The UK financial Services Industry Flashcards
Both individuals and companies have protection needs on their:
Physical assets
Earnings
Profit potential
Financial transactions
What are the two options for government borrowing?
Gilts and national savings and investments (NS&I)
How does a gilt work?
They pay fixed levels of income over regular intervals (6 months)
Which benchmark is used to measure the rate of inflation for index linked gilts ?
When and what index are they moving to?
Retail Price Index
2030 & Consumer Price Index including Housing (CPIH)
What are the two objectives for capital markets?
Enable investors to invest in assets that provide the potential for real growth
Help companies raise money without necessarily going to the bank
Capital markets introduced which to types of financial instrument?
Shares
Fixed-Interest stocks (bonds)
What are the four key components within the financial sector
Financial infrastructure
Financial markets
Financial firms
Financial sector authorities
Who overseas the payment systems in the UK?
The Bank of England
Who is the operators of the UK’s retail payment systems?
Pay.UK
Who regulates the payments system industry?
Payment Systems Regulator (PSR)
What is a over-the-counter trade? The
Participants trade stocks, commodities, currencies, or other instruments directly between two parties and without a central exchange or broker.
What are the core services of Banks and building societies?
Current accounts
Deposit accounts
Mortgages and loans
What are the main indirect services offered by banks and building societies?
Portfolio management
Stockbroking services
Wills and executorship
Collective investments
Insurance and pensions
What is a bancassurer?
A bank or building society which have set up their own insurance company which forms part of their ties or multi tied offering
What are the three EU supervisory authorities?
European Banking Authority (EBA)
European Securities and Markets Authority (ESMA)
European Insurance and Occupational Pensions Authority (EIOPA)
Which government department is responsible for the regulation of financial services?
The Treasury
Who has the overall authority over the Treasury?
The Chancellor of the Exchequer
Name the three regulatory bodies under the Financial Services Act (FSA):
Financial Policy Committee
Financial Conduct Authority
Prudential Regulation Authority
What is dual regulation?
When FCA and PRA regulate together
Who governs the PRA?
Prudential Regulation Committee
What can the impact of taxation have on the economy?
To raise revenue for the government and to re distribute wealth
What is the purpose of high and low taxation
High taxation reduces the money in circulation so reduces the ability to spend
Low taxation means more money available so stimulates the economy
What is the fiscal policy?
Control of taxation, government spending and borrowing
What is the monetary policy?
Control of interest rates and money supply
How does the government borrowing and spending money effect the economy?
Spending: more money in circulation more significant than tax cuts
Borrowing: reduces money in circulation so reduces economic activity
Who sets the interest rates?
The Monetary Policy Committee within the Bank of England
What is used to influence short-term interest rates?
Gilt Repo Market
What is the FATF an abbreviation of?
Financial Action Task Force
Historically, uk banks and building societies were developed from the consumer need to:
Provide a safe but accessible place to keep individuals money
