Chapter 1 - Understand the UK Financial Services Industry in its European and Global Context Flashcards
Name the four essential functions of Financial Services
- Providing a vehicle which savings are protected and input into Capital management.
- Providing means by which savers desire for ready access to their capital can match borrowers requirements.
- Allowing individuals and companies to insure against risks they do not wish to take but others are happy to take on in return for payment.
- Allowing investors to disperse risk across a number of different investment products.
Name the four sections of the UK financial services structure
- Financial Infrastructure
- Financial Markets
- Financial Firms
- Financial Authorities
What do banks do with the money they receive into current accounts?
• Put the money into long-term investments and then loan the other money out to make a profit with in the form of borrowing.
What do the Payment Systems Regulator do?
- Promote competition in the market for payment systems and services.
- Develop and innovate with payment systems
- Ensure payment systems are operated and developed so that interest is promoted with all businesses and consumers that use them.
Define Independent Advice
An adviser giving financial advice can choose from the whole range of the market, whole range of providers and is not restricted in any way.
What is Restricted advice?
A firm that is only able to recommend certain products, providers, or both. When an adviser is restricted, they must not describe themselves as independent.
What were the main objectives of the FSAP
Remove barriers and increase competition between financial advise firms.
What are the core services offered by banks and building societies?
Current accounts, deposit accounts (savings), mortgages and loans.
What are the indirect services offered by banks and building societies?
Portfolio management, stockbroking service, wills and execturship, insurance and pensions.
What is the current regulatory framework in the UK:
- Prudential regulation authority
- Prudential regulation committee
- Financial policy committee
- Financial Conduct Authority
HM TREASURY AND CHANCELLOR OF THE EXCHEQUER ARE ABOVE ALL OF THESE
How does the Bank of England use the Gilt Repo Market to manage the economy?
It is used to influence short-term interest rates.
What is the main purpose of a gilt?
Issuing of gilts allows governments to borrow money from investors in return for a fixed level of interest.
Who’s responsibility is it to set interest rates?
Monetary policy committee
