FINANCIAL MARKETS

FINANCIAL MARKETS

One of the most important financial markets is represented by the stock exchange

And the most famous one is the one existing in London. The exchange has a dominant position in international equity trading, particularly in the cross border securities. The security houses offer selling and buying prices for domestic securities, oversea securities; the prices are displayed on the information screens all over the world. London has regional offices. A great number of people own shares directly and indirectly (through collective investment schemes - pension funds, insurance investments).

The market is coordinated electronically and operates in three markets:

domestic equities (they include listed securities of large corporations and unlisted securities for smaller and growing companies)

gilt-edged stock (gilts are issued by the Bank of England under the government control; they are traded in a secondary market through exchange)

international equities

The money markets are directed between buyers and sellers which are banks, financial institutions, private persons. There is no physical market place; the negotiations are done by phone, automated dealing system, the financial instruments being CDs, bills of exchange, treasury bills, bonds.

Parallel markets are to be found and are known under names such as:

inter bank market (it lets the banks to deposit surplus cash with each other)

CDs market (it involves large companies, institutions; it deposits large surplus sums for a given rate of interest)

Commercial bills market (it deals with unsecured promissory notes, short term ones; these are issued by the companies listed on the Stock market)

Euro currency market (it deals with currencies lent outside the domestic market place; London and Tokyo are famous for these dealings)

The Foreign Exchange Market conducts transactions through the phone and data links between banks, financial institutions, firms, the brokers act as intermediaries. The quotes are given in many currencies for the buying and selling rates on a daily basis for all types of transactions.

Text comprehension

Answer following questions

Where is the most important financial market?

What do the security houses offer?

How are the prices displayed?

Do people own shares and how?

How the money market managed and which is are its elements?

How is the money directed?

Can you describe the parallel markets?

What do you know about the Free Market Exchange?

Banking vocabulary

Affiliate (afiliere)

Bank branch (filiala bancara)

Bond  (obligatiune)

Bearer ( purtator al unui cec sau cambii)

Bearer bond (titlu de valoare)

Bullion (lingouri de aur, argint, metale pretioase) 

Clearing cycle process (proces prin care, o plata, efectuata pe baza unui cec, este transferata  dintr-un cont in altul)

Clearing house (sistem centralizat si computerizat de stabilire a sumelor datorate reciproc)

CD  = Clearing deposits

Corporate bond  (obligatiune sau titlu de valoare care reprezinta un imprumut obisnuit)

Creditworthiness  (evaluarea capacitatii unei persoane/firme de a achita bunurile/serviciile primite )

Equity (activele nete ale unei companii, dupa ce u fost platiti toti creditorii)

Financial instruments (ocumente financiare)

Gilt edged security  (itlu de valoare cu dobanda fixa, emis de guvernul britanic sub forma obligatiunilor guvernamentale sau a bonurilor de tezaur)

To issue ( a emite)

Margin  (marja)

Share ( actiune ; parte sociala)

Stock(stoc de active; titlu de valoare cu dobanda fixa)

Subsidiary  (iliala, sucursala,)

Writing

Build up sentences using the above mentioned vocabulary