5 Flashcards
Bank rate
The interest rate that the Bank of England uses when it lends money to
other banks. Financial services providers take account of the Bank rate
when they decide how to set interest rates on their own products
Banking Act 2009
This Act provides a set of tools to allow the regulatory authorities to resolve
(ie wind up) a bank or building society that is in financial difficulty in an
orderly way, and so to reduce the impact of a bank failure on financial
stability and bank customers
Challenger banks
Any new bank that challenges the ‘big four’. For example, Virgin Money,
Metro Bank, Monzo Bank and Starling Bank
Consumer protection
Designing products and services with customers’ needs in mind, rather
than making maximum profits the absolute priority. It also involves
ensuring that customers are not sold products that are unsuitable for them,
and that they are treated fairly
Coronavirus
Coronavirus disease, known as Covid-19, is a respiratory illness that causes
mild to moderate symptoms in a majority of cases but proves debilitating
or fatal for a significant minority. It caused a global pandemic with wide-
ranging economic effects.
Corporate social
responsibility (CSR
Any action or project in which a company goes beyond the interests of its
shareholders and senior management in order to benefit other stakeholder
groups, normally with either a social or an environmental purpose. Also
known as citizenship or sustainable responsible business.
Deleveraging
Reducing the amount of debt in relation to assets. In personal terms, this
might mean paying off loans, credit cards, etc
Digital exclusion
An aspect of financial exclusion – the inability to take part in the computer-
based society
Financial exclusion
The inability to get access to even the most basic financial services and
products
Financial inclusion
The delivery of financial services at affordable cost to all sections of society,
including the most disadvantaged
Financial Services
(Banking Reform) Act
2013
Legislation that introduced retail ring-fencing for banks and the cap on
payday lenders.
Financial Services
Act 2010
Legislation that focuses on the need for banks to have a plan in place to
deal with situations where they get into financial difficulty
Financial Services
Act 2012
The main Act of Parliament governing the regulation of the financial
services industry
FTSE 100
The Financial Times Stock Exchange Index, known as the ‘footsie’. It is an
index of the share price of the 100 companies with the highest ‘market
capitalisation’ (total value of issued shares) listed on the London Stock
Exchange.
General Data
Protection
Regulation
European Union legislation implemented on 25 May 2018. In the UK, its
provisions supersede those of the Data Protection Act 1998 with the
creation of the Data Protection Act 2018.
Help to Buy scheme
A government-backed initiative set up to help home-hunters purchase a
property with as little as a 5% deposit.
Loan forbearance
When a lender does not seek to repossess a property as soon as the
borrower misses a few monthly payments, instead allowing the customer to
stop paying or make reduced payments for a set period
Money laundering
The process of making ‘dirty’ money (money gained from criminal
activities) ‘clean’ – ie making it look as though it has been acquired
legitimately
Mortgage equity
withdrawal
Additional borrowing based on the difference between the value of a house
and the outstanding mortgage (ie if the house is valued at more than the
amount the owner has to repay on the mortgage)
National Employment
Savings Trust (NEST
A pension scheme run by a public organisation, which aims to ensure that
the majority of workers are enrolled in an occupational pension
PESTEL analysis
A tool used to analyse how six key areas (Political, Economic, Social,
Technological, Environmental and Legal) in the external environment might
affect individual and corporate financial decisions.
Profit margin
The amount by which income from sales exceeds costs
