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Question 1

Commercial Bank

Answer 1

Bank which provides retail banking to the general public

Question 2

Investment Bank

Answer 2

Bank which specialises in large and complex financial
transactions such as underwriting, facilitating mergers and
acting as a broker and/or financial adviser for institutional
clients.

Question 3

Inflation Target

Answer 3

Policy that monetary conditions will be adjusted if
forecasted inflation moves away from a declared target

Question 3

Central Bank

Answer 3

An institution that manages the nation’s currency, money
supply, and interest rates and usually oversees the
commercial banking system

Question 3

Monetary Policy
Committee
(of the Bank of
England)

Answer 3

Independent body tasked to set monetary policy to
achieve a UK inflation target of 2% (CPI inflation)

Question 4

Quantitative
Easing
(QE)

Answer 4

An unconventional form of monetary policy where a
Central Bank creates new money electronically to buy
financial assets, like government bonds and corporate
bonds

Question 5

Prudential
Regulation
Authority (PRA)

Answer 5

Part of the Bank of England, created in 2012 to be
responsible for the regulation of UK financial institutions to
ensure bank lending and insuring is prudent

Question 5

Funding for
Lending

Answer 5

Bank of England scheme designed to incentivise banks
and building societies to boost their lending to the UK real
economy by providing them with funding for an extended
period, with both the price and quantity of funding
provided linked to their lending performance

Question 6

Market for Corporate Control

Answer 6

The competition for control of companies through takeovers

Question 7

Financial Conduct Authority (FCA)

Answer 7

The independent body responsible for promoting effective
competition between all financial services firms (including
independent financial advisers) and that all operate within
the banking regulations, to ensure that consumers get a
fair deal from financial firms