Topic 7 Flashcards
What forms have the changes in the financial system taken?
• New organizations have been established.
• Institutional roles and responsibilities have been redefined.
• Legislation and regulation introduced in the EU and UK.
• Increased consumer protection measures implemented.
• Industry guidelines updated
What benefits have these changes brought to consumers?
• Greater protection and safety in financial systems.
• Increased transparency of operations and financial information.
• More competitive fees for services and products
What are some key impacts of recent financial changes?
• Low interest rates affecting savings and investments.
• Changes in eligibility criteria for financial products and services.
• Changes in the state pension age.
• Modifications to the benefits system, requiring consumers to adapt financial plans for long-term sustainability
What is the state pension age for men and women based on their birth year in the UK
Birth year 1950 Men: 65 / Women: 60
Birth year 1960 66
Birth year 1970 67
Birth yeah 1980 onward 68
How has increased access to technology influenced financial services? And What do these tools offer consumers?
• Financial information and services are now widely available online or via mobile apps.
• Development of tools like budget apps, text services, and advice websites
• Easier ways to manage money.
• Free, unbiased, and reliable financial advice
Name examples of new financial providers, products, and services. And Why should consumers consider these options?
• Providers: Metro Bank.
• Products: Individual Savings Accounts (ISAs), basic bank accounts.
• Services: Current Account Switch Service
• To better plan, choose, and operate their financial products
What is personal financial sustainability affected by?
A: It is affected by the sustainability of the economy in which an individual lives
Which key economic factors influence personal financial sustainability?
A: Interest rates, inflation, house prices, and unemployment rates
How did the government influence economic factors before 1997?
A: By setting monetary policy implemented by the Bank of England
What significant change occurred in 1997 regarding the Bank of England?
A: It was made independent of the government and tasked with setting monetary policy to ensure monetary stability
What did the Bank of England Act 1998 formalize?
It gave the Bank of England responsibility for setting the Bank rate
What was the intention behind giving the Bank of England control over the Bank rate?
A: To use the Bank rate as a tool to meet a Consumer Prices Index (CPI) inflation target of 2%
What is the ultimate goal of setting monetary policy?
A: To deliver stable prices and help create a stable, sustainable economy
How did the Bank of England respond to the 2008 financial crisis?
A: The Monetary Policy Committee (MPC) reduced the Bank rate to 0.5% in March 2009 to stimulate the economy
What further change occurred to the Bank rate in August 2016?
A: It was lowered to 0.25% following the Brexit referendum
What happened to the Bank rate in March 2020 during the COVID-19 pandemic?
A: It was reduced to an historic low of 0.1%
Why was the Bank rate reduced to 0.1% in 2020?
A: In response to the economic instability created by COVID-19
What are the effects of an extremely low Bank rate on savings and borrowing products?
A: It leads to low returns on savings products and low charges on borrowing products
How do savers and borrowers view a low Bank rate differently?
A: Savers wish for an increase in the Bank rate to gain higher returns, while borrowers hope it remains low to keep borrowing costs down
Why is predicting when the Bank rate will increase difficult?
A: Economic conditions and future monetary policy decisions are unpredictable
What are the long-term concerns for individuals regarding a low Bank rate?
A: People are uncertain whether their financial plans are sustainable in the long term. Savings may offer greater returns in the future, and borrowing costs are likely to rise, but the timing is unclear
What announcement did Mark Carney, the governor of the Bank of England, make in August 2013? And Why was this announcement significant?
A: He stated that an increase in the Bank rate would only be considered if the UK unemployment rate fell to 7% or below
It addressed uncertainty and provided a clear economic indicator for a potential increase in the Bank rate.
What are the key factors affecting home affordability?
A:
1. Private rental prices: Moderate increase.
• Evidence: Increased by 1.7% in the 12 months to November 2021 (UK).
2. Average earnings compared to property price: Slight increase.
• Evidence: In 2020, property prices grew faster than earnings in England.
3. Regional differences: Greater affordability challenges in England than Wales.
• Evidence: In 2020, full-time employees in England spent 7.8 times their annual earnings on buying a home, compared to 5.9 times in Wales.
How do low interest rates affect older adults?
A:
• Low interest rates reduce income from savings, making it harder to sustain living expenses.
What is the purpose of a sustainable financial services industry?
A:
• To ensure individuals can sustain personal finances long-term.
• Goals include:
1. Making financial services safer for consumers.
2. Increasing choices in products, services, and providers.
3. Avoiding market failure.
Why is the sustainability of individual finances important?
A:
• Ensures people can manage financial challenges (e.g., low interest rates, rising housing costs).
• Reduces reliance on external support (e.g., family or government).
• Promotes long-term economic stability.
What role do regulatory changes play in sustainable financial services?
- Protect consumers.
- increase transparency in financial markets.
- Improve trust in financial institutions.
• These changes directly contribute to financial stability and sustainability.
What is the aim of the European Union’s financial services policy?
A:
• To deliver stable, secure, and efficient financial markets.
• Achieved through the European System of Financial Supervision (ESFS)
What are the key components of the European System of Financial Supervision (ESFS)?
A:
1. European Systemic Risk Board (ESRB):
• Monitors the entire financial sector for risks that could cause future crises.
• Takes preventative action (to maintain financial stability (2022))
2. Three independent regulatory bodies (established on January 1, 2011):
• European Banking Authority (EBA): Ensures consistent prudential regulation and supervision across the banking sector.
• European Securities and Markets Authority (ESMA):
• Safeguards financial stability in the EU.
• Protects investors and promotes orderly financial markets.
• European Insurance and Occupational Pensions Authority (EIOPA):
• Focuses on short-, medium-, and long-term stability and effectiveness of the financial system.
• Supervises insurance and pensions sectors.
What is the role of the European Systemic Risk Board (ESRB)?
A:
• Monitors the entire financial sector for risks that could cause future crises.
• Takes preventative action to maintain financial stability (2022).
What was Michel Barnier’s explanation of the EU regulatory framework’s aim?
A:
• To coordinate national financial authorities and harmonize technical rules for the financial services sector.
• Member countries are only obliged to implement changes presented as EU directives or regulations.
What is the EU Directive 94/19/EC on Deposit Guarantee Schemes?
A:
• Requires EU countries to offer compensation schemes protecting depositors if an institution fails.
• Sets a minimum compensation of €20,000 per person per institution.
How was the Deposit Guarantee Scheme implemented in the UK?
A:
1. Credit Institutions Regulations 1995:
• Set maximum compensation at £2,000 and 90% of deposits between £2,000 and £35,000.
2. Financial Services Compensation Scheme (FSCS) (2001):
• Replaced earlier schemes to protect depositors.
3. 2009 Update:
• Raised compensation limit to €50,000 and then to €100,000 (approx. £85,000).
What is the European Banking Authority (EBA), and what does it do?
A:
• Established in 2011.
• Works to ensure effective and consistent regulation and supervision of the EU banking sector.
What are the responsibilities of the European Securities and Markets Authority (ESMA)?
A:
• Safeguards financial stability within the EU.
• Protects investors and promotes orderly and stable financial markets.
What are the objectives of the European Insurance and Occupational Pensions Authority (EIOPA)?
A:
• Ensures the short-, medium-, and long-term stability of the EU financial system.
• Provides a consistent regulatory framework for insurance and pensions sectors.
What is Directive 2004/113/EC (EU Gender Directive) and how has it been applied in the UK?
A:
• Establishes equal treatment between men and women in access to goods and services.
• European court judgment prohibits insurers from charging different premiums based on gender.
• In the UK, it led to an amendment in the Equality Act 2010, meaning:
• Young female drivers now pay more for insurance.
• Young male drivers pay less.
• Requires men and women to receive the same annuity rates for pensions, addressing past disparities where women received lower yearly incomes due to longer life expectancy.
What is Transparency Directive, and how has it been implemented in the UK?
A:
• Implemented in the UK in January 2007 via changes to the Financial Services and Markets Act 2000.
Covers the storage and provision of regulated financial information, including:
• Financial reports of providers.
• Annual and half-yearly accounts.
• Interim management statements.
• Disclosure of major shareholder transactions.
Purpose:
• Makes it harder for providers to hide balance sheet deficits.
• Reduces the risk of bank failure.
What changes to motor insurance premiums have resulted from the EU Gender Directive?
A:
Gender can no longer be used to calculate premiums:
• Young female drivers face higher costs as they were previously charged less.
• Young male drivers benefit from lower costs as they were previously charged more due to a higher likelihood of accidents.
What are the key implications of the Transparency Directive for financial services providers?
A:
• Providers must publish detailed and accurate financial reports.
• Transparency reduces the likelihood of hidden deficits in financial statements.
• Increases confidence in the stability of financial markets and reduces systemic risks like bank failures.
How does the EU Gender Directive affect pension annuity rates?
A:
• Men and women must now be offered equal annuity rates.
• Addresses past discrimination where women received lower annual incomes due to longer life expectancy.
What is Directive 2013/36/EU, and why is it significant?
Back: Directive 2013/36/EU, known as the Capital Requirements Directive (CRD) IV, is an amendment to an earlier version of the directive. It specifies the liquid assets that financial providers must hold to meet customers’ withdrawal needs during times of external funding unavailability. This reduces the likelihood of a “run on the bank” and minimizes the chance that taxpayer money will be needed to bail out banks.
How does Capital Requirements Directive (CRD) IV reduce the risk of bank failures?
Back: CRD IV ensures banks hold sufficient liquid assets to meet customer withdrawal demands during periods without external funding. This prevents panic-driven withdrawals (“run on the bank”) and decreases the reliance on taxpayer-funded bailouts.
What provisions does the Financial Conduct Authority (FCA) Remuneration Code introduce under CRD IV?
Back:
1. 50% of bonuses for senior managers, risk takers, and control staff must be paid as shares.
2. A portion of the bonuses must be deferred, ensuring payouts are based on actions contributing to the bank’s long-term sustainability.
What is the purpose of the 2:1 cap on bonuses introduced by CRD (Capital Requirements Directive) IV?
Back: The 2:1 bonus cap limits bankers’ bonuses to 100% of their base salary, or up to 200% with shareholder approval. This measure reduces excessive risk-taking by capping potential earnings from profits.
How does CRD IV link personal financial sustainability to regulatory actions?
Back: CRD IV highlights how directives, regulations, and EU court rulings influence financial sustainability. For example, a 2009 ruling split Lloyds TSB into two banks, increasing competition and consumer choice in the UK banking sector.
What is the purpose of recent legislation in the UK financial services industry?
Back: Recent legislation in the UK ensures the sustainability of the financial services industry and impacts personal financial sustainability. These changes aim to promote fair, clear, and non-misleading practices by financial providers.
What is the Banking Conduct of Business Sourcebook (BCOBS), and when was it introduced?
Back: The Banking Conduct of Business Sourcebook (BCOBS) was introduced on 1 November 2009 by the Financial Services Authority (FSA). It requires banks to communicate fairly, clearly, and without misleading consumers, addressing information failure. It is now operated by the Financial Conduct Authority (FCA).
What does the FCA’s Senior Managers Regime, Certification Regime, and Conduct Rules ensure?
Back: These frameworks ensure that senior bankers and certain staff providing regulated financial advice are ‘fit and proper’ by assessing their:
1. Honesty, integrity, and reputation.
2. Competence and capability.
3. Financial soundness.
Certain staff must be approved before performing their roles.
How has the FCA replaced the former Approved Persons Regime?
Back: The FCA replaced the former Approved Persons Regime with the Senior Managers Regime, Certification Regime, and Conduct Rules. These ensure higher standards for individuals in key financial roles.
What is the purpose of the Credit Act 2006?
Back:
• It increased the powers of the Office of Fair Trading (OFT) to investigate consumer credit license applicants, impose conditions, and charge penalties up to £50,000 for non-compliance.
• Ensures lenders’ products meet standards that protect borrowers’ interests.
Note: The FCA took over OFT’s consumer credit responsibilities in April 2014.
What are the key provisions of the Financial Services and Markets Act 2000?
Back:
• Introduced the Financial Ombudsman Service.
• Established the Financial Services Authority (FSA) as the regulator and defined the regulatory framework.
Note: The FSA was replaced under the Financial Services Act 2012.
What does the Banking Act 2009 aim to achieve?
Back:
• Allows the Bank of England to close a bank before insolvency to protect the wider financial services industry.
• Provides the Bank of England with a statutory financial stability objective.
What are the objectives of the Financial Services Act 2010?
Back:
• Made financial stability a key FSA regulatory objective.
• Empowered HM Treasury to regulate remuneration policies in financial services to discourage excessive risk-taking by bank staff.
• Established the Consumer Financial Education Body (now replaced by MoneyHelper).
What changes were introduced in the Financial Services Act 2012?
Back:
• Established the Financial Policy Committee (FPC) to monitor financial system risks and take action for sustainability.
• Replaced the FSA with the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) to ensure customer protection, integrity, and competitive markets.
What does the Financial Services (Banking Reform) Act 2013 introduce?
Back:
• Introduced a ‘ring fence’ around consumer and small business deposits to separate them from riskier banking activities.
• Gave the PRA powers to enforce this separation and introduced penalties for reckless misconduct by bankers.
• Ensured depositors’ FSCS preference in insolvency and introduced a cap on payday loans.
What amendments were made by the Finance Act 2016?
Back:
• Adjusted laws related to national debt and public revenue.
• Amended taxes, including income tax, corporation tax, capital gains tax, inheritance tax, VAT, stamp duty land tax, and measures to tackle tax avoidance and evasion.
What are the effects of implementing new financial legislation and regulation on consumers and the industry?
A:
• May negatively impact consumers if providers raise fees on borrowing and reduce savings returns.
• Strengthens the sustainability of the financial services industry.
• Enhances personal financial sustainability by reducing provider/product failures, increasing transparency, and offering more choice
Why is financial sustainability enhanced under new legislation?
A:
• Fewer provider and product failures.
• Increased transparency in provider operations.
• More choice of products and providers
What are the key characteristics of a sustainable financial plan?
A:
• Informed.
• Flexible.
• Fluid.
• Realistic.
What kind of information do consumers need to create and monitor a financial plan?
A:
• Free, unbiased, independent, and reliable information
Where can consumers find unbiased financial information and advice?
A:
• Online resources and in-person organizations like:
• Citizens Advice
• National Debtline
• StepChange Debt Charity
• Government website (covers benefits, work, pensions, and debt)
What recent changes in the financial industry help consumers access financial information?
A:
• Availability of information via:
• Internet.
• Brochures.
• Radio/TV programs.
• Newspapers/journals.
What is MoneyHelper and its purpose?
A:
• A service launched in 2021, combining:
• Money Advice Service
• Pension Wise
• The Pensions Advisory Service
• Provides independent advice to improve financial management
What topics does MoneyHelper address?
A:
• Pension rules and current regulation.
• Life events (e.g., retirement, buying a home).
• Budgets and borrowing calculators.
• Tools and news related to personal finance
Why might financial information in newspapers and journals sometimes be unreliable?
A:
• It may be biased
What regulatory changes were introduced to ensure unbiased professional financial advice?
A:
• Independent Financial Advisers (IFAs) can no longer receive commissions from the providers of investment products they sell.
• IFAs must instead be paid by means of fees
Why did the FSA introduce the change regarding how IFAs are paid?
A:
• To prevent advisers from recommending products that offer them higher commissions but may not be the best choices for customers
What steps has the FCA taken to ensure fees for financial advice are reasonable?
A:
• Stated that payments from product providers to advisory firms should be:
• Based on reasonable reimbursement for costs incurred by the advisory firms.
• Designed to enhance the quality of service provided to customers
What does the FCA (2016b) emphasize about payments to advisory firms?
A:
• Payments should be proportional to the costs incurred by advisory firms.
• Payments must improve the quality of service provided to customers
What transparency measures did the FCA (2013) introduce for packaged bank accounts?
A: Providers must:
• Check that the consumer is eligible to make claims under each policy included in the account and share this information.
• Provide an annual statement explaining how to claim benefits included in the packaged account.
• Ensure advisers verify the suitability of each policy in the account and inform the consumer if some are not suitable
How do these FCA changes benefit consumers with packaged accounts?
A:
• They help consumers assess if a packaged account is good value for their needs
What factors have driven changes to providers, products, and services in the UK market?
A:
• Regulation.
• Super-complaints and market investigations.
• Economic conditions.
• Ageing population and demographic changes
What are challenger banks, and how do they improve consumer choice?
A:
• Challenger banks, like Monzo Bank and Starling Bank, are newer banks competing with established banks (e.g., Barclays, HSBC).
• They increase consumer choice and may offer higher interest rates, lower fees, and charges due to competition
Why did consumers rarely switch bank accounts in the past, and how has this changed?
A:
Past Reasons:
• Time and effort involved in switching.
Solution:
• The Current Account Switch Service (introduced in 2013) makes switching accounts simple and fast
What is the Current Account Switch Service, and how does it help consumers?
A:
• Ensures switching takes no more than 7 working days.
• Transfers all balances, incoming payments (e.g., salary), and outgoing payments (e.g., direct debits).
• Backed by the Current Account Switch Guarantee, which refunds consumers if they lose money due to errors
What steps must consumers take to switch bank accounts using the Current Account Switch Service?
A:
• Choose their switch date.
• Complete just two forms.
What happens on Day 1 of switching current accounts?
Answer: On Day 1, the customer agrees on the switch date with the new provider.
What happens during Days 2-6 of the current account switching process?
Answer:
• The new provider begins transferring payments from the old provider.
• The customer can still use the old account during this period.
What happens on Day 7 of switching current accounts?
Answer:
• The old account is closed.
• Funds are transferred to the new account.
What service is provided to address payments made into or out of the old account after the switch?
Answer: A redirection service lasting 13 months ensures that payments made into or out of the old account by mistake are transferred to the new account.
How did the effectiveness of the account switching service impact switching rates?
Answer: In the last three months of 2013, current account switching increased by 17% compared to the same period a year earlier.
What are basic bank accounts, and why were they introduced?
Answer:
Basic bank accounts are financial products designed to ensure that individuals who previously lacked access to banking services can now access financial services.
How do ISAs encourage saving?
Answer: ISAs encourage people to save by offering a tax-free return on their savings.
What change occurred on 6 April 2016 regarding savings interest for basic-rate taxpayers?
Answer:
Since 6 April 2016, the first £1,000 of savings interest earned on non-ISA products is tax-free for basic-rate taxpayers.
What other government changes were introduced alongside new banking products?
Answer:
The government introduced changes to the benefits system and the state pension to complement the new financial services.
What did research in 2013 reveal about housing affordability for typical families?
Answer: Research in 2013 showed that a typical family could afford less than 10% of suitable homes in more than half the country.
How did the government respond to rising house prices and high deposit requirements?
Answer: The government introduced affordable home ownership schemes in England, specifically targeting first-time buyers. These schemes offer help through:
1. Equity loans.
2. Buying through shared ownership.
How does the Help to Buy: equity loan scheme work?
Answer:
• The government lends up to 20% of the purchase price of a new-build home (40% in London).
• No fees are payable for the first five years of ownership.
• Borrowers must put down a 5% cash deposit and arrange a repayment mortgage of at least 25% of the property purchase price.
• A maximum property purchase price is set, determined by the region
How does the buying through shared ownership scheme work?
Answer:
• Buyers purchase a share of the property and pay the remainder as rent.
• This scheme applies to leasehold properties, where ownership reverts to the landlord when the lease ends.
• The share of a home you can buy is typically between 25% and 75%, but in some cases, it can be as low as 10%.
Which governments manage their own affordable housing schemes?
Answer:
• The Scottish government, Welsh government, and Northern Ireland Housing Executive run their own affordable housing schemes.
What was the Help to Buy ISA, and when was it available?
Answer:
The Help to Buy ISA was introduced by the Conservative–Lib Dem coalition and was available between 2015–2019. It was designed to help people save for their first home.
How did the government contribute to the Help to Buy ISA?
Answer:
For every £200 saved, the government added an extra £50, up to a maximum bonus of £3,000.
Can new savers open a Help to Buy ISA, and what happens to existing savers?
Answer:
• Help to Buy ISAs are no longer available for new savers.
• Existing savers can continue to pay into their accounts until November 2029.
What new products have providers introduced to meet consumer needs?
Answer:
Providers have introduced:
• Islamic banking products to meet the needs of certain consumer groups.
• Many new services offered due to advances in technology.
What did the Office for National Statistics (ONS) identify regarding internet access?
Answer:
The ONS identified that access to the internet has grown rapidly in Great Britain.
What percentage of UK households had internet access in 2020, and how did it change since 2006?
Answer:
• 96% of households had internet access in 2020.
• This increased from 57% in 2006.
What percentage of UK adults accessed the internet daily in 2020, and how has this changed since 2006?
Answer:
• 89% of adults accessed the internet daily in 2020.
• This increased from 35% in 2006.
What percentage of UK adults bought goods or services online in 2020, and how does this compare to 2008?
Answer:
• 87% of adults bought goods or services online in 2020.
• This increased from 53% in 2008.
What percentage of UK adults accessed their bank account online in 2020, and how does this compare to 2007?
Answer:
• 76% of adults accessed their bank account online in 2020.
• This increased from 30% in 2007.
What challenges do individuals without internet access face?
Answer:
• They are disadvantaged in accessing financial services online.
• Branch and telephone services are often reduced as providers encourage consumers to use their websites to save costs.
How does internet access help individuals exercise control over their finances?
Answer:
Access to laptops, tablets, and smartphones allows people to:
• Use online and mobile banking for 24/7 financial management.
• Explore and use budget planners and apps like Money Dashboard to group and track spending.
• Make faster payments to ensure bills are paid on time.
What services do online and mobile banking enable?
Answer:
• Access information and apply for financial products/services.
• Operate accounts and transfer funds.
• Make payments and manage money 24/7 from any location with internet access.
How do apps and calculators help manage personal finances?
Answer:
• Tools such as budget planners and apps (e.g., Money Dashboard) enable users to:
• Record transactions.
• Group spending into categories (e.g., food, travel, fuel).
• Track and manage expenses effectively.
What are the benefits of faster payment systems?
Answer:
• Payments are credited to recipients within a few hours.
• Ensures bills (e.g., credit card repayments) are paid on time.
What are some new sources of borrowing, and how do they benefit users?
Answer:
• Peer-to-peer lending sites (e.g., Funding Circle) are examples of new borrowing sources.
• They provide an alternative to traditional lenders.
How do product comparison sites and bill switching services help consumers?
Answer:
• Enable users to find deals that match their needs.
• Help reduce costs by making switching providers easier.
What are some examples of new ways to make digital payments?
Answer:
• Pay by Bank app for mobile payments.
• Google Wallet as a digital payment platform.
• Increased acceptance of alternatives like PayPal.
• Use of virtual currencies such as Bitcoin.
What is Bitcoin, and who created it?
Answer:
• Bitcoin is a virtual currency not linked to any other currency or backed by a government or central bank.
• Created by an individual or group called Satoshi Nakamoto in 2009.
What is Bitcoin mining?
Answer:
• Mining involves solving mathematical problems on a computer to unlock and collect more Bitcoin.
• People discover a hidden series of letters or numbers matching Bitcoin security keys.
What are key characteristics of Bitcoin?
Answer:
• Held in online wallets, not represented by physical coins or notes.
• Not regulated, and transactions are difficult to trace, raising concerns about potential illegal use.
• Valuation is challenging against other currencies but is traded on exchanges like Mt Gox in Tokyo.
What was a notable use of Bitcoin in 2014?
Answer:
• The University of Cumbria experimented with accepting Bitcoin as payment for tuition.
What is the European Union (EU)?
.
Answer:
• An economic partnership between member states designed to increase social and economic stability through a single market.
• Has its own currency, the euro
What does the term ‘Brexit’ mean, and when was the referendum held?
Answer:
• A combination of ‘Britain’ and ‘exit,’ referring to the UK’s withdrawal from the EU.
• The 2016 referendum results:
• 51.9% voted to leave.
• 48.1% voted to remain.
Who were the key leaders involved in Brexit, and what were the main events?
Answer:
1. David Cameron resigned as UK Prime Minister after the referendum.
2. Theresa May triggered Brexit in March 2017, intending to leave in 2019.
3. Boris Johnson replaced Theresa May in July 2019, leading the UK to leave the EU on 31 January 2020.
What challenges arose during Brexit negotiations?
Answer:
• The UK and EU faced difficulties negotiating a withdrawal agreement.
• Gina Miller legally challenged the government’s decision to proceed without Parliament’s approval.
• Withdrawal agreements failed to pass in Parliament multiple times, delaying Brexit.
The EU aims to deliver stable, secure and efficient financial markets throughout Europe via:
A. The European system of financial supervision
B. The European Central Bank
C. The European Commission
D. A European army
A
Over the last 12 months private rental prices have:
A. Stayed the same
B. Decreased
C. increased
D. Fluctuated dramatically
C
Those brown from the 1980s onwards will be entitled to their state pension at the age of 68
true
False
True
The fscs was established by the:
A. Financial services (banking reform) act 2013
B. Financial services act 2010
C. Financial markets and services act 2000
D. Financial services and markets act 2000
D
Over what percentage of households now have access to the internet?
A. Over 80 per cent
B. Over 70 per cent
C. Over 60 per cent
D. Over 50 per cent
A
Under the government’s ‘help to buy’ scheme borrowers need to put down a deposit of:
A. 5 percent
B. 10 percent
C. 15 percent
D. 20 percent
A
Under the FCA’s transparency rules, when consumers apply for a packaged bank account the provider must:
A. Check that the consumer would be eligible to make a claim under each policy in the package account, both now and in the future
B. Provide a half yearly statement, explaining how to claim each of the benefits included in the packaged account
C. Ensure advisers who recommend packaged accounts check whether each policy is suitable and tell the customer if some are not
D. Provide monthly statements, explaining how to claim each of the benefits included in the packaged account
C
As a result of the gender directive:
A. Women now pay more for their life insurance than men
B, women now pay the same for their life insurance as men
C. Women now pay less for their life insurance than men
D. Women now pay nothing for their life insurance
B
The capital requirements directive (CRD) required financial services firms to store and provide regulated information in a specified manner.
True
False
False
An example of a ‘big five’ bank is:
A. Santander
B. Virgin money
C. Williams and Glyn
D. Alom
A
Independent financial advisers (IFAs) must be paid by:
A. Commission only
B. Fees only
C. A combination of fees and commission
B
In what year was the BOE given independence from political control?
A. 1987
B. 1997
C. 2007
D. 2017
B
What does the European Union (Withdrawal Agreement) Act 2020 address?
A:
1. How the UK will make agreed payments to the EU for many years.
2. Practicalities of customs and regulatory borders between Great Britain and Northern Ireland to avoid a hard border.
3. Establishment of an independent monitoring authority to handle complaints of EU nationals in the UK
When did the second phase of UK-EU negotiations take place, and what was its focus?
A: During the UK’s transition period, which ended on 31 December 2020. It focused on ensuring a “level playing field” by maintaining common standards on workers’ rights and social and environmental regulations
What are the pros (7) of Brexit for the UK
- The UK will not need to contribute to the EU budget.
- Reduction in bureaucracy and regulatory burden for small and medium-sized enterprises.
- Potential economic revitalization as a standalone economy.
- Scotland may stay within the UK due to uncertainty in Europe.
- Freedom to pursue trade with significant growing economies like China, India, and the US.
- Increased control over immigration to better govern the UK economy.
- Greater control over its own affairs
What are the cons (8) of Brexit for the UK
- Loss of free trade and increased import tariffs may reduce international trade and GDP.
- Loss of foreign direct investment from the EU.
- Uncertainty of trading terms with other countries.
- Potential loss of reputation as a financial hub, affecting central bank access to the EU.
- EU workers contribute more to the UK economy in fiscal terms than they cost.
- Potential job losses if trade suffers.
- Employment and travel may become harder or more expensive.
- UK citizens abroad may need to return or apply for work visas.
What uncertainties remain about Brexit’s long-term effects?
A: The long-term effects are unknown, and arguments for and against Brexit continue to shape public and political discourse
