All EU Member States form part of Economic and Monetary Union (EMU), which can be described as an advanced stage of economic integration based on a single market. It involves close co-ordination of economic and fiscal policies and, for those countries fulfilling certain conditions, a single monetary policy and a single currency – the euro. The process of economic and monetary integration in the EU parallels the history of the Union itself. When the EU was founded in 1957, the Member States concentrated on building a 'common market'. However, over time it became clear that closer economic and monetary co-operation was desirable for the internal market to develop and flourish further. But the goal of achieving full EMU and a single currency was not enshrined until the 1992 Maastricht Treaty (Treaty on European Union), which set out the ground rules for its introduction. These say what the objectives of EMU are, who is responsible for what, and what conditions Member States must meet in order to adopt the euro. These conditions are known as the 'convergence criteria' (or 'Maastricht criteria') and include low and stable inflation, exchange rate stability and sound public finances.

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4.5 What Does Euromarket Mean? The market that includes all of the European Union member countries - many of which use the same currency, the euro. All tariffs between Euromarket member countries have been abolished, and import duties from all non-member countries have been fixed for all of the member countries. The Euromarket also has one central bank for all of the member countries, the European Central Bank (ECB). 5.Concepte cheie ale temei 4 - Money, Euro, Euromarket - Specialised terminology - English Tenses – Conditional Mood (2) 6.Întrebări de control şi teme de dezbatere - Give a definition for the term “euromarket”. - When the European single currency was launched? - Did the euro impose economic changes in the 17 countries? - What are the main functions of money? 7.Itemi model pentru teste de (auto)evaluare Decide if the sentences are true or false: 1. In economics, money is a broad term that refers to any financial instrument that can fulfill the functions of money. 2. All EU Member States form part of Economic and Monetary Union (EMU), which can be described as an advanced stage of economic integration based on a single market. 3. When the EU was founded in 1957, the Member States concentrated on building a 'common market'. 4. In order to be a medium of exchange, money must hold its value over time; that is, it must be a store of value. 5. Not so many cultures around the world eventually developed the use of commodity money.

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8.Rezumat The Euromarket is a large single market comprised of all member countries, allowing for more efficient trade and the centralization of monetary policy through the ECB. The Euromarket is considered a major finance source for international trade, through the money market or eurocurrency, eurocredit and eurobonds.The currency code used in the general industry to represent the euro, the official currency for more than half of the 27 members of the European Union (EU). The name "euro" was selected in 1995; the currency replaced the former European Currency Unit (ECU). It was introduced on January 1, 1999, and began circulating in 2002 9.Temă de casă Realizarea unui portofoliu : The history of Euro / The Euro- a European adventure 10.Bibliografie recomandată - Barbu Adina, Chirimbu Sebastian ( 2007) : English Language for Daily Use, Editura Fundaţiei România de Mâine, Bucureşti - Niculescu Andrei (coordonator) (2007): The Language of Business, Editura Fundaţiei România de Mâine, Bucureşti - Bondrea Emilia, Mihăilă Ramona (coord.), Chirimbu Sebastian (co-autor) (2009): Aspecte ale civilizaţiilor europene, Editura Fundaţiei România de Mâine, Bucureşti - Vasilescu Ruxandra (coord.) (2008): Dicţionar de termeni economici român-englez-francez-spaniol , Editura Polirom, Iaşi Opţional: - Chirimbu Despina(2008): Discurs economic în limba engleză (suport pentru cursul opţional/ versiune print sau online), USH

UNITATEA DE ÎNVĂŢARE 5 ACCOUNTS

Learning Units: Current accounts, deposit accounts/ Opening a deposit account/ Banking

business 1.Introducere

There are several different types of bank accounts. Understanding them all can be difficult, as each banking institution may offer a broad range of bank account types. However, most bank accounts fall into one of five categories. By learning the different account categories, you can make deciphering the choices offered at your banking institution much easier.

2.Competenţele specifice disciplinei (subsumate prezentei teme/unităţi de învăţare) - Dezvoltarea celor patru competenţe lingvistice: înţelegerea textului, redactare (comentarii, scrisori, eseuri etc.), comunicare verbală, înţelegere orală; - Elaborarea unor fişe de lucru personale, elaborarea unor portofolii cu tematică dată; - Cultivarea creativităţii în aplicara competenţelor lingvistice dobândite; - Adaptarea noţiunilor dobândite la limbajul specific profilul nefilologie (financiar-bancar); - Valorificarea optimă şi creativă a competenţelor lingvistice dobândite; - Realizarea de interacţiuni în comunicarea orală sau scrisă în limba engleză. 3.Timpul alocat Timpul alocat parcurgerii temei în cadrul cursului practic de limba engleză: 1,5h 4.Conţinutul temei 5 Exploatarea limbii engleze pe baza textelor didactice din bibliografia obligatorie (propuse pe grade de dificultate). Exploatarea limbii se va face prin intermediul discuţiilor, dezbaterilor, lucrului în grup şi individual precum şi a exerciţiilor.

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4.1 A bank account is a record of the financial transactions between the customer and the banking institution. The banking institutions have provided several types of accounts to cater to the needs of all sorts of individuals. One of the most important functions of banks is accepting deposits, which is aimed towards generating savings for the purpose of utilizing them in profitable investments. People, on the other hand, also prefer to deposit their savings in the banks, as they can earn interest and also avoid the danger of theft. Though, the types of accounts offered can vary from bank to bank, here are some of the common bank accounts offered by commercial banks. Checking Account A checking account is also known as a current account or a transactional account. Money deposited in this type of account can be withdrawn at any time, as there in no restriction on the number of withdrawals and the amount of money withdrawn. Customers are generally given paper checks to carry out day-to-day transactions, like paying bills, making purchases, or transferring money to another account. ATM (Automated Teller Machine) facility is also provided to the customers. However, no interest is paid on the deposited money and sometimes, customers have to pay a charge to the banks for rendering this service. This type of account is generally maintained by businessmen or concerns, as they have to make a number of financial transactions each day. A transactional account is sometimes called a demand deposit account, as no notice is required to withdraw money, i.e. money is available on demand. Savings Account Savings accounts are aimed towards mobilizing small savings from the general public. There are certain restrictions regarding the number of withdrawals and the amount to be withdrawn in a particular time period. However, money deposited in this account, earns a fair rate of interest. Though the customers can't withdraw their money with checks, they can avail the ATM facility for the same. A passbook is also provided, which keeps track of all the financial transactions. Money Market Account

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A money market account is a type of deposit account, in which money can be deposited to earn a higher rate of interest than the savings account. However, a minimum balance is required to be maintained to earn interest and avoid fees. There is also a limit on the number of transactions that can be carried out in a particular month. The customers are usually allowed to make 6 withdrawals per month. Certificate of Deposit A certificate of deposit is also known as time deposit or fixed deposit account. This type of bank account requires the customers to deposit a certain sum of money for a fixed time period. The money deposited in this account can't be withdrawn before the date of maturity. However, some banks allow customers to withdraw money before maturity, by charging a penalty. The rate of interest paid on time deposits is usually higher than the other types of bank accounts. In addition to this, the interest paid on this account depends on the maturity period, i.e. longer the maturity period, the higher is the rate of interest paid. 4.2 Banking institutions offer several different types of bank accounts to satisfy the individual needs of their customers. These bank accounts enable the public to deposit their money in banks and thereby earn a monetary return. Once you have familiarised yourself with the terms and conditions of the account, the next step is to complete your application. There are a number of ways in which you can open a bank account – either by completing our secure online application form, over the phone, or by visiting one of our high street branches, where we will be happy to help you. To open a bank account you will need to provide us with certain information including: • Your name • Contact details • Marital status • Type of bank account you wish to open • Your employment details • Details of any bank accounts you already have • A valid email address • Details of your income and outgoings Once you have completed the application to open your bank account we can then proceed to assess your details. If your application is successful, your bank account will be opened, and your cards will be sent to you, plus we’ll provide you with details of the account benefits and how to easily operate your account.

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5.Concepte cheie ale temei 5 - Accounts - Specialised terminology - English Tenses – Plural of Nouns 6.Întrebări de control şi teme de dezbatere Define the following terms: - bank account - savings account - money market account What are the main steps that a person should follow to open a current account at a bank in his country? 7.Itemi model pentru teste de (auto)evaluare Decide if the sentences are true or false: 1. A checking account is a bank account that uses checks as the primary instrument for withdrawing money. 2. With a checking account, you can make purchases, pay bills, and give or loan money to anyone you choose. 3.You can also use a check to transfer money from your checking account to a bank account at a different financial institution. 4. Usually, financial institutions allow account holders to make as many deposits and withdrawals as they wish. Many allow account holders to make withdrawals and deposits through automatic teller machines (ATM) as well. 5. A savings account is another type of bank account that allows the holder to make deposits and withdrawals. 6.Often, holders of this type of bank account are limited in the number of withdrawals and deposits they can make each month. Also, savings account holders are not able to access their money with checks. 7.Many financial institutions allow savings account holders to make deposits and withdraw funds through ATM, however. 8. Savings accounts are not as flexible as checking accounts.

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8.Rezumat Account→ 1. Accounting: Chronological record of changes in the value of an entity's assets, liabilities, and the owners' equity; each of which is represented by a separate page in the ledger. See also accounting equation and accounts. 2. Banking: Continuing financial relationship between a bank and a customer, in which deposits and debts are held and processed within a framework of established rules and procedures. 3. Commerce: On-going contractual relationship between a buyer and seller whereby payment for goods received is made at a later time (usually 30 days). →charge account and open account. 9.Temă de casă Realizarea unui portofoliu : Banking business today 10.Bibliografie recomandată - Barbu Adina, Chirimbu Sebastian ( 2007) : English Language for Daily Use, Editura Fundaţiei România de Mâine, Bucureşti - Niculescu Andrei (coordonator) (2007): The Language of Business, Editura Fundaţiei România de Mâine, Bucureşti - Bondrea Emilia, Mihăilă Ramona (coord.), Chirimbu Sebastian (co-autor) (2009): Aspecte ale civilizaţiilor europene, Editura Fundaţiei România de Mâine, Bucureşti - Vasilescu Ruxandra (coord.) (2008): Dicţionar de termeni economici român-englez-francez-spaniol , Editura Polirom, Iaşi Opţional: - Chirimbu Despina(2008): Discurs economic în limba engleză (suport pentru cursul opţional/ versiune print sau online), USH

UNITATEA DE ÎNVĂŢARE 6 FOREIGN EXCHANGE

Learning Units: The foreign exchange market/ Foreign exchange market basics/ A

country's currency 1. Introducere The foreign exchange market (forex, FX, or currency market) is a global, worldwide decentralized over-the-counter financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies. 2. Competenţele specifice disciplinei (subsumate prezentei teme/unităţi de învăţare)

- Dezvoltarea celor patru competenţe lingvistice: înţelegerea textului, redactare (comentarii, scrisori, eseuri etc.), comunicare verbală, înţelegere orală;

- Elaborarea unor fişe de lucru personale, elaborarea unor portofolii cu tematică dată;

- Cultivarea creativităţii în aplicara competenţelor lingvistice dobândite;

- Adaptarea noţiunilor dobândite la limbajul specific profilul nefilologie (financiar-bancar);

- Valorificarea optimă şi creativă a competenţelor lingvistice dobândite;

- Realizarea de interacţiuni în comunicarea orală sau scrisă în limba engleză. 3. Timpul alocat Timpul alocat parcurgerii temei în cadrul cursului practic de limba engleză: 1,5h 4. Conţinutul temei 6 Exploatarea limbii engleze pe baza textelor didactice din bibliografia obligatorie (propuse pe grade de dificultate). Exploatarea limbii se va face prin intermediul discuţiilor, dezbaterilor, lucrului în grup şi individual precum şi a exerciţiilor.

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4.1

The foreign exchange market (forex, FX, or currency market) is a global, worldwide decentralized over-the-counter financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.

The primary purpose of the foreign exchange is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import British goods and pay Pound Sterling, even though the business's income is in US dollars. It also supports speculation, and facilitates the carry trade, in which investors borrow low-yielding currencies and lend (invest in) high-yielding currencies, and which (it has been claimed) may lead to loss of competitiveness in some countries.

In a typical foreign exchange transaction, a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market began forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.

The foreign exchange market is unique because of: - its huge trading volume, leading to high liquidity; - its geographical dispersion; - its continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday; - the variety of factors that affect exchange rates; - the low margins of relative profit compared with other markets of fixed income; and - the use of leverage to enhance profit margins with respect to account size. 4.2 Unlike a stock market, the foreign exchange market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest commercial banks and securities dealers. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and not known to players outside the inner circle. The difference

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between the bid and ask prices widens (for example from 0-1 pip to 1-2 pips for a currencies such as the EUR) as you go down the levels of access. This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the foreign exchange market are determined by the size of the "line" (the amount of money with which they are trading). The top-tier interbank market accounts for 53% of all transactions. After that there are usually smaller banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail FX market makers. According to Galati and Melvin, “Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s.” (2004) In addition, he notes, “Hedge funds have grown markedly over the 2001–2004 period in terms of both number and overall size”. Central banks also participate in the foreign exchange market to align currencies to their economic needs. Banks The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account. Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for large fees. Today, however, much of this business has moved on to more efficient electronic systems. The broker squawk box lets traders listen in on ongoing interbank trading and is heard in most trading rooms, but turnover is noticeably smaller than just a few years ago. Commercial companies An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants. Central banks

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National central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading. 4.3 In a free economy, a country's currency is valued according to factors of supply and demand. In other words, a currency's value can be pegged to another country's currency, such as the U.S. dollar, or even to a basket of currencies. A country's currency value also may be fixed by the country's government. However, most countries float their currencies freely against those of other countries, which keeps them in constant fluctuation. The value of any particular currency is determined by market forces based on trade, investment, tourism, and geo-political risk. Every time a tourist visits a country, for example, he or she must pay for goods and services using the currency of the host country. Therefore, a tourist must exchange the currency of his or her home country for the local currency. Currency exchange of this kind is one of the demand factors for a particular currency. Another important factor of demand occurs when a foreign company seeks to do business with a company in a specific country. Usually, the foreign company will have to pay the local company in their local currency. At other times, it may be desirable for an investor from one country to invest in another, and that investment would have to be made in the local currency as well. All of these requirements produce a need for foreign exchange and are the reasons why foreign exchange markets are so large. Foreign exchange is handled globally between banks and all transactions fall under the auspice of the Bank of International Settlements. 4.4 The Origins Of Common Currency Symbols Let's take a look at some of the world's most heavily traded currencies and their origins. - The "Greenback" The roots of the dollar can be traced back to Spain. In 1785, the United States began using its own currency, and modeled it after that of Spain. Different theories surround the exact origin of the $, but some experts have labeled the sign as an abbreviation for the word "peso". Pesos was expressed as "ps" and transformed into the "S"

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with one line through it as a short version of the "p." One other theory proposes the double stroke version represents an acronym for the United States by placing a short-hand "U" atop the "S." - Euro The euro is the youngest currency on our list, but it took a long time to come about. The euro became the only currency in member states in 2002, however its origin can be traced to the Maastricht Treaty of 1991. As for the euro sign's origin, designers submitted their ideas and a winner was determined by way of polling and an eventual choice made by the European Commission. The Commission released a statement saying the sign for the euro was inspired by the Greek symbol epsilon. Epsilon is an "E" in English, representing the first letter of the word "Europe." The parallel lines across the epsilon are to certify the stability of the currency. - The Great British Pound Even though Great Britain is part of the eurozone, the pound is still around. The origins of the pound sign can be linked back to "libra," the Latin term for scales or balances. Theories abound on the origin of the term "pound sterling," but one point most currency experts agree on is the connection to weight and silver. The title seems quite fitting as the original British pound was designed as one pound of pure silver. - The "Swissie" The Swiss franc made its debut in 1798. The currency was being manufactured by approximately 75 groups, until eventually the federal government intervened. In 1848, the federal government deemed itself the only entity permitted to manufacture currency. The franc became the official currency of Switzerland in 1850. Years ago, France was probably the country most often associated with francs, but now the Swiss franc is the only franc still issued. Literally, "franc" translates to 100 centimes, the French equivalent of the word "cent". They say money makes the world go 'round, but what kind of money depends on what country you are in. Currency values may not be stable, but the currencies themselves have a habit of staying put. 5. Concepte cheie ale temei 6 - Currency - Specialised terminology - English Tenses – Articles 6. Întrebări de control şi teme de dezbatere Define the following terms: - currency - foreign exchange market

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7. Itemi model pentru teste de (auto)evaluare Decide if the sentences are true or false: 1. In a free economy, a country's currency is valued according to factors of supply and demand. 2.A currency's value can be pegged to another country's currency, such as the U.S. dollar, or even to a basket of currencies. 3.A country's currency value also may be fixed by the country's government. 4.The foreign exchange market is unique because of: - its huge trading volume, leading to high liquidity; - its geographical dispersion. 5. The foreign exchange market (forex, FX, or currency market) is a global, worldwide decentralized over-the-counter financial market for trading currencies. 6.Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. 7.The foreign exchange market determines the relative values of different currencies. 8. The primary purpose of the foreign exchange is to assist international trade and investment, by allowing businesses to convert one currency to another currency. 9. The sign for the euro was inspired by the Greek symbol epsilon.

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8.REZUMAT The Foreign exchange market is a large, growing and liquid financial market that operates 24 hours a day. It is not a market in the traditional sense because there is no central trading location or exchange. Most of the trading is conducted by telephone or through electronic trading networks. The primary market for currencies is the interbank market where banks, insurance companies, large corporations and other large financial institutions manage the risks associated with fluctuations in currency rates. 9.Temă de casă Realizarea unui portofoliu : The Basics of the Foreign Exchange Market 10.Bibliografie recomandată - Barbu Adina, Chirimbu Sebastian ( 2007) : English Language for Daily Use, Editura Fundaţiei România de Mâine, Bucureşti - Niculescu Andrei (coordonator) (2007): The Language of Business, Editura Fundaţiei România de Mâine, Bucureşti - Bondrea Emilia, Mihăilă Ramona (coord.), Chirimbu Sebastian (co-autor) (2009): Aspecte ale civilizaţiilor europene, Editura Fundaţiei România de Mâine, Bucureşti - Vasilescu Ruxandra (coord.) (2008): Dicţionar de termeni economici român-englez-francez-spaniol , Editura Polirom, Iaşi Opţional: - Chirimbu Despina(2008): Discurs economic în limba engleză (suport pentru cursul opţional/ versiune print sau online), USH

UNITATEA DE ÎNVĂŢARE 7

LOANS Learning Units:

The history of loans/ Modern banking loans

1. Introducere A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount. 2. Competenţele specifice disciplinei (subsumate prezentei teme/unităţi de învăţare) - Dezvoltarea celor patru competenţe lingvistice: înţelegerea textului, redactare (comentarii, scrisori, eseuri etc.), comunicare verbală, înţelegere orală; - Elaborarea unor fişe de lucru personale, elaborarea unor portofolii cu tematică dată; - Cultivarea creativităţii în aplicara competenţelor lingvistice dobândite; - Adaptarea noţiunilor dobândite la limbajul specific profilul nefilologie (financiar-bancar); - Valorificarea optimă şi creativă a competenţelor lingvistice dobândite; - Realizarea de interacţiuni în comunicarea orală sau scrisă în limba engleză. 3. Timpul alocat Timpul alocat parcurgerii temei în cadrul cursului practic de limba engleză: 1,5h 4. Conţinutul temei 7 Exploatarea limbii engleze pe baza textelor didactice din bibliografia obligatorie (propuse pe grade de dificultate). Exploatarea limbii se va face prin intermediul discuţiilor, dezbaterilor, lucrului în grup şi individual precum şi a exerciţiilor. 4.1 A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the

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lender and the borrower. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount. The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent. Acting as a provider of loans is one of the principal tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a typical source of funding. 4.2 A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan. A subsidized loan is a loan that will not gain interest before you begin to pay it. It is known to be used at multiple colleges. An unsubsidized loan is a loan that gains interest the day of disbursement. A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security — a lien on the title to the house — until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it. In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter — often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer. A type of loan especially used in limited partnership agreements is the recourse note. A stock hedge loan is a special type of securities lending whereby the stock of a borrower is hedged by the lender against loss, using options or other hedging strategies to reduce lender risk.

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A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based on the merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases are eligible for a pre-settlement loan.This is considered a secured non-recourse debt because if the case reaches a verdict in favor of the defendant the loan is forgiven. 4.3 Unsecured loans are monetary loans that are not secured against the borrower's assets. These may be available from financial institutions under many different guises or marketing packages: • credit card debt • personal loans • bank overdrafts • credit facilities or lines of credit • corporate bonds (may be secured or unsecured) The interest rates applicable to these different forms may vary depending on the lender and the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974. 5. Concepte cheie ale temei 7 - Loans - Specialised terminology - English Tenses – Comparison (Adjectives, Adverbs) 6. Întrebări de control şi teme de dezbatere Define the following terms: - Secured loans - Unsecured loans

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7. Itemi model pentru teste de (auto)evaluare Decide if the sentences are true or false: 1.A secured loan is a loan in which the borrower pledges some asset as collateral for the loan. 2.In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. 3.Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount. 4.Acting as a provider of loans is one of the principal tasks for financial institutions. 8. REZUMAT An arrangement in which a lender gives money or property to a borrower, and the borrower agrees to return the property or repay the money, usually along with interest, at some future point(s) in time. Usually, there is a predetermined time for repaying a loan, and generally the lender has to bear the risk that the borrower may not repay a loan (though modern capital markets have developed many ways of managing this risk). 9. Temă de casă Realizarea unui portofoliu : Market loans in Romania 10. Bibliografie recomandată - Barbu Adina, Chirimbu Sebastian ( 2007) : English Language for Daily Use, Editura Fundaţiei România de Mâine, Bucureşti - Niculescu Andrei (coordonator) (2007): The Language of Business, Editura Fundaţiei România de Mâine, Bucureşti - Bondrea Emilia, Mihăilă Ramona (coord.), Chirimbu Sebastian (co-autor) (2009): Aspecte ale civilizaţiilor europene, Editura Fundaţiei România de Mâine, Bucureşti - Vasilescu Ruxandra (coord.) (2008): Dicţionar de termeni economici român-englez-francez-spaniol , Editura Polirom, Iaşi Opţional: - Chirimbu Despina(2008): Discurs economic în limba engleză (suport pentru cursul opţional/ versiune print sau online), USH

UNITATEA DE ÎNVĂŢARE 8 INVESTMENT Learning Units:

Investment / Investment related to business of a firm - business management

1. Introducere In finance, investment means the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, it means the use money in the hope of making more money. In business, the purchase by a producer of a physical good, such as durable equipment or inventory, in the hope of improving future business. 2. Competenţele specifice disciplinei (subsumate prezentei teme/unităţi de învăţare) - Dezvoltarea celor patru competenţe lingvistice: înţelegerea textului, redactare (comentarii, scrisori, eseuri etc.), comunicare verbală, înţelegere orală; - Elaborarea unor fişe de lucru personale, elaborarea unor portofolii cu tematică dată; - Cultivarea creativităţii în aplicara competenţelor lingvistice dobândite; - Adaptarea noţiunilor dobândite la limbajul specific profilul nefilologie (financiar-bancar); - Valorificarea optimă şi creativă a competenţelor lingvistice dobândite; - Realizarea de interacţiuni în comunicarea orală sau scrisă în limba engleză. 3. Timpul alocat Timpul alocat parcurgerii temei în cadrul cursului practic de limba engleză: 2h 4. Conţinutul temei 8 Exploatarea limbii engleze pe baza textelor didactice din bibliografia obligatorie (propuse pe grade de dificultate). Exploatarea limbii se va face prin intermediul discuţiilor, dezbaterilor, lucrului în grup şi individual precum şi a exerciţiilor. 4.1 Investment is putting money into something with the expectation of profit. More specifically, investment is the commitment of

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money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest, dividends, or appreciation of the value of the instrument (capital gains). It is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance whether for households, firms, or governments. An investment involves the choice by an individual or an organization, such as a pension fund, after some analysis or thought, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign currency, that has certain level of risk and provides the possibility of generating returns over a period of time. Investment comes with the risk of the loss of the principal sum. The investment that has not been thoroughly analyzed can be highly risky with respect to the investment owner because the possibility of losing money is not within the owner's control. The difference between speculation and investment can be subtle. It depends on the investment owner's mind whether the purpose is for lending the resource to someone else for economic purpose or not. In the case of investment, rather than store the good produced or its money equivalent, the investor chooses to use that good either to create a durable consumer or producer good, or to lend the original saved good to another in exchange for either interest or a share of the profits. In the first case, the individual creates durable consumer goods, hoping the services from the good will make his life better. In the second, the individual becomes an entrepreneur using the resource to produce goods and services for others in the hope of a profitable sale. The third case describes a lender, and the fourth describes an investor in a share of the business. In each case, the consumer obtains a durable asset or investment, and accounts for that asset by recording an equivalent liability. As time passes, and both prices and interest rates change, the value of the asset and liability also change. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. The word originates in the Latin "vestis", meaning garment, and refers to the act of putting things (money or other claims to resources) into others' pockets. The basic meaning of the term being an asset held to have some recurring or capital gains. It is an asset that is expected to give returns without any work on the asset per se. The term "investment" is used differently in economics and in finance. Economists refer to a real investment (such as a machine or a house), while financial economists refer to a financial asset, such as money that is put into a bank or the market, which may then be used to buy a real asset.

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4.2 In economic theory or in macroeconomics, investment is the amount purchased per unit time of goods which are not consumed but are to be used for future production. Examples include railroad or factory construction. Investment in human capital includes costs of additional schooling or on-the-job training. Inventory investment refers to the accumulation of goods inventories; it can be positive or negative, and it can be intended or unintended. In measures of national income and output, gross investment (represented by the variable I) is also a component of Gross domestic product (GDP), given in the formula GDP = C + I + G + NX, where C is consumption, G is government spending, and NX is net exports. Thus investment is everything that remains of total expenditure after consumption, government spending, and net exports are subtracted (i.e. I = GDP - C - G - NX). Non-residential fixed investment (such as new factories) and residential investment (new houses) combine with inventory investment to make up I. Net investment deducts depreciation from gross investment. Net fixed investment is the value of the net increase in the capital stock per year. Fixed investment, as expenditure over a period of time ("per year"), is not capital. The time dimension of investment makes it a flow. By contrast, capital is a stock— that is, accumulated net investment to a point in time (such as December 31). Investment is often modeled as a function of Income and Interest rates, given by the relation I = f(Y, r). An increase in income encourages higher investment, whereas a higher interest rate may discourage investment as it becomes more costly to borrow money. Even if a firm chooses to use its own funds in an investment, the interest rate represents an opportunity cost of investing those funds rather than lending out that amount of money for interest. 4.3 The investment decision (also known as capital budgeting) is one of the fundamental decisions of business management: Managers determine the investment value of the assets that a business enterprise has within its control or possession. These assets may be physical (such as buildings or machinery), intangible (such as patents, software, goodwill), or financial (see below). Assets are used to produce streams of revenue that often are associated with particular costs or outflows. All together, the manager must determine whether the net present value of the investment to the enterprise is positive using the marginal cost of capital that is associated with the particular area of business.

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In terms of financial assets, these are often marketable securities such as a company stock (an equity investment) or bonds (a debt investment). At times, the goal of the investment is to produce future cash flows, while at others it may be for the purpose of gaining access to more assets by establishing control or influence over the operation of a second company (the investee). Business firms or organisations raise funds from investors in the form of equites and debts (collectively known as the capital structure) and further reinvest it into various investment schemes by carefully analysing the returns in order to meet out their obligations relating to purchase of assets which provides them long term benefits. 4.4 In finance, investment is the commitment of funds by buying securities or other monetary or paper (financial) assets in the money markets or capital markets, or in fairly liquid real assets, such as gold or collectibles. Valuation is the method for assessing whether a potential investment is worth its price. Returns on investments will follow the risk-return spectrum. Types of financial investments include shares, other equity investment, and bonds (including bonds denominated in foreign currencies). These financial assets are then expected to provide income or positive future cash flows, and may increase or decrease in value yielding the investor capital gains or losses. Trades in contingent claims or derivative securities do not necessarily have future positive expected cash flows, and so are not considered assets, or strictly speaking, securities or investments. Nevertheless, since their cash flows are closely related to (or derived from) those of specific securities, they are often studied as or treated as investments. Investments are often made indirectly through intermediaries, such as banks, mutual funds, pension funds, insurance companies, collective investment schemes, and investment clubs. Though their legal and procedural details differ, an intermediary generally makes an investment using money from many individuals, each of whom receives a claim on the intermediary. Within personal finance, money used to purchase shares, put in a collective investment scheme or used to buy any asset where there is an element of capital risk is deemed an investment. Saving within personal finance refers to money put aside, normally on a regular basis. This distinction is important, as investment risk can cause a capital loss when an investment is sold, unlike saving(s) where the more limited risk is cash devaluing due to inflation.

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In many instances the terms saving and investment are used interchangeably, which confuses this distinction. For example many deposit accounts are labeled as investment accounts by banks for marketing purposes. Whether an asset is a saving(s) or an investment depends on where the money is invested: if it is cash then it is savings, if its value can fluctuate then it is investment.

4.5 The various types of investment are:

- Cash investments: These include savings bank accounts, certificates of deposit (CDs) and treasury bills. These investments pay a low rate of interest and are risky options in periods of inflation. - Debt securities: This form of investment provides returns in the form of fixed periodic payments and possible capital appreciation at maturity. It is a safer and more 'risk-free' investment tool than equities. However, the returns are also generally lower than other securities. - Stocks: Buying stocks (also called equities) makes you a part-owner of the business and entitles you to a share of the profits generated by the company. Stocks are more volatile and riskier than bonds.Take full advantage of options trading tools available online today. - Mutual funds: This is a collection of stocks and bonds and involves paying a professional manager to select specific securities for you. The prime advantage of this investment is that you do not have to bother with tracking the investment. There may be bond, stock- or index-based mutual funds. - Derivatives: These are financial contracts the values of which are derived from the value of the underlying assets, such as equities, commodities and bonds, on which they are based. Derivatives can be in the form of futures, options and swaps. Derivatives are used to minimize the risk of loss resulting from fluctuations in the value of the underlying assets (hedging). - Commodities: The items that are traded on the commodities market are agricultural and industrial commodities. These items need to be standardized and must be in a basic, raw and unprocessed state. The trading of commodities is associated with high risk and high reward. Trading in commodity futures requires specialized knowledge and in-depth analysis. - Real estate: This investment involves a long-term commitment of funds and gains that are generated through rental or lease income as well as capital appreciation. This includes investments into residential or commercial properties.

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5. Concepte cheie ale temei 8 - Investment(s) - Gross /net investment - Specialised terminology - English Verbs – modals 6. Întrebări de control şi teme de dezbatere Define the following terms: - Investment - Investment decision - Asset 7.Itemi model pentru teste de (auto)evaluare Decide if the sentences are true or false: 1. An investment involves the choice by an individual or an organization, such as a pension fund, after some analysis or thought, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign currency, that has certain level of risk and provides the possibility of generating returns over a period of time. 2. Investment comes with the risk of the loss of the principal sum. 3. The investment that has not been thoroughly analyzed can be highly risky with respect to the investment owner because the possibility of losing money is not within the owner's control. 4. The difference between speculation and investment can be subtle. It depends on the investment owner's mind whether the purpose is for lending the resource to someone else for economic purpose or not. 5. Within personal finance, money used to purchase shares, put in a collective investment scheme or used to buy any asset where there is an element of capital risk is deemed an investment. 6. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it.

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8.REZUMAT

Investment refers to the concept of deferred consumption, which involves purchasing an asset, giving a loan or keeping funds in a bank account with the aim of generating future returns. Various investment options are available, offering differing risk-reward trade offs. An understanding of the core concepts and a thorough analysis of the options can help an investor create a portfolio that maximizes returns while minimizing risk exposure.

9.Temă de casă Realizarea unui portofoliu : Various types of investment. 10.Bibliografie recomandată - Barbu Adina, Chirimbu Sebastian ( 2007) : English Language for Daily Use, Editura Fundaţiei România de Mâine, Bucureşti - Niculescu Andrei (coordonator) (2007): The Language of Business, Editura Fundaţiei România de Mâine, Bucureşti - Bondrea Emilia, Mihăilă Ramona (coord.), Chirimbu Sebastian (co-autor) (2009): Aspecte ale civilizaţiilor europene, Editura Fundaţiei România de Mâine, Bucureşti - Vasilescu Ruxandra (coord.) (2008): Dicţionar de termeni economici român-englez-francez-spaniol , Editura Polirom, Iaşi Opţional: - Chirimbu Despina(2008): Discurs economic în limba engleză (suport pentru cursul opţional/ versiune print sau online), USH

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