1983-01-17 — Page 23

青敦備翻 真三第張六第日四初月二十年戌壬腦室

1983

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Economice (17)

5.K. Wong & L.T. Chan

Mifl & Dale Press Ltd.

ey and banking

Money

Central banks and Commercial bank

their functions and facilities

The functions of central

Se bank is

bank of government, It is set up by the government and is not profit-making. The implementation of policies in a central bank is directly controlled by the

government. Usually,

a central bank is the nationalized

institution which work with the government sto carry out the

monetary policy and to promote the economic development of the country. Its functions can be summarized as follows:

to issue legal tender

Currencies,

including banknotes and coins, are issued by the central bank under the supervision of

of

Poirculating – currencies cau

influence the purchasing power of the economy, government is responsible for adjusting the c amount of legal tender issued by the central bank.

In a complex monetary economy, money, serves as dynamic role in addition to being medium of exchange. Government may regulate the level or money

and liquidity in the

economy"; Boast achieve Bone desired policy objectives such the control of

growth in the Gross National Product and the improvement of balance of payments,

inflation, the N

to be the bank of government

Government”

revenue, are usually stored in the

central bank and

he public expenditure and payments are done through it. A central bank usually keeps the accounts of the government departments.

to be the advisor

"of government, on

financial and

monetary policies

The

The central bank

acts as the advisor of government in all the matters'

about monetary and bauking policies. The central bank may has a effective management team giving relevant information and suggestions to government so as to solve any economic problems and te help the economic development.

to keep the cash reserves of private banks

It is a law that ell the private banking institut- ions must deposit a part of their cash reserves in the central bank According, for central bank centralizes the cash reserves to protect the security and control the liquidity of the whole banking

System k

Whenever there is necessary for the private banks to horrow some Doney, the central bank will back them up leading then cash funds. If there is any financial crisis occurred in a private bank is responsible for supporting-it as far as possible in. order that national economic stability can be maintained.

5. to be a bank of

central clearance; settlement and transfer:

The central bank is the banker fr bank. It provides the facilities of clearance of cheques and the transfer of funda between banks. It is the place for the banks to clear their cheques received from their customers and drawn upon other banka, In such a case”. mutual indebtedness between the member banks may be cancelled and the amount owned to any banks would be calculated.

to supervise the operations of private banks

A central bank. takes the responsibility to help the government to carry out the banking laws and to Watch and direct the work done by private banka,

to “carry out monetary policy

The central bank controls the note issue, accepts deposite from and makes loans to the commercial banka and money market in such a way that it handles the main tool of monetary policy in a country. For instances

inflation can be tackled by the

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WAH KIU YAT PO

monetary authority

through control of.

the quantity of money which is circulating. In addition, governe ment can change the reserve ratio of the private banks or change the discount rate and the rate of interest by adjusting and banking so as to

monetary policy. to keen gold reserves, and

foreign exchange reserves of the country

In order to maintain the

stability of the external of the external value of the national. currency system, the central bank keeps the gold; reserves and foreign exchange reserves to under- take the open, market operation by law of exchange control..

9. to offer facilities

to customers as â commercial bank

does

The central bank also provides the general banking services to the customers such as acceptance of deposits, loans and advances,

remittance and other services;

11. The function and

facilities provide commercial banks

A commercial bank is a profit-marking firm operated by private individuals. It is established for the purpose of seeking profite by way of offering various banking services. Banking lawa and ordinances are set up to regulate the working targets of all commercial banks The commerical banks operate branches and directly deal with individual customers. They are operated under the supervision of government or central bank and play an active economic role. Their functions: can be summarized as follows:

to deep money for customers

Commercial banks provide the services that saving deposits "fixed deposits and

demand deposita are accepted. Different rates of interest are applied to various togeth

wi

ways of money

to lend money "customers

Loans and advances are grant ed to commerce and industry in order to earn the reward of intereat on one hand, and promote the industrial and

報日僑華

commercial

development on the other. The loans and advances

include short-term

and long-term

loans, advances, overdrafts and discount bill of exchange

Govern-

ment play the supervisory role to cover all deposit taking institut- ions.

to create bank credit

Either a central bank or a

commercial bank can bring about an increase of equal amount in bank deposits. In other words, when a bank

makes an advance to a customer, whether by overdraft or loan account the result is an

increase in total purchasing power

For example, if borrower has only

a small balance to the credit of his ̧ ̈ account and he obtains an overdraft of $500, He can draw a cheque for this account aud pay it to the creditor. If the creditør deposit it into his own account, the creditors account will have increased by $500. In this case, the borrower's account can only show s debit for this account. In the combined banks' balance sheet, advan and

deposits will have increase a $500. I

any monetary

screpancy happened, the

central bank should: have the power to control the expansion of bank credit.

to offer the service of -remittance.

your

Remittance means that the money transferred from one place to another. Imagine that you want sent BE$100 friend living in United States, you can ask for the help of the Remittance Depart- ment in any commercial bank. First of all, the Outward Remittance Depart- ment would calculate how many US dollara your 100гk dollars will buy on the foreign exchange market by referring to the day's exchange rate. If the rate is K$5 for US$1, your uk$1

bay US$20.

fore the bank will give you as bankdraft for US$20. Next, you can use o mail. transfer. That is. to say, the bank sends an airmail instruction to its. branch in United States to authorize

期星

日七十月一年三八九一层公年二十七幽民廠中

the branch to pay

your friend the sum

of the money. If it

is very urgent for

you to send the. amount of money, you can make use of the telegraph transfer although it would be more expensive.

to offer import and export facilities

Commercial banks offer u

special service onlkät Incumentary credit to help the promotion of business. It is the guarantee given by a bank that its customer will pay for a shipment of goods if the

correct documents are supplied as

evidence that the

shipment has been

made.

歷史(+七)

to the dynasty and let

it be overthrown, by ̈

revolutionaries like

Sun Yat-sen.

The provincial

authorities, seeing. the selfishness of the railway policy by the

lynasty heaped spread. anti-Manchu feeling, which therefore quickened the outbreak of the 1911 Revolution. The provincial:

lties did so

above)

because of

nationalist feeling 2. selfish desire for.

material benefits like railway owner- ship.

In an examination, it may be difficult for you. to work out all the above possibilities in a few minutes. And if you know nothing about the railway dispute, you will have no point to start. But

assuming what

that you know at the railway dispute is generally about, you should think in terms of

DATETIME** the possibilities like

HISTONY (17)

Philip Y., Yoo

MILLDALE PRESS LTD."

To what extent was the

dispute over railways between the Ching government and the provinces responsible.. for the outbreak of the 1911 Revolution in China?

This is a question that students answered some years ago, in a F5 exam, Scope

Evidently this is a question on the causes of the 1911 Revolution in China. But it calls for a special treatment. You must not list the different causes alone. Rather, you have to put emphasis on the cause

asked the

railway dispute, and then analyse other causes so as to compare them with that cause. The final aim

what has been described.

Then try to pattern these possiblities on the 1911 Revolution itself and see if they were true historically. Certainly, the provincial leaders (gentry, militarists and merchants) did not help the Ch'ing to suppress the revolutionaries after October 10, 1911. These provincial leaders did - not actively organizë the revolution, but their declarations of independ- ence from the dynasty in late 1911 and early 1912 had the same effect overthrowing the dynasty. Roth Grand D are alsoʻ true.

Presentation,

Normally, because the question expects you tō concentrate on the rail- way dispute, you can start start the essay by describing the railway

o show the importance dispute first, Then you

of that cause in a back- ground of other causes. The following are the logical questions that you should ask yourself before writing the essay 1. What was the railway.

dispute?

2. How did this railway

dispute contribute to the 1911 Revolution? 3. Was this railwaytig?

dispute itself suffi-

the cient to cause 1911 Revolution? If not, what other causes (of different types) were there?

How important was the railway dispute among the different causes of the 1911 Revolution?

Selection

Now try to focus your memory on the year: 1911, when the railway dispute occurred, if you know only the most general facts about it, you have no reason to worry, because other causes have to be included later.

- As for the link between this railway dispute and the 1911 Revolution, you should make use of your

common sense again. Think about the following possiblitics:

A. The provincial

authorities, angered by the railway. program, actively

· overthrew the dynasty.

B. The provincial

authorities, dis- appointed by the railwasserogram,

vithdrew their support.

報日僑華閱訂期長請

5 49 1 1 81

may say

1. that the railway

dispute was only one of the immediate causes surrounding the outbreak of the 1911 Revolution - so you can go on describing the other immediate causes briefly." 2. that

the immediate

could be traced

ca underlying

causes — so you can

go on analysing the underlying causes, Make sure that your discussion of the se immediate and underlying causes is concise and to-the-point. Make sure. that you have reserved enough time to draw a conclusion.

Conclusion.

In the conclusion, you have to go back to the railway dispute itself, for, after all, it is the railway dispute that the question is asking. You may say, "The railway dispute, in short, formed only part of the immedi- ate background surround- ing the 1911 Revolution, and these circumstances

were explanable only by the larger backgroung“ underlying causes of the revolution. The railway dispute itself did nut explain in full the events of the 1911

Revolution; other

factors, which we have.

dealt with, must indeed

be considered.

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