London: World's Largest Financial Centre

London is the world's largest financial centre, with financial services based around two districts: 'The City' (the City of London) and the Docklands (particularly around Canary Wharf). The City houses the London Stock Exchange (shares and bonds), London Metal Exchange (base metal and plastic futures), Lloyds of London (insurance), and the Bank of England. The Docklands began development in the 1980s and is now home to the Financial Services Authority, as well as several important financial institutions (such as Barclays Bank, Citigroup and HSBC). There are now over 500 banks with offices in the City and Docklands, with the majority of business in London being conducted on an international basis, with established leads in areas such as Eurobonds, foreign exchange markets, energy futures and global insurance.

The UK has had an expanding export business in financial service, which has been influenced by a mixture of unique institutions, light regulation, and a highly skilled workforce.

The City of London is a geographically small city within Greater London in England. It is the historic core of London around which, along with Southwark and then Westminster, the modern conurbation grew. The City’s boundaries have remained almost constant since the Middle Ages, and hence it is now only a tiny part of the much larger London metropolis. It is often referred to as the City or the Square Mile, as it is just over one square mile in area. These terms are also often used as metonymies for the United Kingdom's financial services industry, which is based here.

The City is today a major business and financial centre, ranking on a par with New York City as the leading centre of global finance. In the 19th century the City served as the world's primary business centre. Today it has a resident population of under 10,000, whilst it employs 340,000 professional workers, mainly in the financial sector.

Text 8

1. Read the text and explain why the government of Great Britain abstains from joining the eurozone.

Great Britain and European Integration

The UK has had good relations with the rest of Europe since World War II. It became a member of the European Economic Community in 1973. The EEC eventually became the European Union through the Maastricht Treaty of the European Union in 1993. Although the UK does not use the euro and is not a member of the Eurozone, it still plays a leading role in the day to day workings of the EU.

As a member of the European Union, the United Kingdom could adopt the euro as its currency. However, the subject remains politically controversial. Gordon Brown, when Chancellor of the Exchequer, ruled out membership for the foreseeable future, saying that the decision not to join had been right for Britain and for Europe.

The government of former Prime Minister Tony Blair had pledged to hold a public referendum to decide on membership should "five economic tests" be met, to ensure that adoption of the euro would be in the national interest. In addition to these internal criteria, the UK would have to meet the EU's economic convergence criteria (Maastricht criteria), before being allowed to adopt the euro. Currently, the UK's annual government deficit, as a percentage of the GDP, is above the defined threshold. In February 2005, 55% of British citizens were against adopting the currency, with 30% in favour. The idea of replacing the pound with the euro has been controversial with the British public, partly because of its identity as a symbol of British sovereignty and because it would, according to critics, lead to suboptimal interest rates, harming the British economy. In December 2008 the results of a BBC poll of 1000 people suggested that 71% would vote "no", 23% would vote "yes" to joining the European single currency, while 6% said they were unsure. The pound did not join the Second European Exchange Rate Mechanism (ERM II) after the euro was created.

2. Answer the questions to the text:

1) When did the UK become a member state of the EU?

2) What is the national currency of the country?

3) Why does the government of Great Britain abstain from joining the eurozone?

4) What measures are taken by the government to ensure that adoption of the euro will be beneficial for the country?

5) What is the British public response to the idea of adopting the new currency?

3. Agree or disagree with the statements.

1) London is the world’s largest financial center with financial services based around three districts.

2) The UK has had an expanding export business in financial service.

3) The City of London is a geographically big city within Greater London.

4) The City is today a major business and financial center.

5) The UK became a member of the European Economic Community in 1983.

6) The UK uses the euro and is a member of the Eurozone.

7) The pound joined the Second European Exchange Rate Mechanism.

DEVELOPING VOCABULARY

1. Match up the words on the left with their definitions on the right:

1) expense 2) constituency 3) responsible 4) legislate 5) futures 6) competitive 7) stock exchange 8) revenue 9) authority 10) share 11) treaty

a) a place where securities are regularly traded b) a part or portion of something owned c) a person or group of people having the power or right to control, judge, or prohibit the actions of others d) to make or pass laws e) a formal agreement or contract between two or more parties f) the whole body of voters who elect one representative to a legislature or all the residents represented by one deputy g) being accountable for one's actions and decisions (to) h) income from a business enterprise, investment, property, etc i) a particular payment of money j) sufficiently low in price or high in quality to be successful against commercial rivals k) commodities or other financial products bought or sold at an agreed price for delivery at a specified future date

2. Complete the table with the derivatives of the given words.