3.1 - Political Factors

Question 1

Reasons to regulate banking and finance

Answer 1

• protects customers from dishonest or financially unstable providers
• reduces likelihood of future financial crisis
• gives people confidence in financial system

Question 2

Three bodies that replaced the FSA

Answer 2

• FPC
• FCA
• PRA

Question 3

What are the FPC, FCA and PRA responsible for?

Answer 3

• enforcing system of regulation
• maintaining stability of the industry and of individual providers
• ensuring that consumers are fairly treated

Question 4

Mis-selling

Answer 4

When a provider is reckless in selling a product to an unsuitable customer

Question 5

Payment Protection insurance

Answer 5

Insurance product that ensures repayment of loans if a borrower face unexpected events that prevent them from repaying the debt

Question 6

Who has responsibility for regulating consumer credit?

Answer 6

FCA

Question 7

Political agenda

Answer 7

A set of government policies focused more directly on helping to ensure that every individual has access to the benefits that financial products can provide.

Question 8

Social Inclusion

Answer 8

Ensuring all individuals and groups in society have access to certain rights, such as employment

Question 9

A society in which there is full social inclusion is one in which all members of society

Answer 9

• can participate fully
• can influence decisions affecting them
• are able to take some responsibility for what goes on in their communities

Question 10

Possible reasons for people being socially excluded

Answer 10

• physical or mental illness or disability
• poor basic skills
• live in a deprived urban area

Question 11

Financial exclusion

Answer 11

The inability to get access to even the most basic financial services products and services

Question 12

What can cause financial exclusion?

Answer 12

• The same issues as social exclusion

- financial literacy

Question 13

Financial literacy

Answer 13

An individual’s level of knowledge and understanding of financial matters

Question 14

What is a measure of financial exclusion?

Answer 14

The number of people who do not have a bank account

Question 15

Someone without a bank account is unable to access other financial services such as:

Answer 15

• some savings accounts
• some products usually require monthly payments by direct debit
• gas, electricity and others often offer discounted prices if payment is made through direct debit.