Th4.4: Financial Regulation

Question 1

What can regulation include?

Answer 1

banning market rigging
preventing the sale of unsuitable products
maximum interest rates to prevent consumer exploitation and excessively risky lending
deposit insurance to protect consumer deposits and increase stability
liquidity ratios

Question 2

What are the three key bodies for financial regulation?

Answer 2

FPC
PRA
FCA

Question 3

FPC

Answer 3

identifies and reduces system risk and supports government economic policy (macroprudential)

Question 4

PRA

Answer 4

ensures competition, ensures consumers have access to services, minimises risk should a bank fail and ensures banks take responsible action (microprudential)

Question 5

FCA

Answer 5

protects consumers, promotes competition and enhances the integrity of the system by preventing market rigging