Topic 3 Flashcards
(29 cards)
When was the demonstration that regulation on banking and finance was needed
2007 -2008 financial crisis
What are the three bodies that replaced the Financial services authority(FSA)
- The bank of England’s Financial Policy Committee (FPC)
- (FCA)
3.(PRA) prudential regulation authority
How is the Financial Ombudsman Service (FOS) funded
An annual levy that every provider covered by the scheme is obliged to pay and case fees by providers if the complaints about them exceed a certain number
The FSCS is funded how
Providers who are members of the scheme this includes the cost of any compensation payouts.
CMA competition and markets authority, citizens advice and local authority. All of these are responsible for consumer protection from what ?
Across all industries and businesses
Government policies known as POLITICAl AGENDA
Focused on helping ensure that every individual has access to benefits that financial products and services can provide
Fortnightly cheque is what
A check that could be cashed in at any post office
Universal banking policy
A commitment by the banks and building societies to offer stripped down basic bank accounts.
What was the equivalent of a basic bank account but stopped at 2022
Post office card account
Consumer rights campaigners believe that many providers still do not publicise their basic bank accounts enough why’s this
Because the accounts are costly for them with no compensating profits
What is the sales good act 1979
Gives consumers the right to return goods that are not fit for purpose
What can interest rates be simply described as
The price of money
What is using the bank rate to deliver price stability
Maintain the annual rate of inflation at around 2%
MPCs objectives in increasing the bank rate
To reduce consumer spending reducing the overall demand for products and services putting pressure on businesses to reduce prices
What event triggered the financial crisis 2007-2008
Collapse of the US sub-prime housing market
Why did the house prices during Covid go up so fast
Because the government had temporarily scrapped stamp duty land tax for majority buyers
The homeowners worst affected by economic recession
Those who used high loan-to-value mortgages
Negative equity double blow
First is their house gets repossessed and second is that they might still owe on top of the sell of the repossession property
What are marginal borrowers
People who are just managing to pay at lower interest rates and won’t be able to meet even a small increase in monthly payments
A healthy balanced economy is what
One which demand for goods and services is high enough to keep unemployment at an acceptable low level but not to high that it causes inflation
What does the forward guidance statement from the Bank of England mean
Setting out what the bank expects to happen to interest rates
What does fiscal policy mean
Manage how much money it raises in taxation the amount that it borrows on the financial markets , and the overall amount that it spends (government)
Why is it believed the us collapse was so contagious other than globalisation
Fund managers in one country investing in the products of a firm based in another
Meaning of float currency
To be determined by the forces of demand and supply in the current markets
