English for F&A
1 Financial institutions
A mortgage = a loan to buy a property
A deposit = a sum of money paid into a bank account
A withdrawal = when you take money out of an account
A pension = money paid to a retired person
Shares or stocks = securities representing part-ownership of a company
A transfer = sending money form one bank account to another bank account
Capital = money invested in a business
Bonds = interest-paying securities issued by companies that need to borrow money
A takeover = when a company gains control of another company by buying its shares
A merger = when 2 companies join together
Building societies = financial institutions that arrange mortgages
Retail banks = banks where individuals and companies keep bank deposits + make loans to
cover short-term outlays and in some cases longer-term investment
Insurance companies = provide life insurance of pensions
Investment banks of merchant banks = they only deal with big companies. They give financial
advice, arrange mergers and help to raise capital.
Universal banks = they offer a lot of services and are not specialized
City of London = financial heart (like Wall Street)
Central banks:
• Supervise the banking system
• Fix the minimum interest rate
• Issue bank notes
• Control the money supply
• Influence exchange rates
• Act as a lender of last resort
Commercial banks (=retail banks):
• = businesses that trade in money
• Receive and hold deposits in current and savings accounts
• Pay money according to customers’ instructions
• Lend money
• Offer investment advice
,Universal banks:
• Combine
o Loan banking
o Share and bond dealing
o Investment advice
o …
Merchant banks:
• Raising funds for industry on the various financial markets
• Financing international trade
• Issuing and underwriting securities
• Dealing with takeovers and mergers
• Issuing government bonds
• Stockbroking
• Portfolio management services
Building societies:
• Provide mortgages
o They lend money to homebuyers on the security of houses and flats
• Attract savers by paying higher interest rates than the banks
A current or checking account usually pays little or no interest but allows the holder to withdraw
his or her cash with no restrictions.
A direct debit = an instruction to a bank to pay varying sums of money to another account on
particular dates
A standing order = an instruction to a bank to pay regular, fixed sums of money to another
account
A bank loan = a fixed sum of money lent for a fixed period on which interest is paid
An overdraft = an arrangement allowing someone to borrow money by withdrawing more than
they have deposited in their account, up to a certain limit
A balance = the amount of money in a bank account at a particular time
Maturity of a loan = how long it will last
Yield of a loan = its annual return (how much money it pays), expressed as a %
A bank statement lists the recent debits and credits in a bank account.
Investment banks:
• Act as intermediaries between companies and investors
• They help companies and governments to raise capital by issuing securities
• They often underwrite securities
o = they guarantee to buy the securities themselves if they can’t find other buyers
IPO = initial public offering, it’s when a company issues shares to the public for the first time
,Investment funds = companies that invest the money of lots of small investors
Pension funds = companies that invest money that will later be paid to retired workers
Broking = buying and selling stocks for clients
Dealing = trading with their own money
A divestiture = when a company sells a subsidiary
2 Investment products
Volatile = value goes up and down
Investment products:
• Stocks
• Bonds
• Options
• Other financial instruments
Shares:
• Represent ownership of a company
• Companies issue shares to raise money
• Shares can appreciate or depreciate in value
• Riskier investment product
2 ways of making money with shares:
1. Buying shares, waiting for them to increase in value and then selling them for a profit
2. Buying shares and receiving dividends
Bonds:
• Issued by companies to finance operations
• Issued by governments to fund expenses
• = debt obligations
• Investors who buy bonds are actually lending money to the company/government
o In exchange they get interests
• More safe investment product
Treasury bills:
• = short term debt obligations issued by the US government
• Typically have a maturity of 1 year or less
• Very low-risk investment product
Mutual funds:
• = a professionally managed portfolio that pools money from investors, using thet money
to invest in various assets
• Investments in mutual funds are inherently diversified (van nature divers)
Securities = a tradable financial asset of any kind
, A commodity = a raw material or primary agricultural product that can be bought and sold (e.g.
copper or coffee)
A principal = the original amount of money borrowed from a lender that must be repaid, usually
with interest
A currency =the money unit used in a particular country like euro or dollar
A fringe benefit = an extra benefit for an employee such as a company car or lunch vouchers
Municipal bonds = documents issued by a local government authority promising to repay loans
at a certain time
An appreciation = an increase in value of an asset
A mutual fund = a professionally managed collection of stocks, bonds and/or other securities
A portfolio = all the securities and financial assets held by an individual of a financial institution
A maturity date = the date on which a loan must be repaid
3 Business finance
3.1 Internal & external financing
Internal finance comes from the owners of the company.
• Inflexible way → profits take time to develop
External finance comes from external sources.
• Interest payments
3.2 Sources of credit
Different ways to raise money:
• A small business can borrow money from family and friends
• Large companies can raise finance by issuing shares → they often have thousands of
different shareholders
• A business can also take out a loan form a bank or financial institution.
• An overdraft facility with a bank
• Government grants
o = government funds which are made available to businesses that meet certain
conditions
• A small business can also raise money by taking on a partner
o Profits must be shared
• Venture capital
o Larger businesses with cash to spare put funds into small and medium-sized
enterprises
A loan = a sum of money lent for a given period of time, repayment is made with interest
Different ways to finance expenditures:
• Leasing equipment
1 Financial institutions
A mortgage = a loan to buy a property
A deposit = a sum of money paid into a bank account
A withdrawal = when you take money out of an account
A pension = money paid to a retired person
Shares or stocks = securities representing part-ownership of a company
A transfer = sending money form one bank account to another bank account
Capital = money invested in a business
Bonds = interest-paying securities issued by companies that need to borrow money
A takeover = when a company gains control of another company by buying its shares
A merger = when 2 companies join together
Building societies = financial institutions that arrange mortgages
Retail banks = banks where individuals and companies keep bank deposits + make loans to
cover short-term outlays and in some cases longer-term investment
Insurance companies = provide life insurance of pensions
Investment banks of merchant banks = they only deal with big companies. They give financial
advice, arrange mergers and help to raise capital.
Universal banks = they offer a lot of services and are not specialized
City of London = financial heart (like Wall Street)
Central banks:
• Supervise the banking system
• Fix the minimum interest rate
• Issue bank notes
• Control the money supply
• Influence exchange rates
• Act as a lender of last resort
Commercial banks (=retail banks):
• = businesses that trade in money
• Receive and hold deposits in current and savings accounts
• Pay money according to customers’ instructions
• Lend money
• Offer investment advice
,Universal banks:
• Combine
o Loan banking
o Share and bond dealing
o Investment advice
o …
Merchant banks:
• Raising funds for industry on the various financial markets
• Financing international trade
• Issuing and underwriting securities
• Dealing with takeovers and mergers
• Issuing government bonds
• Stockbroking
• Portfolio management services
Building societies:
• Provide mortgages
o They lend money to homebuyers on the security of houses and flats
• Attract savers by paying higher interest rates than the banks
A current or checking account usually pays little or no interest but allows the holder to withdraw
his or her cash with no restrictions.
A direct debit = an instruction to a bank to pay varying sums of money to another account on
particular dates
A standing order = an instruction to a bank to pay regular, fixed sums of money to another
account
A bank loan = a fixed sum of money lent for a fixed period on which interest is paid
An overdraft = an arrangement allowing someone to borrow money by withdrawing more than
they have deposited in their account, up to a certain limit
A balance = the amount of money in a bank account at a particular time
Maturity of a loan = how long it will last
Yield of a loan = its annual return (how much money it pays), expressed as a %
A bank statement lists the recent debits and credits in a bank account.
Investment banks:
• Act as intermediaries between companies and investors
• They help companies and governments to raise capital by issuing securities
• They often underwrite securities
o = they guarantee to buy the securities themselves if they can’t find other buyers
IPO = initial public offering, it’s when a company issues shares to the public for the first time
,Investment funds = companies that invest the money of lots of small investors
Pension funds = companies that invest money that will later be paid to retired workers
Broking = buying and selling stocks for clients
Dealing = trading with their own money
A divestiture = when a company sells a subsidiary
2 Investment products
Volatile = value goes up and down
Investment products:
• Stocks
• Bonds
• Options
• Other financial instruments
Shares:
• Represent ownership of a company
• Companies issue shares to raise money
• Shares can appreciate or depreciate in value
• Riskier investment product
2 ways of making money with shares:
1. Buying shares, waiting for them to increase in value and then selling them for a profit
2. Buying shares and receiving dividends
Bonds:
• Issued by companies to finance operations
• Issued by governments to fund expenses
• = debt obligations
• Investors who buy bonds are actually lending money to the company/government
o In exchange they get interests
• More safe investment product
Treasury bills:
• = short term debt obligations issued by the US government
• Typically have a maturity of 1 year or less
• Very low-risk investment product
Mutual funds:
• = a professionally managed portfolio that pools money from investors, using thet money
to invest in various assets
• Investments in mutual funds are inherently diversified (van nature divers)
Securities = a tradable financial asset of any kind
, A commodity = a raw material or primary agricultural product that can be bought and sold (e.g.
copper or coffee)
A principal = the original amount of money borrowed from a lender that must be repaid, usually
with interest
A currency =the money unit used in a particular country like euro or dollar
A fringe benefit = an extra benefit for an employee such as a company car or lunch vouchers
Municipal bonds = documents issued by a local government authority promising to repay loans
at a certain time
An appreciation = an increase in value of an asset
A mutual fund = a professionally managed collection of stocks, bonds and/or other securities
A portfolio = all the securities and financial assets held by an individual of a financial institution
A maturity date = the date on which a loan must be repaid
3 Business finance
3.1 Internal & external financing
Internal finance comes from the owners of the company.
• Inflexible way → profits take time to develop
External finance comes from external sources.
• Interest payments
3.2 Sources of credit
Different ways to raise money:
• A small business can borrow money from family and friends
• Large companies can raise finance by issuing shares → they often have thousands of
different shareholders
• A business can also take out a loan form a bank or financial institution.
• An overdraft facility with a bank
• Government grants
o = government funds which are made available to businesses that meet certain
conditions
• A small business can also raise money by taking on a partner
o Profits must be shared
• Venture capital
o Larger businesses with cash to spare put funds into small and medium-sized
enterprises
A loan = a sum of money lent for a given period of time, repayment is made with interest
Different ways to finance expenditures:
• Leasing equipment
