Topic 1- The Financial System Flashcards
Market Segmentation: Kids- Pocket Money for toys Teenagers- Part Time Job for car Adult- Full Time Job for a mortgage or loan Older Generation- Pension for retirement
Kids?
Teenager?
Adult?
Older Generation?
Name the 4 financial institutions:
- Banks
- Building Societies
- Friendly Societies
- Credit Unions
What can services do retail banks provide?
- Money Transmission e.g cheques, debit cards
- Savings and Investments
- Lending
- Insurance
What services do investment banks provide?
- Lend large amounts of money to companies
- Help raise funds from investors from shares and bonds
- Advise companies on mergers and takeovers
What does the Bank of England do?
- Achieve monetary stability
- Achieve financial stability
- Acts as a banker to the banks
- Issues banknotes
- Manages foreign exchanges
What do the FCA do?
Ensure the financial market works well so consumers get a fair deal
What is the Money Advice Service?
An independent service that offers free and unbiased financial information and can educate and help the public
What does the FOS do?
They settle complaints that consumers and financial businesses are unable to resolve for themselves
What does the FSCS do?
A fund that can pay compensation to customers if a bank or other institution is unable to pay its debts if they have stopped trading or have declared bankrupt
What is the surplus sector?
People in a positive financial situation
More money going in than coming out
What is the deficit sector?
People who are in a negation financial situation
More money going out than coming in and need to borrow money to fund needs etc.
What is the balance sector?
People whose income is equal to their expenditure
