Money guarantees that there is always a double coincidence of wants .

pany's own bank and selling them through tile insurer's distribution channels.

, amount

When a Letter of Credit has been confirmed, the agent bank in the seller's country usually asks for the shipping documents, and often corite to the seller to say that they are willing to【21】a draft on them for the【22】. This draft (another name for Bill of Exchange) is often【23】to the shipping documents and is called a Documentary Bill of Exchange. Banks often state that the seller can【24】on them for the amount of the Credit.

A buyer or his bank may ask the seller if he is willing to allow them a period of 30, 60, or 90 days to pay. They may write. "can you present your drafts for 60 d/s?" this is a form. of【25】and allows the buyer time to pay. The agent bank will normally accept a draft【26】documents, because they need them to make sure that the title to【27】has been transferred.

Some times the bank demands a letter of【28】so that they have the right to sell the goods if the Bill of Exchange is【29】, that is, if the buyer or his bank do not pay. This does not apply to irrevocable documentary credit.

However, the bank can【30】the Bill of Exchange by deducting the interest for the period the draft has to go before maturity.

(11)

, handed

Goods should not be【21】direct to address of a bank or consigned to a bank without prior agreement on the part of that bank. In the event of goods being dispatched direct to the address of a bank or consigned to a bank for delivery to a drawee against payment or acceptance or upon other terms without prior agreement on the part of that bank, the bank has no obligation to take delivery of the goods, which remain at the risk and responsibility of the party dispatching the goods.

In practice, great careis【22】when goods ale consigned to the bank as large losses have【23】from incorrect procedures being followed.

Quite often, goods consigned to the bank will arrive by air before the supporting documents have been【24】. At this stage we will have little indication of the value of the collection other than the【25】value of the goods for customs purposes. It is therefore important that a letter of【26】is only【27】to the drawee who is undoubted and is【28】to sign an【29】undertaking to【30】the documents upon presentation regardless of the terms of those documents.

(11)

risks, savings, financial, funds, deposits, heart, complex, subject, appear,

repay, as, lose, reserve, returns, balance

Banks are crucial to a country's economy; they serve as the center point of the exchange of money throughout the economy. They gather【1】from small and large depositors, make loans, run the payments system, and coordinate【2】transactions. In developing countries, they usually are the【3】of the financial market and in industrial countries with【4】financial markets they still have a role as primary providers of financial services.

It is difficult for the layman to know if a bank is financially solid. Banks may【5】more solid than they really are. A bank that has loaned money to a borrower who is unable to【6】may keep the bad loan on its【7】sheet us long as possible, though the loan might never be paid back. Moreover, bank【8】are also somewhat precarious. A bank normally cannot refuse to accept deposits, but if, for whatever reason, its depositors【9】confidence in the bank's soundness, they may withdraw their【10】not only from that bank but also from other perfectly sound banks.

In seeking profits, banks lend on the basis of their customers' deposits, but not all deposits can be lent out. A certain share must be held in【11】. Competing institutions providing financial services are in a different situation since they are usually not【12】to reserve and prudential requirements. Firms selling equities do not promise fixed【13】and neither equities nor bonds are payable on demand,【14】are most bank deposits. Because of the pivotal role of banks and their vulnerability to unusual【15】, there seem to be good reasons to protect deposits through an appropriate insurance scheme and, in this way, to protect both the bank and the banking system.

(1)

holding banks with the state holding the controlling share and, when conditions permit, to be listed on the stock market.

increase, engage, capital, protect, failures, fail, interests, efficiently,

expensive, align, protect, insurance, defraud, losses, closes

Bank managers and owners must not be given incentives to【1】in behavior. detrimental to the whole banking system. They must either run their banks【2】or face failure. Deposit insurance is meant to【3】the banking system, not poorly run banks. The fact is that bank【4】are often self-inflicted by owners and managers who mismanage. Such losses can be reduced if the supervisor【5】the bank before it fails totally, since delaying a bank closing or sale tends to increase【6】and to spread them to the banking system as a whole.

Even without deposit insurance, bank managers may pursue their own【7】at the expense of the bank. But the problem gets worse with【8】. Managers may indulge in such excesses as high salaries,【9】buildings, and lavish furnishings. To combat this problem, managers could receive an "incentive-compatible contract" to【10】their interests with those of the owners. When the hank is sound, managers can best【11】their professional reputations by keeping it so. However, if a bank begins to【12】and no proper incentive exists to protect its【13】, managers may join owners in being prepared to gamble for recovery by making high-risk loans or to loot or【14】the bank. At that point deposit insurance could【15】their opportunities to do so.

(1)

persons held direct responsibility shall bear part of or all the liabilities for compensation.

investors and other borrowers; financial intermediaries; brokers and advisers; and regulators.