Although in both cases the cheque writer\'s account is debited and the cheque recipient\'s account is credited, it does not make sense for the two banks to make two separate inter-bank transactions between themselves. The clearing system calculates the net flows between the member clearing banks and these are the settlements that they make between themselves. Thus the system of clearing cheques represents another way society reduces the costs of making transactions.
The Balance Sheet of the London Clearing Banks.
Балансовый отчет лондонских клиринговых банков
Таbl. 7 shows the balance sheet of the London clearing banks. Although more complex, it is not fundamentally different from the balance sheet of the goldsmith-banker shown in Таbl 6. We\'ll begin by discussing the asset side of the balance sheet.
The Balance Sheet of the London Clearing Banks.
Sterling: Cash Bills and market loans
Lending in other currencies Miscellaneous assets
Sterling: Sight deposits
Deposits in other currencies Miscellaneous liabilities
Cash assets are notes and coin in the banks\' vaults. However, modem banks\' cash assets also include their cash reserves deposited with the Bank of England. The Bank of England (usually known as the Bank) isthe central bank or banker to the commercial banks.
Apart from cash, the other entries on the asset side of the balance sheet show money that has been lent out or used to purchase interest-earning assets. The second item,bills and market loans, shows short-term lending in liquid assets.
Liquidity refers to the speed and the certainty with which an asset can be converted back into money, whenever the asset-holders desire. Money itself is thus the most liquid asset of all.
The third item,advances, shows lending to households and firms. A firm that has borrowed to see it through a sticky period may not be able to repay whenever the bank demands. Thus, although advances represent the major share of clearing bank lending, they are not very liquid forms of bank lending. The fourth item,securities, shows bank purchases of interest-bearing hug-term financial assets. These can be government bonds or industrial shares. Although these assets are traded daily on the stock exchange, so in principle these securities can be cashed in any time the bank wishes, their price fluctuates from day to day. Banks cannot be certain how much they will get when they sell out. Hence financial investment in securities is also illiquid.
The final two items on the asset side of the balance sheet showlending in foreign currencies andmiscellaneous bank assets. Total assets of the London clearing banks were 200,1 billion. We now shall examine how the equivalent liabilities were made up.
Deposits are chiefly of two kinds: sight deposits and time deposits. Whereas sight deposits can be withdrawn on sight whenever the depositor wishes, a minimum period of notification must be given beforetime deposits can be withdrawn. Sight deposits are the bank accounts against, which we write cheques, thereby running down our deposits without giving the bank any prior warning. Whereas most banks do not pay interest on sight deposits or cheque (checking) accounts, they can afford to pay interest on time deposits. Since they have notification of any withdrawals, they have plenty of time to sell off some of their high- interest investments or call in some of their high-interest loans in order to have the money to pay out deposits.
Certificates of deposit (CDs) are an extreme form of time deposit where the bank borrows from the public for a specified period of time and knows exactly when the loan must be repaid. The final liability items in Таbl. 7 show deposits in foreign currencies, miscellaneous liabilities, such as cheques, in the process of clearing.
a financial intermediary - финансовый посредник
tobringtogether - соединять, сводить вместе
insurance companies - страховые компании
pension lands - пенсионные фонды
themoneystock - денежная масса, деньги в обращении
to issue deposits - открывать вклады
the National Girobank -англ. Национальный жиробанк
trusteesavingbanks - доверительные сберегательные банки
Londonclearingbanks - лондонские клиринговые банки (банки - члены расчетной палаты)
acentralclearinghouse - центральная расчетная палата
inter-bankaccounts - межбанковские счета
Barclays - Барклайз банк (Великобритания)
Lloyds - Ллойдз банк (Великобритания)
to credit - кредитовать
to debit - дебетовать
cheque recipient - получатель чека
cash assets - денежные активы
the Bank of England - Банк Англии, Английский банк
interest-earning(syn. interest-bearing) assets - активы, приносящие процентный доход
bills and market loans - векселя и рыночные займы
short-termlending - краткосрочное кредитование
liquid(ant. illiquid) assets - ликвидные активы
liquidity - ликвидность
advances - ссуда в вида аванса
a sticky period - трудный период
securities - ценные бумаги
interest-bearing long-term financial assets - долгосрочные финансовые активы, приносящие процентный доход
governmentbonds - государственные облигации
industrial shares - промышленные акции
the stock exchange - фондоваябиржа
niscellaneousbankassets - прочее имущество банка