The banking system of ukraine

The banking system of Ukraine dates to March 1991, when the Ukrainian Parliament passed the law 'On Banks and Banking Activities', determining this system as two-level, composed of the National Bank and commercial banks.

The National Bank of Ukraine is the central financial body of the state conducting a uniform national monetary, credit and currency policy, aiming to strengthen the national currency; organizing interbank settlements; and coordinating and supervising the whole banking system. Commercial banks varying in type and ownership are set up by legal entities and private persons as joint-stock companies. At present there are about 230 commercial banks in Ukraine. Two banks are state-owned (the Savings Bank and the Ukrainian Export-Import Bank), 41 banks are limited liability partnerships, 51 banks are closed joint-stock companies and the rest are open joint-stock companies. Their main functions include granting loans to businesses and individuals (backed by something valuable, like assets of enterprises, institutions, and organizations), cash transfers and payment services, currency exchange, and other banking transactions. The banking sector of Ukraine has a ramified system of correspondent accounts in foreign banks - about 3,800 accounts with 153 foreign banks, most of which are located in countries outside the CIS (Community of Independent States). Simultaneously, 91 non-resident banks operate around 1,600 correspondent accounts in Ukraine's banks. This supports the settlement of import-export operations.

Transition to international accounting and reporting standards beginning January 1,1998 was an important event for the Ukrainian banking system. It is currently adapting to the new international standards and the new reporting formats; the development and implementation of software has been completed.

Prominvestbank, Ukreximbank, Ukrsotsbank, Privatbank are the leading commercial banks in Ukraine. Of the overall number of banks, 22 are banks with foreign participation, including 6 wholly foreign-owned banks. There was founded the Ukrainian Interbank Currency Exchange which trades efficiently Ukrainian and foreign currencies and prevents significant fluctuations in the international value of the hryvnia.

To secure the banks' stability the National Bank of Ukraine resolved to increase the minimum amount of a commercial bank's own funds to one million of ECU, and an authorized stock of 3 million of ECU was set for the registration of newly established banks. Ukraine's banking strategy is to promote and stimulate commercial banks in solving economic and social problems in the country.

Vocabulary:

to strengthen – зміцнювати

settlement – здійснення розрахунків, оплата

to vary – варіюватися, змінюватися

legal entity – юридична особа

joint-stock company – акціонерне товариство

cash transfer – переказ готівки

currency exchange – обмін валют

ramified system – розгалужена система

to be located – бути розташованим

event – подія

software – програмне забезпечення

fluctuation – коливання

ECU (European currency unit) – ЕКЮ (європейська валютна одиниця)

authorized stock – номінальний капітал, дозволені для випуску акції

to solve problem – вирішувати проблему

Questions:

What is the National Bank of Ukraine?
How many commercial banks are there in Ukraine?
Who owns Ukrainian banks? What kinds of ownership are represented by the banks?
What are the main functions of banks?
What is a correspondent account?
What important event took place in 1998?
How does the National Bank of Ukraine secure the banks' stability?

THE BANK OF ENGLAND

Britain is a major financial centre, housing some of the world's leading banking, securities and other financial services and markets. The heart of the industry is the collection of banks and other financial institutions in and around the "Square Mile" in the City of London. This area has the greatest concentration of banks in the world - responsible for about 20 per cent of total international bank lending, the largest foreign exchange market in the world, with an average daily turnover of about $ 200,000 million.

The Bank of England is the central bank of the United Kingdom. Most countries have their own central bank: the Federal Reserve System in the United States, the Deutsche Bundesbank in Germany, the Banque de France, the Bank of Japan.

The Bank of England was founded in 1694 and it is one of the oldest central banks of the world. It started as a commercial bank with private shareholders, and developed a large private banking business, but after 1946 it began to act as public institution carrying out public functions. Now it is considered to be the government's bank. The Bank has always had the right to issue bank

notes in England and Wales, and acquired the monopoly after the Bank Charter Act of 1844. It is known as banker to both banks and the government increasing its influence on monetary policy. It accepts responsibility for advising the government to make the country's financial policy. The Bank also takes on a degree of responsibility for maintaining money and capital markets in London, and watches over the soundness of the banks.

The Bank's functions are: first, maintaining the value of the nation's money, mainly through policies and market operations agreed with the government, it regulates the money supply in the country which is one of the most important functions; second, ensuring the soundness of the financial system, including direct supervision of banks and participants in some City financial markets; and third, promoting the efficiency and competitiveness of the financial system, notably in the field of domestic and international payment and settlement systems, so that the City of London can serve industry and commerce at home and maintain its place as the world's leading international financial centre.

Vocabulary:

responsible –відповідальний

bank lending – банківське кредитування

average daily turnover – середній щоденний обіг

to be founded – бути заснованим

shareholder – акціонер

to act – діяти

public institution – громадська установа

to acquire – набувати

soundness – міцність

supervision – нагляд

participant – учасник