Financial Institutions

Question 1

Advantages of Bank of England

Answer 1

Responsible for protecting the financial stability of the UK
Sets interest rates at a level designed to enable a stable economy
Lends to banks

Question 2

Disadvantages of Bank of England

Answer 2

Can increase interest rates making borrowing more expensive
Not a bank for members of the general public

Question 3

Advantages of banks
(Owned by shareholders)

Answer 3

Secure place to store money
Advice for individuals and businesses

Question 4

Disadvantages of banks
(Owned by shareholders)

Answer 4

Savings only secure up to £85k
Interest charged on loans and overdrafts can be high

Question 5

Advantages of building society
(Owned by members)

Answer 5

Secure place to store money
Better interest rates than banks

Question 6

Disadvantages of building society
(Owned by members)

Answer 6

Savings only secure up to £85k
Fewer branches leading to less customers able to access them

Question 7

Advantages of credit unions

Answer 7

Secure place to store money
Not for profit organisation, allowing them to offer higher interest on savings

Question 8

Disadvantages of credit unions

Answer 8

Savings only protected up to £85k
Often small loans

Question 9

Advantages of National Savings and Investments

Answer 9

Government backed, so savings and investments are secure
Easy access at high street post offices, for some services