Theory and practical application of nominal clauses, adverbial clauses, direct & indirect speech in finance

h is introduced by some verb expressing commands and requests, and the Imperative Mood is changed into Infinitive Mood. For example : Mary said to John, “ Go away”. In this situation, you should use the pointer word “ order” to express the intention of the speaking. Therefore, the indirect speech should be: Mary ordered John to go away. Another example: “ Come and sitdown please” The monitor said. In indirect speech, you can use the word “ tell”: The monitor told them to come and sit down Besides, there are many other verbs we can use apart from said, told and asked. These include: accused, admitted, advised, alleged, agreed, apologised, begged, boasted, complained, denied, explained, implied, invited, offered, ordered, promised, replied, suggested and thought. Using them properly can make what you say much more interesting and informative. For example: He asked me to come to the party. He invited me to the party. He begged me to come to the party. He ordered me to come to the party. He advised me to come to the party. He suggested I should come to the party. Exclamation → That clause / Wh- clause In reporting exclamation and wishes, the Indirect Speech is introduced by some verb expressing Exclamation and Wishes. For example: Tom said, “ How clever I am? ” Tom exclaimed that he was very clever. Or: The teacher said, “ Lan! You have done well” → The techer applauded Lan, saying that she had done well. III.Practical application 1. Contrast the use of nominal clauses and adverbial clauses in finance ( clauses: nominal clauses; clauses: adverbial clauses) Articles Brazil set for interest rate rise Brazil’s central bank is expected to raise its core interest rate by as much as a full percentage point on Wednesday evening as the unexpectedly fast pace of economic growth puts increasing pressure on prices. Predictions for economic growth, inflation and interest rates at the end of 2010 have all risen sharply in recent weeks, adding to near-certainty among economists that the bank will raise its target overnight rate, known as the Selic, for the first time since September 10 2008 – less than a week before the collapse of Lehman Brothers and the ensuing global crisis took the pressure off an economy that was showing dangerous signs of overheating. The bubbles that burst round the developed world are a long way from reinflating but, in Brazil, many economists fear the economy may already be behaving much as it was 18 months ago. The central bank’s most recent survey of market economists, published on Friday, put the consensus for economic growth this year at 6 per cent – well above the 4.5 per cent or so that many economists regard as the potential, or non-inflationary, rate. That is even after factoring in an increase in the Selic rate from 8.75 per cent on Wednesday to 11.75 per cent by the end of the year – a full half point above the consensus just four weeks ago. Consumer price inflation is seen rising to 5.41 per cent a year, almost a point above the government’s target of 4.5 per cent. Henrique Meirelles, central bank governor, in an unprecedented signal of intent, said on Monday: “In situations like this one, we need a program of vigorous action.” His comments caused a spike in interest-rate futures contracts as many investors who had expected a half or three-quarter point increase on Wednesday evening began to see a full point rise as a real possibility. Some economists believe the central bank should have acted more quickly as inflationary pressures emerged some months ago. In a note to clients on Friday, Nick Chamie of RBC Capital Markets said he expected the actual rate of Brazil’s economic growth to overtake its potential rate during the second half of this year. “Given we are six-nine months away from the output gap closing (according to our estimates) and monetary policy tends to work with a 12 to 18-month time lag, it is fair to say the BCB is already behind the curve,” he wrote, describing the task facing the central bank of bringing inflation under control as “an enormous challenge”. However, others believe there is still room for sustainable growth. On Friday, Marcelo Salomon and Guilherme Loureiro of Barclays Capital wrote that “while inflation is clearly a source of concern and domestic demand growth has jumped back to the pre-crisis levels, there is still some spare capacity to be filled before we reach the same blistering pre-crisis conditions”. ( By Jonathan Wheatley in São Paulo –Finance Times) Analysis non- finite (to- infinitive cl) finite (clause of reason) finite (clause of result) non-finite (clause of time) non- finite (V_ing cl) non- finite (to-infinitive cl) finite (clause of reason) finite (zero that- clause) finite (zero that- clause) finite (clause of time) finite (clause of time) → complex sentences nominal clauses adverbial clauses frequency of nominal cls/ complex sentences frequency of adverbial cls/ complex sentences 10 5 6 50% 60% Articles Experts warn deficit could result in new crisis Strong majorities of former Republican and Democratic economic officials forecast the US will suffer another severe economic crisis unless it takes steps to rein in the country’s structural fiscal deficits, according to the Peterson Foundation, a non-partisan body. The survey, which questioned officials from eight former US administrations, coincided with the first day’s hearing of Barack Obama’s bipartisan fiscal commission, which will publish its proposals in December, shortly after the mid-term congressional elections. More than three-quarters of Republicans and Democrats who were surveyed predicted another big crisis within the next decade in the absence of tough measures to reverse America’s deteriorating fiscal outlook. In contrast to the views of many sitting lawmakers, a strong majority also agreed that any solution would require both tax increases and spending cuts. “For years folks in Washington deferred politically difficult decisions and avoided telling hard truths about the nature of the problem,” said Mr Obama yesterday. “This is going to require people of both parties to come together and take a hard look at the growing [fiscal] gap.” Few observers believe that the 18-member commission, which is co-chaired by Alan Simpson, a former Republican senator, and Erskine Bowles, a former chief of staff to Bill Clinton, the former US president, will come up with meaningful proposals, given the requirement that it produce 14 votes in favour of any recommendation. Any attempt to reduce long-term deficits, which are driven principally by America’s entitlement programmes, namely Medicare, Medicaid and Social Security, would require Democrats and Republicans to climb down from long-cherished positions. On Tuesday, Mr Simpson rejected charges by fellow Republicans that the commission was a “stalking horse for higher taxes”. He said: “We are stalking horses for our grandchildren. I have six. He [Mr Bowles] has seven.” He added: “I was in the Senate for 18 years and the cry to me was always: ‘Al, bring the bacon home’. Well, the pig has died.” Political analysts believe that it will be very difficult to get bipartisan consensus before the onset of another economic crisis. “When America is in crisis it acts,” said Bill Schneider, a political scientist at George Mason University. “But the fiscal problem is a bit like global warming. Unless, or until, disaster happens, it is very doubtful the political system will do anything about it,” he added. (By Edward Luce in Washington- Finance Times) Analysis finite (clause of condition) non- finite(cl of purpose) finite (that- clause) non-finite (V_ing cl) non-finite (to infinitive cl) non-finite (to infinitive cl) finite (that-cl) finite(that-cl) non finite (result cl) finite( cl of condition) finite(that-cl) → complex sentences nominal clauses adverbial clauses frequency of nominal cls/ complex sentences frequency of adverbial cls/ complex sentences 10 7 4 70% 40% Lending to businesses falls sharply Lending to private non-financial companies fell sharply in March and at a faster pace than seen over the previous six months, a shift that lenders attributed to low demand for credit from the corporate sector. Data from the British Bankers’ Association showed that lending to so-called PNFCs – whose activities form the backbone of the British economy – fell by £3bn in March, against an average monthly decline over the previous six months of £1.7bn. The availability of credit for the corporate sector has been among the chief concerns of economists and policymakers, even in the face of a clearly strengthening outlook for growth. “Lending to non-financial companies continued to contract annually, as company demand for credit remained subdued even though alternative capital funding has not been as prevalent in the first quarter,” the BBA said. On the housing front, lending picked up, although only slightly. The number of mortgage approvals rose to 35,000 in March from 33,400 in February, which was itself the lowest level for mortgage lending in 10 months. Meanwhile, homeowners stepped up the pace at which they are repaying their mortgages so that net mortgage lending – gross disbursements minus repayments – eased to £2.4bn in March from £2.7bn in February and was below the average level of the previous six months. “The muted BBA mortgage approvals data reinforce our suspicion that house prices will be erratic through 2010, and may very well be no better than flat over the year – particularly if more properties come on to the market thereby pushing the supply/demand balance more towards buyers from sellers,” said Howard Archer, economist at IHS Global Insight. Mr Archer said the strong rise in house prices seen over much of 2009 was “out of kilter” with overall economic fundamentals and was unsustainable. Net consumer credit also contracted slightly in March, according to the BBA, with repayments outstripping new borrowing. New spending on credit cards in March totalled £5.7bn, down from £5.8bn in February and in line with the average over the previous six months. New consumer loans for the month totalled £1.1bn, down from £1.3bn the month before. But the decline in consumer borrowing and net mortgage lending translated into rising deposits at banks. Total deposits rose by £4.7bn, up slightly from February and much higher than the £3.2bn average level seen over the previous six months. (By Norma Cohen – Finance Times) non-finite cl (V_ing cl) non-finite cl (to infinitive) non-finite (V_ing), (to-infinitive) finite cl(cl of concession) non-finite cl (verbless adverbial cl) finite cl (cl of result) finite cl (cl of condition) → complex sentences nominal clauses adverbial clauses frequency of nominal cls/ complex sentences frequency of adverbial cls/ complex sentences 8 4 4 50% 50% How to avoid higher home repayments With this week’s inflation figures showing further price increases, homeowners who are worried that interest rates will rise this year are now being offered mortgage deals that can protect them against higher repayments. Brokers are recommending a range of options: 1. Split loan deals: From Monday, HSBC will offer borrowers the option of a split loan mortgage that allows customers to fix either 25, 50 or 75 per cent of their loan, with the remaining percentage on a lifetime tracker rate. The fixed rate depends on the proportion of the mortgage that is fixed and the loan-to-value of the deal. Rates start from as low as 2.49 per cent for the 25 per cent fixed option at 70 per cent loan-to-value. The product has a £999 fee and is available to customers borrowing up to £500,000. “The rates on offer look very good,” said David Hollingworth of London & Country Mortgage Brokers. Mortgage brokers point out that many other lenders will allow borrowers to mix and match products and specify the split between fix and tracker. “However, you do need to watch out for the fees charged and check whether a fee is payable on each element of the loan,” said Hollingworth. 2. Switch and fix deals: Otherwise known as a “drop-lock” mortgage, these products allow borrowers to take out a tracker rate but then move on to a fixed-rate deal – with the same lender – without any early repayment charges. Nationwide Building Society and Royal Bank of Scotland (RBS) are among the few mortgage providers that currently offer the switch-and-fix option. However, Nationwide charges a reservation fee for the new fixed rate while RBS allows customers to switch free of charge provided they have been on the tracker for at least three months. Nationwide has a two-year tracker at 2.68 per cent – bank rate plus 2.18 per cent – available up to 70 per cent loan-to-value. RBS has a two-year tracker at 2.59 per cent – bank rate plus 2.09 per cent – at up to 60 per cent loan-to-value. The potential downside is that the lender’s fixed rates are likely to have risen by the time the borrower decides to switch. 3.Capped rate mortgages: A capped rate mortgage is another option that limits a borrower’s exposure to rising rates. Capped rates cannot climb above a pre-set rate, known as a cap. Brokers recommend a capped rate for about five years. Britannia/Co-op has a five-year deal at 2.99 per cent – bank base rate plus 2.49 per cent – with a cap of 5.99 per cent available up to 75 per cent loan-to-value. It comes with a £999 fee. “The best five-year tracker rate at 75 per cent loan-to-value is 2.84 per cent from ING so a borrower will not pay much of a premium – just 0.15 per cent – to have the security of the cap,” said Nigel Bedford of Largemortgageloans.com. 4. Interest rate insurance policy: RateGuard is an insurance policy offered by insurer MarketGuard that pays out a monthly sum if rates rise above a certain amount. Premiums are set according to the size of the mortgage and the rate insured. For example, protecting a £500,000 repayment tracker mortgage against a rate rise of more than 1 per cent costs £193 per month with a two-year policy. This drops to £55 per month if the policyholder wants to protect the same mortgage against a rise of more than 3 per cent. Brokers warn this option is likely to be the most expensive. (By Tanya Powley – Finance Times) finite cl (that- cl) nonfinite cl (to infinitive ) finite cl (that- cl) finite cl (yes-no interrogative cl) nonfinite cl (to infinitive finite cl (cl of time) nonfinite cl (to-infinitive) finite cl (that- cl) finite cl (cl of condition) nonfinite cl( to infinitive) finite cl (zero that-cl) → complex sentences nominal clauses adverbial clauses frequency of nominal cls/ complex sentences frequency of adverbial cls/ complex sentences 12 9 2 75% 16.6% ECB warns on sovereign debt crisis A top European Central Bank policymaker has intensified warnings of a “full-blown sovereign debt crisis” unless governments take ambitious steps to bring public finances under control, saying the UK, US and Japan faced an even greater challenge than the eurozone. The comments by Jürgen Stark, ECB executive board member – which echoed similar warnings by the International Monetary Fund – highlighted the spreading concerns sparked by the escalating crisis over Greece’s public debt. However, he played down the idea of the ECB offering Greece a lifeline in an extreme scenario by buying its government bonds. Speaking at a conference in Berlin, Mr Stark said fiscal concerns had become a “major concern” in the eurozone. But bringing public debt ratios back to safer levels appeared “even harder for the UK, the US and Japan. Given their high budget deficits and the high and rising debt levels, they must undertake very strong consolidation efforts to manage a reversal.” For the three years from 2009 to 2011, the public sector deficit was expected to exceed 6 per cent of gross domestic product in the eurozone, but more than 10 per cent in the US and UK, he said. Mr Stark warned that high government deficits would fuel fears about inflation, drive up interest rates and severely limit governments’ room for manoeuvre in future crises. “The onus is now on governments to ensure that the crisis that initially affected the financial sector, and subsequently the real economy, does not lead to a full-blown sovereign debt crisis. Averting it will require very ambitious and credible fiscal consolidation efforts.” His speech came as Jean-Claude Trichet, ECB president, arrived in Berlin to try to persuade German parliamentarians to back the joint eurozone/IMF rescue programme for Greece. Mr Trichet has urged eurozone politicians to “live up to their responsibilities” and argues that eurozone members share “a common destiny”. But Mr Stark appeared to rule out one option floated by economists – of the ECB itself buying Greek government bonds. This was not an issued being “discussed at present”, he told journalists in Berlin. In his speech, Mr Stark also pointed out how, even at the height of the post-Lehman Brothers economic crisis, the ECB had not made outright purchases of assets of government bonds – unlike other central banks. Meanwhile, Mr Stark argued that the eurozone private sector was not facing credit constraints. Instead, the decline in borrowing reflected the weakness of economic activity. The ECB’s latest bank lending survey, released on Wednesday, showed an unexpected weakening in demand for loans by companies in the first three months of this year – showing that a recovery in lending that started early in 2009 had gone into reverse. The results could add to worries about the fragility of the eurozone’s economic recovery . (By Ralph Atkins in Frankfurt – Finance Times) finite cl (cl of condition nonfinite cl (cl of time) nonfinite cl (V_ing cl) nonfinite cl (cl of circumstance) nonfinite cl (to-infinitive cl) finite cl (that-cl) finite cl (that-cl) → complex sentences nominal clauses adverbial clauses frequency of nominal cls/ complex sentences frequency of adverbial cls/ complex sentences 11 4 3 36.4% 27.3 % According to 5 financial articles from Finance Times, we can see that in general, the number of complex sentences in each article is quite large. In these complex sentence, there are quite many nominal clauses and adverbial clauses , in different subtypes and functions. This application may help the writers express the idea in more details because financial articles are often full of information of figures and explanations. Besides, each complex sentence above can include one or even two nominal or adverbial clauses, also can include both types. However, the tables show that the frequency of nominal clauses is bigger than that of adverbial clauses. Meanwhile, due to analyzing the five articles, we can jump to conclusion that both nominal and adverbial clauses are used widely in finance, but the nominal clause proves to appear much more. 3. Contrast the use of direct speech and indirect speech in finance (speech : indirect speech speech : direct speech) Brazil set for interest rate rise (By Jonathan Wheatley in São Paulo – Finance Times) Brazil’s central bank is expected to raise its core interest rate by as much as a full percentage point on Wednesday evening as the unexpectedly fast pace of economic growth puts increasing pressure on prices. Predictions for economic growth, inflation and interest rates at the end of 2010 have all risen sharply in recent weeks, adding to near-certainty among economists that the bank will raise its target overnight rate, known as the Selic, for the first time since September 10 2008 – less than a week before the collapse of Lehman Brothers and the ensuing global crisis took the pressure off an economy that was showing dangerous signs of overheating. The bubbles that burst round the developed world are a long way from reinflating but, in Brazil, many economists fear the economy may already be behaving much as it was 18 months ago. The central bank’s most recent survey of market economists, published on Friday, put the consensus for economic growth this year at 6 per cent – well above the 4.5 per cent or so that many economists regard as the potential, or non-inflationary, rate. That is even after factoring in an increase in the Selic rate from 8.75 per cent on Wednesday to 11.75 per cent by the end of the year – a full half point above the consensus just four weeks ago. Consumer price inflation is seen rising to 5.41 per cent a year, almost a point above the government’s target of 4.5 per cent. Henrique Meirelles, central bank governor, in an unprecedented signal of intent, said on Monday: “In situations like this one, we need a programme of vigorous action.” His comments caused a spike in interest-rate futures contracts as many investors who had expected a half or three-quarter point increase on Wednesday evening began to see a full point rise as a real possibility. Some economists believe the central bank should have acted more quickly as inflationary pressures emerged some months ago. In a note to clients on Friday, Nick Chamie of RBC Capital Markets said he expected the actual rate of Brazil’s economic growth to overtake its potential rate during the second half of this year. “Given we are six-nine months away from the output gap closing (according to our estimates) and monetary policy tends to work with a 12 to 18-month time lag, it is fair to say the BCB is already behind the curve,” he wrote, describing the task facing the central bank of bringing inflation under control as “an enormous challenge”. However, others believe there is still room for sustainable growth. On Friday, Marcelo Salomon and Guilherme Loureiro of Barclays Capital wrote that “while inflation is clearly a source of concern and domestic demand growth has jumped back to the pre-crisis levels, there is still some spare capacity to be filled before we reach the same blistering pre-crisis conditions”. -------------------------------------------- Total sentences Direct speech Frequency 13 4 30.7% Total sentences Direct speech Frequency 13 1 7.69% Experts warn deficit could result in new crisis (By Edward Luce in Washington –Finance Times) Strong majorities of former Republican and Democratic economic officials forecast the US will suffer another severe economic crisis unless it takes steps to rein in the country’s structural fiscal deficits, according to the Peterson Foundation, a non-partisan body. The survey, which questioned officials from eight former US administrations, coincided with the first day’s hearing of Barack Obama’s bipartisan fiscal commission, which will publish its proposals in December, shortly after the mid-term congressional elections. More than three-quarters of Republicans and Democrats who were surveyed predicted another big crisis within the next decade in the absence of tough measures to reverse America’s deteriorating fiscal outlook. In contrast to the views of many sitting lawmakers, a strong majority also agreed that any solution would require both tax increases and spending cuts. “For years folks in Washington deferred politically difficult decisions and avoided telling hard truths about the nature of the problem,” said Mr Obama yesterday. “This is going to require people of both parties to come together and take a hard look at the growing [fiscal] gap.” Few observers believe that the 18-member commission, which is co-chaired by Alan Simpson, a former Republican senator, and Erskine Bowles, a former chief of staff to Bill Clinton, the former US president, will come up with meaningful proposals, given the requirement that it produce 14 votes in favour of any recommendation. Any attempt to reduce long-term deficits, which are driven principally by America’s entitlement programmes, namely Medicare, Medicaid and Social Security, would require Democrats and Republicans to climb down from long-cherished positions. On Tuesday, Mr Simpson rejected charges by fellow Republicans that the commission was a “stalking horse for higher taxes”. He said: “We are stalking horses for our grandchildren. I have six. He [Mr Bowles] has seven.” He added: “I was in the Senate for 18 years and the cry to me was always: ‘Al, bring the bacon home’. Well, the pig has died.” Political analysts believe that it will be very difficult to get bipartisan consensus before the onset of another economic crisis. “When America is in crisis it acts,” said Bill Schneider, a political scientist at George Mason University. “But the fiscal problem is a bit like global warming. Unless, or until, disaster happens, it is very doubtful the political system will do anything about it,” he added. Total sentences Indirect speech Frequency 18 1 5.5% Total sentences Direct speech Frequency 18 10 55.5% Lending to businesses falls shar (By Norma Cohen ) Lending to private non-financial companies fell sharply in March and at a faster pace than seen over the previous six months, a shift that lenders attributed to low demand for credit from the corporate sector. Data from the British Bankers’ Association showed that lending to so-called PNFCs – whose activities form the backbone of the British economy – fell by £3bn in March, against an average monthly decline over the previous six months of £1.7bn. The availability of credit for the corporate sector has been among the chief concerns of economists and policymakers, even in the face of a clearly strengthening outlook for growth. “Lending to non-financial companies continued to contract annually, as company demand for credit remained subdued even though alternative capital funding has not been as prevalent in the first quarter,” the BBA said. On the housing front, lending picked up, although only slightly. The number of mortgage approvals rose to 35,000 in March from 33,400 in February, which was itself the lowest level for mortgage lending in 10 months. Meanwhile, homeowners stepped up the pace at which they are repaying their mortgages so that net mortgage lending – gross disbursements minus repayments – eased to £2.4bn in March from £2.7bn in February and was below the average level of the previous six months. “The muted BBA mortgage approvals data reinforce our suspicion that house prices will be erratic through 2010, and may very well be no better than flat over the year – particularly if more properties come on to the market thereby pushing the supply/demand balance more towards buyers from sellers,” said Howard Archer, economist at IHS Global Insight. Mr Archer said the strong rise in house prices seen over much of 2009 was “out of kilter” with overall economic fundamentals and was unsustainable. Net consumer credit also contracted slightly in March, according to the BBA, with repayments outstripping new borrowing. New spending on credit cards in March totalled £5.7bn, down from £5.8bn in February and in line with the average over the previous six months. New consumer loans for the month totalled £1.1bn, down from £1.3bn the month before. But the decline in consumer borrowing and net mortgage lending translated into rising deposits at banks. Total deposits rose by £4.7bn, up slightly from February and much higher than the £3.2bn average level seen over the previous six months. ----------------------------------------------- Total sentences Direct speech Frequency 14 2 14.2% . Total sentences Indirect speech Frequency 14 3 21.4% ECB warns on sovereign debt crisis(By Ralph Atkins in Frankfurt) A top European Central Bank policymaker has intensified warnings of a “full- blown sovereign debt crisis” unless governments take ambitious steps to bring public finances under control, saying the UK, US and Japan faced an even greater challenge than the eurozone. The comments by Jürgen Stark, ECB executive board member – which echoed similar warnings by the International Monetary Fund – highlighted the spreading concerns sparked by the escalating crisis over Greece’s public debt. However, he played down the idea of the ECB offering Greece a lifeline in an extreme scenario by buying its government bonds. Speaking at a conference in Berlin, Mr Stark said fiscal concerns had become a “major concern” in the eurozone. But bringing public debt ratios back to safer levels appeared “even harder for the UK, the US and Japan. Given their high budget deficits and the high and rising debt levels, they must undertake very strong consolidation efforts to manage a reversal.” For the three years from 2009 to 2011, “the public sector deficit was expected to exceed 6 per cent of gross domestic product in the eurozone, but more than 10 per cent in the US and UK”, he said. Mr Stark warned that high government deficits would fuel fears about inflation, drive up interest rates and severely limit governments’ room for manoeuvre in future crises. “The onus is now on governments to ensure that the crisis that initially affected the financial sector, and subsequently the real economy, does not lead to a full-blown sovereign debt crisis. Averting it will require very ambitious and credible fiscal consolidation efforts.” His speech came as Jean-Claude Trichet, ECB president, arrived in Berlin to try to persuade German parliamentarians to back the joint eurozone/IMF rescue programme for Greece. Mr Trichet has urged eurozone politicians to “live up to their responsibilities” and argues that eurozone members share “a common destiny”. But Mr Stark appeared to rule out one option floated by economists – of the ECB itself buying Greek government bonds. This was not an issued being “discussed at present”, he told journalists in Berlin. In his speech, Mr Stark also pointed out how, even at the height of the post-Lehman Brothers economic crisis, the ECB had not made outright purchases of assets of government bonds – unlike other central banks. Meanwhile, Mr Stark argued that the eurozone private sector was not facing credit constraints. Instead, the decline in borrowing reflected the weakness of economic activity. The ECB’s latest bank lending survey, released on Wednesday, showed an unexpected weakening in demand for loans by companies in the first three months of this year – showing that a recovery in lending that started early in 2009 had gone into reverse. The results could add to worries about the fragility of the eurozone’s economic recovery. ---------------------------------------------------- Total sentences Direct speech Frequency 18 4 22.2% Total sentences Indirect speech Frequency 18 5 27.7% How to avoid higher home repayments (By Tanya Powley ) With this week’s inflation figures showing further price increases, homeowners who are worried that interest rates will rise this year are now being offered mortgage deals that can protect them against higher repayments. Brokers are recommending a range of options: 1.Split loan deals: From Monday, HSBC will offer borrowers the option of a split loan mortgage that allows customers to fix either 25, 50 or 75 per cent of their loan, with the remaining percentage on a lifetime tracker rate. The fixed rate depends on the proportion of the mortgage that is fixed and the loan-to-value of the deal. Rates start from as low as 2.49 per cent for the 25 per cent fixed option at 70 per cent loan-to-value. The product has a £999 fee and is available to customers borrowing up to £500,000. “The rates on offer look very good,” said David Hollingworth of London & Country Mortgage Brokers. Mortgage brokers point out that many other lenders will allow borrowers to mix and match products and specify the split between fix and tracker. “However, you do need to watch out for the fees charged and check whether a fee is payable on each element of the loan,” said Hollingworth. 2. Switch and fix deals: Otherwise known as a “drop-lock” mortgage, these products allow borrowers to take out a tracker rate but then move on to a fixed-rate deal – with the same lender – without any early repayment charges. Nationwide Building Society and Royal Bank of Scotland (RBS) are among the few mortgage providers that currently offer the switch-and-fix option. However, Nationwide charges a reservation fee for the new fixed rate while RBS allows customers to switch free of charge provided they have been on the tracker for at least three months. Nationwide has a two-year tracker at 2.68 per cent – bank rate plus 2.18 per cent – available up to 70 per cent loan-to-value. RBS has a two-year tracker at 2.59 per cent – bank rate plus 2.09 per cent – at up to 60 per cent loan-to-value. The potential downside is that the lender’s fixed rates are likely to have risen by the time the borrower decides to switch. 3. Capped rate mortgages: A capped rate mortgage is another option that limits a borrower’s exposure to rising rates. Capped rates cannot climb above a pre-set rate, known as a cap. Brokers recommend a capped rate for about five years. Britannia/Co-op has a five-year deal at 2.99 per cent – bank base rate plus 2.49 per cent – with a cap of 5.99 per cent available up to 75 per cent loan-to-value. It comes with a £999 fee. “The best five-year tracker rate at 75 per cent loan-to-value is 2.84 per cent from ING so a borrower will not pay much of a premium – just 0.15 per cent – to have the security of the cap,” said Nigel Bedford of Largemortgageloans.com 4. Interest rate insurance policy: RateGuard is an insurance policy offered by insurer MarketGuard that pays out a monthly sum if rates rise above a certain amount. Premiums are set according to the size of the mortgage and the rate insured. For example, protecting a £500,000 repayment tracker mortgage against a rate rise of more than 1 per cent costs £193 per month with a two-year policy. This drops to £55 per month if the policyholder wants to protect the same mortgage against a rise of more than 3 per cent. Brokers warn this option is likely to be the most expensive. Total sentences Direct speech Frequency 24 3 12,5% Total sentences Indirect speech Frequency 24 1 4.16% In conclusion, through calculating the frequency of appearing the direct and indirect speech, we can see that in these articles, the author often uses the direct speech more than indirect speech. It can be explained that by quotating the words of experts or famous people really makes the articles more persuasive and attractive, especially newspapers about business. Therefore, using direct speech brings many benefits. Moreover, if the words of those people are too long, using the indirect speech to summarise the intention of the speakers is very essential. Consequently, it is a good idea to apply both direct and indirect speech into the articles. C. Conclusion By reviewing theory in a logical order and study the theory in practical application, we can understand all the definition, classification, functions and usages of nominal clauses, adverbial clauses, direct and indirect speech. All these structures have been proved that they are widely used in reality, in business, and more details, in the financial theme. D. Appendix I. References 1. A University Grammar of English by Randolph Quirk and Sidney Greenbaum. 2. A University Grammar of English – workbook (the same writers) 3. Fundamentals of English traditional syntax by Tran Huu Manh. II. Discourses ( from Finance Times) 1. Experts warn deficit could result in new crisis By Edward Luce in Washington Strong majorities of former Republican and Democratic economic officials forecast the US will suffer another severe economic crisis unless it takes steps to rein in the country’s structural fiscal deficits, according to the Peterson Foundation, a non-partisan body. The survey, which questioned officials from eight former US administrations, coincided with the first day’s hearing of Barack Obama’s bipartisan fiscal commission, which will publish its proposals in December, shortly after the mid-term congressional elections. More than three-quarters of Republicans and Democrats who were surveyed predicted another big crisis within the next decade in the absence of tough measures to reverse America’s deteriorating fiscal outlook. In contrast to the views of many sitting lawmakers, a strong majority also agreed that any solution would require both tax increases and spending cuts. “For years folks in Washington deferred politically difficult decisions and avoided telling hard truths about the nature of the problem,” said Mr Obama yesterday. “This is going to require people of both parties to come together and take a hard look at the growing [fiscal] gap.” Few observers believe that the 18-member commission, which is co-chaired by Alan Simpson, a former Republican senator, and Erskine Bowles, a former chief of staff to Bill Clinton, the former US president, will come up with meaningful proposals, given the requirement that it produce 14 votes in favour of any recommendation. Any attempt to reduce long-term deficits, which are driven principally by America’s entitlement programmes, namely Medicare, Medicaid and Social Security, would require Democrats and Republicans to climb down from long-cherished positions. On Tuesday, Mr Simpson rejected charges by fellow Republicans that the commission was a “stalking horse for higher taxes”. He said: “We are stalking horses for our grandchildren. I have six. He [Mr Bowles] has seven.” He added: “I was in the Senate for 18 years and the cry to me was always: ‘Al, bring the bacon home’. Well, the pig has died.” Political analysts believe that it will be very difficult to get bipartisan consensus before the onset of another economic crisis. “When America is in crisis it acts,” said Bill Schneider, a political scientist at George Mason University. “But the fiscal problem is a bit like global warming. Unless, or until, disaster happens, it is very doubtful the political system will do anything about it,” he added. 2. ECB warns on sovereign debt crisis By Ralph Atkins in Frankfurt A top European Central Bank policymaker has intensified warnings of a “full-blown sovereign debt crisis” unless governments take ambitious steps to bring public finances under control, saying the UK, US and Japan faced an even greater challenge than the eurozone. The comments by Jürgen Stark, ECB executive board member – which echoed similar warnings by the International Monetary Fund – highlighted the spreading concerns sparked by the escalating crisis over Greece’s public debt. However, he played down the idea of the ECB offering Greece a lifeline in an extreme scenario by buying its government bonds. Speaking at a conference in Berlin, Mr Stark said fiscal concerns had become a “major concern” in the eurozone. But bringing public debt ratios back to safer levels appeared “even harder for the UK, the US and Japan. Given their high budget deficits and the high and rising debt levels, they must undertake very strong consolidation efforts to manage a reversal.” For the three years from 2009 to 2011, the public sector deficit was expected to exceed 6 per cent of gross domestic product in the eurozone, but more than 10 per cent in the US and UK, he said. Mr Stark warned that high government deficits would fuel fears about inflation, drive up interest rates and severely limit governments’ room for manoeuvre in future crises. “The onus is now on governments to ensure that the crisis that initially affected the financial sector, and subsequently the real economy, does not lead to a full-blown sovereign debt crisis. Averting it will require very ambitious and credible fiscal consolidation efforts.” His speech came as Jean-Claude Trichet, ECB president, arrived in Berlin to try to persuade German parliamentarians to back the joint eurozone/IMF rescue programme for Greece. Mr Trichet has urged eurozone politicians to “live up to their responsibilities” and argues that eurozone members share “a common destiny”. But Mr Stark appeared to rule out one option floated by economists – of the ECB itself buying Greek government bonds. This was not an issued being “discussed at present”, he told journalists in Berlin. In his speech, Mr Stark also pointed out how, even at the height of the post-Lehman Brothers economic crisis, the ECB had not made outright purchases of assets of government bonds – unlike other central banks. Meanwhile, Mr Stark argued that the eurozone private sector was not facing credit constraints. Instead, the decline in borrowing reflected the weakness of economic activity. The ECB’s latest bank lending survey, released on Wednesday, showed an unexpected weakening in demand for loans by companies in the first three months of this year – showing that a recovery in lending that started early in 2009 had gone into reverse. The results could add to worries about the fragility of the eurozone’s economic recovery. 3. Brazil set for interest rate rise By Jonathan Wheatley in São Paulo Brazil’s central bank is expected to raise its core interest rate by as much as a full percentage point on Wednesday evening as the unexpectedly fast pace of economic growth puts increasing pressure on prices. Predictions for economic growth, inflation and interest rates at the end of 2010 have all risen sharply in recent weeks, adding to near-certainty among economists that the bank will raise its target overnight rate, known as the Selic, for the first time since September 10 2008 – less than a week before the collapse of Lehman Brothers and the ensuing global crisis took the pressure off an economy that was showing dangerous signs of overheating. The bubbles that burst round the developed world are a long way from reinflating but, in Brazil, many economists fear the economy may already be behaving much as it was 18 months ago. The central bank’s most recent survey of market economists, published on Friday, put the consensus for economic growth this year at 6 per cent – well above the 4.5 per cent or so that many economists regard as the potential, or non-inflationary, rate. That is even after factoring in an increase in the Selic rate from 8.75 per cent on Wednesday to 11.75 per cent by the end of the year – a full half point above the consensus just four weeks ago. Consumer price inflation is seen rising to 5.41 per cent a year, almost a point above the government’s target of 4.5 per cent. Henrique Meirelles, central bank governor, in an unprecedented signal of intent, said on Monday: “In situations like this one, we need a programme of vigorous action.” His comments caused a spike in interest-rate futures contracts as many investors who had expected a half or three-quarter point increase on Wednesday evening began to see a full point rise as a real possibility. Some economists believe the central bank should have acted more quickly as inflationary pressures emerged some months ago. In a note to clients on Friday, Nick Chamie of RBC Capital Markets said he expected the actual rate of Brazil’s economic growth to overtake its potential rate during the second half of this year. “Given we are six-nine months away from the output gap closing (according to our estimates) and monetary policy tends to work with a 12 to 18-month time lag, it is fair to say the BCB is already behind the curve,” he wrote, describing the task facing the central bank of bringing inflation under control as “an enormous challenge”. However, others believe there is still room for sustainable growth. On Friday, Marcelo Salomon and Guilherme Loureiro of Barclays Capital wrote that “while inflation is clearly a source of concern and domestic demand growth has jumped back to the pre-crisis levels, there is still some spare capacity to be filled before we reach the same blistering pre-crisis conditions”. 4. How to avoid higher home repayments By Tanya Powley With this week’s inflation figures showing further price increases, homeowners who are worried that interest rates will rise this year are now being offered mortgage deals that can protect them against higher repayments. Brokers are recommending a range of options: 1. Split loan deals From Monday, HSBC will offer borrowers the option of a split loan mortgage that allows customers to fix either 25, 50 or 75 per cent of their loan, with the remaining percentage on a lifetime tracker rate. The fixed rate depends on the proportion of the mortgage that is fixed and the loan-to-value of the deal. Rates start from as low as 2.49 per cent for the 25 per cent fixed option at 70 per cent loan-to-value. The product has a £999 fee and is available to customers borrowing up to £500,000. “The rates on offer look very good,” said David Hollingworth of London & Country Mortgage Brokers. Mortgage brokers point out that many other lenders will allow borrowers to mix and match products and specify the split between fix and tracker. “However, you do need to watch out for the fees charged and check whether a fee is payable on each element of the loan,” said Hollingworth. 2. Switch and fix deals Otherwise known as a “drop-lock” mortgage, these products allow borrowers to take out a tracker rate but then move on to a fixed-rate deal – with the same lender – without any early repayment charges. Nationwide Building Society and Royal Bank of Scotland (RBS) are among the few mortgage providers that currently offer the switch-and-fix option. However, Nationwide charges a reservation fee for the new fixed rate while RBS allows customers to switch free of charge provided they have been on the tracker for at least three months. Nationwide has a two-year tracker at 2.68 per cent – bank rate plus 2.18 per cent – available up to 70 per cent loan-to-value. RBS has a two-year tracker at 2.59 per cent – bank rate plus 2.09 per cent – at up to 60 per cent loan-to-value. The potential downside is that the lender’s fixed rates are likely to have risen by the time the borrower decides to switch. 3.Capped rate mortgages A capped rate mortgage is another option that limits a borrower’s exposure to rising rates. Capped rates cannot climb above a pre-set rate, known as a cap. Brokers recommend a capped rate for about five years. Britannia/Co-op has a five-year deal at 2.99 per cent – bank base rate plus 2.49 per cent – with a cap of 5.99 per cent available up to 75 per cent loan-to-value. It comes with a £999 fee. “The best five-year tracker rate at 75 per cent loan-to-value is 2.84 per cent from ING so a borrower will not pay much of a premium – just 0.15 per cent – to have the security of the cap,” said Nigel Bedford of Largemortgageloans.com. 4. Interest rate insurance policy RateGuard is an insurance policy offered by insurer MarketGuard that pays out a monthly sum if rates rise above a certain amount. Premiums are set according to the size of the mortgage and the rate insured. For example, protecting a £500,000 repayment tracker mortgage against a rate rise of more than 1 per cent costs £193 per month with a two-year policy. This drops to £55 per month if the policyholder wants to protect the same mortgage against a rise of more than 3 per cent. Brokers warn this option is likely to be the most expensive. 5. Lending to businesses falls sharply By Norma Cohen Lending to private non-financial companies fell sharply in March and at a faster pace than seen over the previous six months, a shift that lenders attributed to low demand for credit from the corporate sector. Data from the British Bankers’ Association showed that lending to so-called PNFCs – whose activities form the backbone of the British economy – fell by £3bn in March, against an average monthly decline over the previous six months of £1.7bn. The availability of credit for the corporate sector has been among the chief concerns of economists and policymakers, even in the face of a clearly strengthening outlook for growth. “Lending to non-financial companies continued to contract annually, as company demand for credit remained subdued even though alternative capital funding has not been as prevalent in the first quarter,” the BBA said. On the housing front, lending picked up, although only slightly. The number of mortgage approvals rose to 35,000 in March from 33,400 in February, which was itself the lowest level for mortgage lending in 10 months. Meanwhile, homeowners stepped up the pace at which they are repaying their mortgages so that net mortgage lending – gross disbursements minus repayments – eased to £2.4bn in March from £2.7bn in February and was below the average level of the previous six months. “The muted BBA mortgage approvals data reinforce our suspicion that house prices will be erratic through 2010, and may very well be no better than flat over the year – particularly if more properties come on to the market thereby pushing the supply/demand balance more towards buyers from sellers,” said Howard Archer, economist at IHS Global Insight. Mr Archer said the strong rise in house prices seen over much of 2009 was “out of kilter” with overall economic fundamentals and was unsustainable. Net consumer credit also contracted slightly in March, according to the BBA, with repayments outstripping new borrowing. New spending on credit cards in March totalled £5.7bn, down from £5.8bn in February and in line with the average over the previous six months. New consumer loans for the month totalled £1.1bn, down from £1.3bn the month before. But the decline in consumer borrowing and net mortgage lending translated into rising deposits at banks. Total deposits rose by £4.7bn, up slightly from February and much higher than the £3.2bn average level seen over the previous six months.