Corporate Responsibility and Banking Regulation Flashcards
Topic 1
Corporate social responsibility (CSR) is about responsibility to shareholders
It is about Responsibility to all stakeholders and not just shareholders
What is CSR?
A form of self regulation practised by many large companies. It’s a way that a company can build a conscience and ethics into their business model
What are the 3 pillars of sustainability?
Environmental sustainability
Economic sustainability
Social sustainability
What is environmental sustainability
Reducing negative impacts on the earths ecosystems in 2 main ways.
Good environmental management I.e air pollution, land use, water management
Good demand management, I.e management of human consumption of resources
What is economic sustainability
Taking steps to reduce undesirable consequences of economic activity.
Social sustainability
Creating communities that foster well being, peace, security and justice for people who live in them.
Sustainability
The way of life we pursue at present can continue in a similar way in the future.
In 2013 the FSAs role as a banking regulator was replaced with a new regulation regime. What was this structure compromised of?
Bank of England
Financial Policy Commitee (FPC)
Prudential regulatory authority (PRA)
Financial conduct authority (FCA)
In March 2017, the PRA board was replaced by who? And what was their objectives?
Prudential regulatory committee (PRC)
Their aim delivering a “simpler and more strongly coherent governance structure within the Bank while ensuring the PRA remains strongly focused on its statutory objectives”
What are the PRAs statutory objectives?
To promote the safety and soundness of these firms
To secure an appropriate degree of protection for policyholders / investors
To facilitate effective competition
What are the 4 main objectives of the FCA?
Regulation - supervising conduct of financial services firms
Protection - regulating financial services industry to ensure firms stick to the rules and consumers do not fall victim to scams
Championing - fair treatment of consumers
Enforcement - helping to change behaviour of firms making it clear that there are real and meaningful consequences to those who do not abide
What are the FCAs 3 purposes ?
To be responsible for ensuring financial markets operate with integrity
To promote effective competition
To require companies to put customer well being at the heart of how they run their business
Basel III requires banks to retain a capital adequacy ratio of 7%. How can banks increase their capital?
Raising new capital from investors
Having a dividend moratorium
Reducing the amount they lend
Make less risky investments / loans (strengthen their risk weighted assets)
What are the 3 main money laundering offences?
Concealment
Making arrangements for using or possessing criminal property
Acquiring criminal property
7 GDPR principles
Lawfulness, fairness and transparency Purpose limitation Data minimization Accuracy Storage limitation Integrity and confidentiality (security) Accountability
