1. Purpose & Structure Of The UK FS Industry Flashcards
What is demutualisation
When a building society converts to a bank
Who are the national savings and investments (NS&I)
Large savings provider backed by the HM Treasury
What is meant by a capital market
A financial market where bonds and equities are bought and sold
Friendly societies
Offer tax efficient savings plans
What is Fiscal policy
The control of: taxation, borrowing & government spending methods
What is Monetary policy
Set Bank of England and controls money supply
Quantitative easing (QE)
- An alternative that can be used by the BoE to increase the money supply and stimulate the economy.
- By buying back gilts & bonds from the financial sector
Define inflation
Increase in the prices of goods and services
The key legal instruments governing the FS industry are
- Financial services act 2012
- Financial services & markets act 2000 (FSMA)
The current regulatory framework in the UK include:
- FPC
- PRA
- FCA
Define deflation
The decrease in the price of goods and services
Define disinflation
Occurs when there is a decrease in the rate of inflation
What is the Consumer Price Index (CPI)
It indicates inflation
Measures the change in prices for goods and services over time
When the government want to raise long term finance what does it issue
Gilts
State pensions are increased each year by the higher of average earnings or
2.5%
