Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Eco > 3.1 B - Banking > Flashcards

3.1 B - Banking Flashcards

1
Q

What is the central bank

A

The main monetary authority of a country that oversees and manages the nation’s money supply and banking system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Functions of the central bank

A

Sole issuer of bank notes and currency
Manages govt. payments
Manages national debt
Supervises the banking system
“lender of the last resort” to the banking system
Manges nation’s gold and forex
Operates govt.’s monetary policy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is interest

A

the cost of borrowing money.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Some financial services banks provide and take a fee on performing

A

Withdrawing money from ATM
Forex
buying/selling shares of a public company
Insurance (life, property, travel)
Telephone and internet banking services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a commercial bank

A

Retail banks that provide various financials services to customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is a bank

A

A financial institution which brings together customers who want to save vs. borrow.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Two types of commercial banks

A

Private sector
Public sector

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is a private sector commercial bank

A

A bank that is owned and operated by the private sector under guidelines from the govt.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a public sector commercial bank

A

A bank that is operated by the govt.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Another name for commercial bank and why its called that

A

Clearing bank - They transfer funds between each other on behalf of their customers through a process known as clearing.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Two types of functions for a commercial bank

A

Primary
Secondary

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the primary functions of a commercial bank

A

Accept deposits
Make loans (advances)
Overdrafts
Credit creation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is an overdraft

A

A kind of short term borrowing when that you take when you withdraw more money than you have.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Overdraft vs loans

A

Overdrafts -
Short term
Have a limit
Only given to businesses or wealthy individuals
Don’t need collateral

Loans -
Long term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the credit creation process

A

Banks increase the circulation of money in an economy by making money more available to borrowers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What does credit creation process enable banks to do

A

Generate additional purchasing power from their cash deposits.

17
Q

What are the secondary functions of the commercial bank

A

Collecting/clearing cheques on behalf of customers
Providing safety deposits
Providing the facility to transfer money to other overseas bank accounts
Pay bills on your behalf
Online banking
Tax advisory
ForEx
Trading shares.

18
Q

Types of banks

A

Commercial
Credit unions
Mutual societies
Investment banks
Islamic banks

19
Q

What is a credit union

What do they do

A

Not-for-profit organization, owned by and for its members.

Provides low cost loans to members with low income who can’t borrow from other banks.

20
Q

What are mutual societies

A

Owned and run on behalf of their customers

Specialize in mortgages.

21
Q

What are investment banks

A

Help large businesses raise finance to fund operations and expansion.

Advice to companies for mergers, acquisitions and takeovers

22
Q

Islamic banks

How do they make money

What do people who deposit money get

A

Like commercial banks except islamic banks don’t charge/pay an interest.

Instead they take fees for banking services.

People who deposit money will get a share of the profits.

23
Q

Types of bank accounts

A

Savings
current
recurring

24
Q

Types of loans

A

Personal loans
Housing loans (mortgage)

25
Q

Mediums of money

A

Cash and coins
Debit card
Credit card

26
Q

What is a savings account

A

An account for your saving where no fixed amount of money has to be deposited.
Interest is added on the money in this account

27
Q

What is a deposit account

A

(Broader term for savings and current)
A deposit account is a type of bank account which allows money to be deposited or withdrawn by the account holder.

28
Q

What is a current account

A

An account used by the customer for everyday transactions. No fixed a amount has to be deposited every month

29
Q

What is a recurring account

A

A bank account where a specific amount of money has to be deposited every month.

30
Q

What is a personal loan
characteristics

A

Individual loan taken by an individual for personal uses.
6 months - 10 years
high interest on the basis on the individual’s salary

31
Q

What is a housing laon

A

Only for houses
Long term
Some collateral has to be put up with the loan as well

32
Q

What is a debit card

A

Medium of payment where money is debited from your account.

33
Q

What is a credit card

A

Medium of payment, where u have a credit limit and you make purchases on the credit limit.
Short term loan
If you can’t pay the credit card debt then you have to pay interest + the original debt.

Eco (40 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions