The UK Financial Services Industry: An Overview Flashcards
What do banks do with the money they receive into current accounts?
Use it to make a return for itself. Eg lending it and charging interest
What is the main purpose of a gilt?
Function as a loan to government
Apart from physical assets, what else can be insured?
Earnings, profit potential, financial transactions
What are the 4 essential functions of the financial services
- Vehicles to protect savings and channel them into capital management
- Balance savers desire of access to money and borrowers need for long term funds
- Allow insurance against risk
- Investors can disperse risk
What are the two objectives of capital markets
To allow investors to invest in assets to produce the potential for real growth
To support the need for companies to raise money without borrowing from a bank
What are the 2 different types of financial instrument?
Shares and fixed interest stocks (bonds)
What are the 3 main European regulatory bodies
EBA, ESMA, EIOPA (the ESAs)
What regulatory body is responsible for prudential regulation of banks and large investment firms
PRA
What regulatory body is responsible for conduct
FCA
Who regulates payment systems
PSA
Who monitors and facilitates payment systems
Bank of England
What are the core services offered by banks and building societies
Current accounts
Deposit accounts
Wills and executors hip
Mortgages and loans
What are the indirect services offered. Y banks and building societies
Portfolio management
Stockbroking services
Collective investment services
Insurance and pensions
What was the key Euro regulation in 1999
FSAP
Who is ultimately responsible for the regulation of financial services
The chancellor of the exchequer
What are the 3 key UK regs
FSMA, Financial services act and the Bank of England and financial services act
What is the result of high tax
Slow economy
What’s is the result of low tax
Stimulated economy
What is fiscal policy
The control of taxation, borrowing and government spending methods
What is monetary policy
Activity involving interest rates and the Money supply
Who defines the level of government borrowing and expenditure
Chancellor of the exchequer
Who controls interest rates
Monetary policy committee
How does government expenditure stimulate the economy
They pay for goods and services in the uk which flows through the economy
Why does government borrowing dampen the economy
It reduces the amount of money in circulation
What if quantitive easing
The Bank of England buys back gilts and bonds to inject ,ore liquidity into the system
