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Flashcards in The UK Financial Services Industry: An Overview Deck (25)
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1

What do banks do with the money they receive into current accounts?

Use it to make a return for itself. Eg lending it and charging interest

2

What is the main purpose of a gilt?

Function as a loan to government

3

Apart from physical assets, what else can be insured?

Earnings, profit potential, financial transactions

4

What are the 4 essential functions of the financial services

1. Vehicles to protect savings and channel them into capital management
2. Balance savers desire of access to money and borrowers need for long term funds
3. Allow insurance against risk
4. Investors can disperse risk

5

What are the two objectives of capital markets

To allow investors to invest in assets to produce the potential for real growth

To support the need for companies to raise money without borrowing from a bank

6

What are the 2 different types of financial instrument?

Shares and fixed interest stocks (bonds)

7

What are the 3 main European regulatory bodies

EBA, ESMA, EIOPA (the ESAs)

8

What regulatory body is responsible for prudential regulation of banks and large investment firms

PRA

9

What regulatory body is responsible for conduct

FCA

10

Who regulates payment systems

PSA

11

Who monitors and facilitates payment systems

Bank of England

12

What are the core services offered by banks and building societies

Current accounts
Deposit accounts
Wills and executors hip
Mortgages and loans

13

What are the indirect services offered. Y banks and building societies

Portfolio management
Stockbroking services
Collective investment services
Insurance and pensions

14

What was the key Euro regulation in 1999

FSAP

15

Who is ultimately responsible for the regulation of financial services

The chancellor of the exchequer

16

What are the 3 key UK regs

FSMA, Financial services act and the Bank of England and financial services act

17

What is the result of high tax

Slow economy

18

What's is the result of low tax

Stimulated economy

19

What is fiscal policy

The control of taxation, borrowing and government spending methods

20

What is monetary policy

Activity involving interest rates and the Money supply

21

Who defines the level of government borrowing and expenditure

Chancellor of the exchequer

22

Who controls interest rates

Monetary policy committee

23

How does government expenditure stimulate the economy

They pay for goods and services in the uk which flows through the economy

24

Why does government borrowing dampen the economy

It reduces the amount of money in circulation

25

What if quantitive easing

The Bank of England buys back gilts and bonds to inject ,ore liquidity into the system