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professional bankers certificate > module five > Flashcards

module five Flashcards

1
Q

Systemic regulation

A

safety and soundness of financial system covering all public policy regulations designed to minimise risks. Bank runs happen when a large number of people make panic withdrawals as they fear they will run out of money.

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2
Q

Prudential regulation

A

consumer protection relating to the monitoring and supervision of financial institutions with attention paid to asset quality and capital adequacy which is a measure of a bank’s ability to pay its debts.

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3
Q

Conduct of business regulation

A

focuses on how banks conduct their business. Purpose is to protect customers from harm, preserve and enhance integrity.

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4
Q

Central bank

A

a financial institution responsible for overseeing monetary system with the key functions of: Control issue of notes and coins, Control amount of credit money created by banks, Have control over non-bank financial intermediaries, Use monetary policy to control credit expansion, Oversee financial sector to prevent crises, Act as lender of last resort to protect depositors, Act as governments banker, Act as official agent to the government

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5
Q

UK financial regulation framework

A

1st April 2012 - financial services act - contained the UK governments reforms of the UK financial services regulatory structure and created a new regulatory framework. Gives bank of England macro-prudential responsibility for oversight of financial system.

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6
Q

Prudential regulation authority

A

Requires financial firms to hold sufficient capital and have risk controls in place with the three objectives of: Promoting safety of firms it regulates, Contributing to securing appropriate degree of protection, Facilitate effective competition between firms

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7
Q

Financial conduct authority

A

Responsible for authorising, supervising and taking action against those undertaking financial services activities. Its objective is to ensure the relevant markets function well and it protects customers and financial markets and also promotes competition.

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8
Q

Financial ombudsman service

A

settles complaints with financial services firms

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9
Q

Financial services compensation scheme

A

handles claims for compensation from consumers when firms cant

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10
Q

Payment systems regulator

A

independent economic regulator for payment systems

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11
Q

Pensions regulator

A

protects pensions making sure employers, trustees, specialists and advisors fulfil their duties

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12
Q

Serious fraud office

A

investigates and prosecutes fraud, bribery and corruption

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13
Q

National crime agency

A

law enforcement agency with responsibility for intelligence and operational response to serious organised crime

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14
Q

Money advice service

A

provides free financial information and education

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15
Q

Department for business, energy and industrial strategy

A

aims to build an economy for people to work and businesses to invest, innovate and grow.

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16
Q

UK competition network

A

alliance of regulators promoting competition in interest of consumers

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17
Q

UK regulators network

A

initiative to enhance collaboration on issues of shared relevance to bring regulators together

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18
Q

Financial ombudsman service responsibilities

A

investigate fairly listening to both sides, give an answer quickly (within 90 days), explain things clearly

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19
Q

Financial services compensation scheme

A

Offers compensation to depositors and holders of insurance policies. Provides services for: Consumer - provides protection when firms fail, reassuring people and enabling them to buy regulated financial products confidently, Customers - helps people by offering a claims services that’s fast and easy to use, Industry - operates as efficiently as possible contributing to prevention of future failure recovering as much as possible from failed firms to offset costs of compensation, Regulators - ready to respond to major firm failures and crises working with regulatory family supporting orderly resolution of failing firms.

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20
Q

Financial safety net

A

a comprehensive system enhancing and ensuring a countries financial stability consisting of: Regulation and supervision (ensures countries financial stability due to impact bank failure can have), Lender of last resort (central bank will provide funds to banks in financial difficulty), Deposit insurance schemes ( a guarantee for the amount deposited by savers will be paid if a bank fails), Bank insolvency/resolution laws (legal provisions that regulate conditions for handling of bank failures), Cooperation and resolution processes (safety net in case of crisis depending on efficient communication and cooperation)

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21
Q

Structural reform

A

Government developed legislation requiring banks to separate provision of core retail services from other activities like investment and international banking

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22
Q

Structural reform aim

A

protect UK retail banking from shocks in global financial markets designed to increase the stability of the financial system and prevent costs of failing banks

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23
Q

structural reform requirements

A

protect UK retail banking from shocks in global financial markets designed to increase the stability of the financial system and prevent costs of failing banks

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24
Q

Effects of structural reform

A

most banking groups adopted new legal structures some having impacts on the customers (like sort code and account number changing)

25
Q

Bank capital regulation

A

Capital requirements directive IV - legislative package covering prudential rules for banks, building societies and investment firms

26
Q

Basel III

A

set of financial reforms developed to strengthen the regulation supervision and risk management.

27
Q

Efficiency and economy (principles of good regulation)

A

the treasury can commission value-for-money reviews of our operations

28
Q

Proportionality (principles of good regulation)

A

ensure any burden or restriction is proportionate to benefits expected as a result meaning we take into account the costs to firms and consumers.

29
Q

Sustainable growth (principles of good regulation)

A

ensure there’s a desire for sustainable growth in the economy

30
Q

Consumer responsibility (principles of good regulation)

A

customers should take responsibility for decisions

31
Q

Senior management responsibility (principles of good regulation)

A

responsible for firms activities ensuring business complies for regulatory requirements

32
Q

Recognising differences in businesses carried by different regulated people (principles of good regulation)

A

recognise differences in businesses carried by different people subject to requirements

33
Q

Openness and disclosure (principles of good regulation)

A

publish relevant market information reinforce market discipline and improve customers knowledge about financial matters

34
Q

(principles of good regulation)

A
35
Q

Transparency (principles of good regulation)

A

provide appropriate information being open and accessible to the public

36
Q

Fair treatment of customers

A

Outcome 1 - consumers confident dealing with firms with fair treatments of customers
Outcome 2- products and services marketed and sold are designed to meet needs of consumer groups and targeted accordingly
Outcome 3 - customers are provided with clear information and kept informed through all points of sale
Outcome 4 - when consumers receive advice its suitable and takes account of their circumstances
Outcome 5 - consumers provided with products performing as expected and the service is of acceptable standard
Outcome 6 - consumers don’t face unreasonable post-sale barriers

37
Q

Senior managers regime

A

must be assessed as fit and proper, have clear responsibilities and be subject to conduct requirements including duty to take steps in fulfilling the responsibilities

38
Q

Certification regime

A

risk taking employees need to determine an appointment and certify annually that they’re fit and proper to undertake rolls

39
Q

Regulatory references

A

as part of hiring-process for senior decision makers and key risk taking employees firms must exchange mandatory employment references containing information on prior conduct

40
Q

Conduct rules

A

all financial services staff subject to minimum conduct standards

41
Q

Assessing creditworthiness

A

some don’t consider it a long term cost making consumers susceptible to being old unsuitable products and services with the concerns more for high-cost credit users.

42
Q

Improving business model

A

many firms have improved their business models now firms are more aware of the expectations.

43
Q

FCA’s regulatory roles

A

intervenes when sees harm, promotes competition, authorises and supervises against rules, priorities harm affecting vulnerable customers, takes actions when firms haven’t met the rules.

44
Q

FCA findings

A

common themes of complex product design and pricing, persistent debt, lack of clear information, how products operate and have they are bought and sold.

45
Q

FCA’s market study

A

vulnerable are most likely to be affected if credit information isn’t working well. Focuses on the purpose, quality and accessibility of credit information, market structure, business modules and competition, consumers understanding of credit information.

46
Q

Who the GDPR applies to

A

Controller - a person determining purpose and means of processing personal data, Processor - person responsible for processing personal data on behalf of controller

47
Q

consent

A

individuals given clear consent for the organisation to process their personal data for a specific purpose

48
Q

Contract

A

processing is necessary for a contract the organisation has

49
Q

Legal obligation

A

processing is necessary for the organisation to comply with the law

50
Q

Vital interests

A

processing is necessary to protect someone’s life

51
Q

Public task

A

processing is necessary for the organisation to perform a task in public interest and it has a clear basis in law

52
Q

Legitimate interests

A

processing is necessary for legitimate interests of organisation or 3rd party

53
Q

The right to be informed

A

must let individuals know the reasons for processing their data

54
Q

The right of access

A

have access to the information held about them on request

55
Q

The right of rectification

A

have inaccurate personal data rectified

56
Q

The right of erasure

A

have personal data deleted in certain circumstance

57
Q

The right to restrict processing

A

to request their data to be restricted

58
Q

The right to data portability

A

allows individuals to obtain and reuse their personal data

professional bankers certificate (7 decks)

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