3.5 Banking and Finance - Commercial Banking

A ... (1) usually pays a little or no interest, but allows the holder to ... (2) his or her cash with no restrictions.

1) current account 2) withdraw

Commercial banks are businesses that trade in money. They receive and hold ... (1), pay money according to ... (2) instructions, ... (3) money, etc.

1) deposits 2) customers 3) lend

In order to ... (1) the return on their assets (loans), bankers have to find a balance between yield and risk, and ... (2) and different maturities, and to match these with their ... (deposits) (3).

1) optimize 2) liquidity 3) liabilities

An ... (1) is an arrangement by which a customer can overdraw an account, i.e. run up a debt to an agreed limit; interest on the ... (2) is calculated daily.

1) overdraft 2) debt

... and directs debits are ways of paying regular bills at regular intervals.

Standing orders

There are still many people in Britain who do not have bank...

accounts.

Deposit accounts pay interest. They do not usually provide ... facilities, and notice is often required to withdraw money.

cheque

They are also able to lend more money than they receive in deposits because ... rarely withdraw all their money at the same time.

depositors

The maturity of a loan is how long it will last; the yield of a loan is its annual ... - how much money it pays - expressed as a percentage.

return

Non-manual workers, however, usually receive a monthly ... (1) in the form of a cheque or a ... (2) paid directly into their bank account.

1) salary 2) transfer

Banks offer both loans and overdrafts. A ... is a fixed sum of money, lent for a fixed period, on which interest is paid; banks usually require some form of security or guarantee before lending.

bank loan

Banks make a profit from the ... or differential between the interest rates they pay on deposits and those they charge on loans.

spread

Traditionally, factory workers were paid ... in cash on Fridays.

wages