3.2 The Sustainability of Individual Providers Within the Financial Services System

Question 1

What does a sustainable business model involve?

Answer 1

• Management being able to take prudent decisions

- Management avoiding taking risks that may lead to it one day not being able to meet its obligations

Question 2

To operate sustainably, a provider should comply with financial regulation that falls under which main headings?

Answer 2

• Prudential management of its balance sheet

- Principles and rules governing how it deals with customers

Question 3

What are pension schemes organised by?

Answer 3

Pension funds

Question 4

What is the job of pension funds?

Answer 4

Manage large portfolios of shares and other securities to give the best return to their pensioners

Question 5

What is the longest-term savings?

Answer 5

Pensions

Question 6

Speculators definition

Answer 6

People who buy and sell the shares of companies to make profits

Question 7

Directors definition

Answer 7

People at the head of the organisation who make all of the big strategic decisions

Question 8

Under the Financial Services (Banking Reform) Act 2013, it is an offence for a director or senior employee of a bank to do what?

Answer 8

Take a risk that they knew could result in failure of the bank

Question 9

What is the punishment for someone found guilty of offending the Financial Services (Banking Reform) Act 2013?

Answer 9

• Imprisonment
• Fine
• Both

Question 10

How can employees encourage sustainable behaviour?

Answer 10

By advising and helping individuals to make sustainable saving and borrowing decisions