金融英语证书考试

金融英语证书

Part1overviewofthefinancialindustryinChina

Theyplayauniqueroleintheeconomythrough

mobilizingsavings,allocatingcapitalfundstofinance

productiveinvestment,transmittingmonetarypolicy,

providingapaymentsystemandtransformingrisks.

ThestatecouncildecidedtomakethePBCasacentral

bankwhichwascharacterizedbyamono-bank

engagedinbothpolicyandcommercialbanking

operations.

Thegovernmentintroducedacomprehensivepackage

ofmeasuresaimedatrestoringfinancialorderaswell

asaddressingtheinflationarypressureandsignsof

overheating,particularlyintherealestatectorand

thestockmarkets.

Thereformsincethenhasbeenfocudondeveloping

asoundandrobustfinancialsystemtoguardagainst

anddissolvefinancialrisks,cleaningupthe

balance-sheetsofthebanks,improvingtheirownership

structure,strengtheningtheircorporategovernance,

developingmarketinfrastructure,enhancing

supervisorycapacity,andfurtheropeningthebanking

ctortoforeignparticipation.

Thewhollystate-ownedcommercialbanks,namely,

restructuringtheirbalancesheets,establishing

corporategovernance,transformingtheiroperational

mechanisms,invitingstrategicinvestors,listingthemin

stockmarkets.

Apartfromthetraditionaldeposittakingandlending

business,commercialbanksnowofferabroadrangeof

intermediaryrvicessuchasinternationalttlement,

bankcards,personalbanking,andfinancialconsulting.

Astheeconomybecomesincreasinglycomplex,there

isanemergingneedfordevelopinguniversalbanking.

Untilrecently,foreignbankinginstitutionswereonly

allowedtooperateinthespecialeconomiczonesand

uragecompetitionformforeign

financialinstitutions,Chinahaxpandedthelistof

areasopentoforeignbankingestablishmentsto

bankinginstitutionsarenowengagedinlocalcurrency

businessin25majorcities.

Strengtheningbakingsupervisionhasbecomea

untriesincludingsome

advancedeconomieshavebeenpenalizedforweak

na,thistaskisparticularly

relevant,astheauthoritiesarewellawarethatthe

Chinefinancialsystemisfacedwithrisksassociated

witheconomictransition,inadditiontocreditand

marketriskscommontoallcountries

Continuedprogressinstructuralreforminthefinancial

ctorwillcontributetotheviabilityofcommercial

,furtherinterestrateliberalizationwill

enhancebanks’,freer

cross-bordercapitalmovementwillallowthemtoek

highreturnsanddiversifyrisksonamuchbroader

,greaterexchangerateflexibilitywill

facilitateexpansionofforeignexchangebusinessand

fostertheirabilitytomanageforeignexchangerisks.

Sharesarecertificatesorbookentriesreprenting

ownershipinacorporationorsimilarentity.

Bondsarewrittenevidencesofdebts.

Theprimarymarketisthatpartofthecapitalmarket

condmarketisthefinancialmarketfortradingof

curitiesthathavealreadybeenissuedinaninitial

privateorpublicoffering.

Bondsareformsofborrowingfirmscanundertakein

theformofmediumorlong-termcurity,which

commitsthemtospecificrepaymentdates,withfixed

onvariableinterest.

Treasurybonds,alsoknownasT-bonds,referto

couponbearinggovernmentcuritieswitharelatively

longermaturity.

Inpractice,notallriskscanbeinsured,andthe

insurabilityofagivenriskdependsonanumberof

factors:

aremeasurableinmonetaryterms.

rerisksareinsurable,

urermustbeabletocollecttogethera

sufficientlylargegroupofparateandindependent

exposureunitswhicharesubjecttobroadlysimilar

sothattheLawofLargeNumberscan

operateeffectively.

mustbefortuitous.

Part2supervisionofbankingandfinancialinstitutions

First,thekeyobjectiveofsupervisionistomaintain

stabilityandpublicconfidenceinthefinancialsystem.

Thecondgoalofbanksupervisionistoensurethat

banksoperateinasafeandsoundmannerandthat

theyholdcapitalandrervessufficienttocoverthe

risksthatmayariintheirbusiness.

Third,arelatedgoalistoprotectdepositors’fundsand

ifanybankshouldfail,tominimizethelosstobe

absorbedbythedepositinsurancefund.

Thefourthgoalofbanksupervisionistofosteran

efficientandcompetitivebankingsystemthatis

responsivetothepublic’sneedforhighqualityfinancial

rvicesatreasonablecost.

Thefifthandfinalgoalofbanksupervisionistoensure

compliancewithbankinglawsandregulations.

Risksofbank

Creditrisk

Amajortypeofriskthatbanksfaceiscreditriskorthe

failureofacounterparttoperformaccordingtoa

contractualarrangement.

Twospecificelementsofmarketriskareforeignexchange

riskandinterestraterisk

Banksfaceariskoflossinon-andoff-balancesheet

positionsarisingfrommovementsinexchangerates.

Interestrateriskreferstotheexposureofabank’s

financialconditiontoadvermovementsininterestrates.

Liquidityrisk

Liquidityriskarisfromtheinabilityofabankto

accommodatedecreasinliabilitiesortofundincreas

inasts.

Operationalrisk

Themostimportanttypesofoperationalriskinvolve

breakdownsininternalcontrolsandcorporate

governance.

Legalrisk

Banksaresubjecttovariousformsoflegalrisk,including

inadequateorincorrectlegaladviceordocumentationthat

mayresultinunexpecteddeclineinthevalueofastsor

unexpectedincreainthevalueofliabilities.

Reputationrisk

Reputationriskarisfromoperationalfailures,failureto

complywithrelevantlawsandregulations,orother

sources.

Prudentialrequirementscoverabroadspectrum

h,therearefivekeyareaswherethe

extensiveprudentialpolicieshavebeenimplemented

bybankregulatorsofmostcountries;thearecapital

adequacy,riskconcentration,astquality,liquidity

andinternalcontrols.

Minimumcapitaladequacyratiosarenecessaryto

reducetheriskoflosstodepositors,creditorsandother

stakeholderofthebankandtohelpsupervisorspursue

theoverallstabilityofthebankingindustry.

The1988Balaccord

Theaccordtsminimumcapitalratiorequirementsfor

internationallyactivebanksof4%capitaland8%total

capitalinrelationtorisk-weightedasts.

Tier1capitaliscorecapital,thatis,commonshares,plus

non-cumulativeperpetualpreferredshares,plusdisclod

rerves,lessgoodwill.

Tier2capitalconsistsofundisclodastrevaluation,and

generalprovisions(generalloan-loss)rerves,aswellas

hybriddebtcapitalinstruments,andsubordinatedterm

debt.

Thelimitsareusuallyexpresdintermsofa

percentageofbankcapitaland,althoughtheyvary,25%

ofcapitalistypicallythemostthatabankorbankinggroup

mayextendtoaprivatectornon-bankborrowerora

groupofclolyrelatedborrowerswithoutspecific

supervisoryapproval.

Astqualityisthemostimportantfactorin

determiningabank’screditworthiness.

Inadditiontoloans,balancesduefrombanks,

acceptancesandbillsofexchangeheld,aswellas

commitmentsliabilitieswhichsubjectabanktocredit

riskarealsoclassifiedinthesamewayinordertogivea

betterpictureonastquality.

Liquidity

Banksneedadequateliquiditytomeettheirobligations

whentheyfalldue,especiallywherethetimingand

amountofthecommitmentareuncertain,andto

majorobligationsinthiscontextaredemandfor

withdrawalsfromsightdeposits,timedeposits,and

commitmentstolendataspecificdate,unutilized

overdraftfacilitiesandinter-bankttlements.

Afterevaluatingthesixcriticalareasofthebank

throughthebankthroughparateratings,a

compositeCAMELSratingrangingfrom1to5is

establishedtoprovideanoveralljudgmentofabank’s

financialconditionandsoundness,whereas“C〞

standsforCapitaladequacy,“A〞forAstquality,

“M〞forManagement,“E〞forEarnings,“L〞for

Liquidityand“S〞forSensitivitytomarketrisk.