The Financial Services Industry Flashcards
What are the UK’s general Economic Policy aims?
Sustainable growth, Control inflation, full employment, Balance of payments
What is Fiscal Policy?
Government policy on taxation and public borrowing / spending.
What is the PSNCR?
PSNCR (Public sector net cash requirement) is the short fall between what the government spends and the income (taxes) it receives. The government is usually in a surplus and needs to have gilts to bring in other income.
What is Monetary Policy?
The BOE control interest rates and money supply. They do this through setting the Base Rate and Quantitative Easing.
What is the governments inflation target?
2%
Who sets the interest rates in the UK?
The Monetary Policy Committee
How often do the MPC meet to set interest rates?
8 times a year
What is the primary market?
New issues of shares. IPO’s. The London stock exchange within the UK.
What standards do companies have to meet before they list on the Primary Market?
Their size, no. of securities they are introducing, information they give investors
What is the secondary market?
Allows investors to buy and sell securities which are already in the market.
What is the balance of payments?
Total of the countries exports and imports
Who is responsible for implementing the governments financial and economic policy
The Treasury
What is the Lamfalussy Process?
A new framework for implementing EU legislation.
What is Level 1 in the Lamfalussy framework?
Framework acts -
What is the ESMA and what are its roles?
The European Securities and Markets Authority. Safeguards the stability of the EUs financial system by ensuring the integrity, transparency and efficiency of the securities markets. Tries to converge markets within financial sectors. Created a single rule book in Europe.
What is the ECB? And what are its tasks?
The European Central Bank - main task is to maintain the purchasing power of the Euro and have price stability. They authorise the issuance of bank notes, define euro system policies, statutory reports.
What are chinas main regulatory bodies? (4)
The China securities regulatory commission (CSRC). The China banking regulatory commission (CBRC). The China insurance regulatory commission (CIRC). The peoples bank of China (PBOC).
What are the main regulatory bodies in Hong Kong? (5)
Securities and future exchange (SFC). Stock exchange of Hong Kong (SEHK). Hong Kong futures exchange (HKFE). Hung Kong Monetary Authority (HKMA) . Independent Insurance Authority (IIA).
What are the main regulatory bodies in Japan?
Financial Services Agency (FSA). Securities and Exchange Surveillance Committee (SESC).
What are the main regulatory bodies in Singapore?
Monetary authority of Singapore (MÁS). Singapore exchange Securites trading (SGX). Securities industry council (SIC).
What are money market operations?
The borrowing and lending of highly liquid, short term assets and securities conducted between banks.
What is Narrow Money?
All liquid financial assets.
What is Broad Money?
Sum of wide range of financial assets, including less liquid assets.
Which BoE monetary aggregates is this ‘ the measure of notes and coins in circulation outside the BoE, plus operational deposits at the BoE. ‘Narrow money’
M0
Which BoE monetary aggregates is this ‘ the measure of notes and coins in circulation with the public, plus sterling deposits held with UK banks and building societies by the rest of the private sector. (Broader Money)
M4
What is the Fischer Equation?
The relationship between Money Supply, Inflation and employment. MV=PT.
What is National Income?
The sum of all incomes of residents in the UK which arise as a result of economic activity from the production of goods and services.
Why is measuring NI useful? (5)
- Measuring the standard of living in the country.
- Comparing the wealth of different countries
- Measuring the change in national wealth and the standard of living
- Ascertaining long term trends
- Assisting central government in its economic planning
What is GDP ( gross domestic product)?
The total value of income / production from economic activity within the UK.
C+I+G+(X-M)
C - Consumer Expenditure
I - Private investment in firms
G - Government spending
(X-M) - Balance of payments
Give an example of a direct and an indirect tax.
Direct (tax of incomes of individuals)- Corporation tax
Indirect (products and services) - VAT
What is the primary role of the world trade organisation?
Deal with the rules of trade between different nations; among its aims is the liberalisation of trade laws between countries
How long does a typical business cycle tend to last in a developed country?
8-10 years.
