Regulation of the Financial System

Question 1

Macroprudential

Answer 1

concerned with identifying and monitoring risks to the overall stability of the financial system and acting to remove those risks

Question 2

Microprudential

Answer 2

focus on ensuring the stability of individual banks and financial institutions. Identifying monitoring and adding on risk to individual firms

Question 3

Financial Policy Committee

Answer 3

Macroprudential regulator is to maintain the stability of the financial system overall with a secondary objective in supporting the Government economic policy.

Question 4

Prudential Regulation Authority

Answer 4

regulates and supervises individual banks, buildings societies, credit unions, insurers and major investment banks. Responsible for stress testing Uk banks

Question 5

Financial Conduct Authority

Answer 5

Aims to make sure financial markets were well by promoting competition and ensuring consumers get a fair deal and ensuring firms act with intregrity.

Question 6

Stress Test

Answer 6

look at individual banks’ resilience to various adverse scenarios such as recession and rising unemployment