TOPIC 8

Question 1

Citizens advice

Answer 1

A charity providing free, independent, confidential and impartial advice on citizens’ and consumers’ rights and responsibilities.

Question 2

CMA (Competition and markets authority)

Answer 2

An independent, non-ministerial government department, which works to promote competition between providers so that customers benefit.

Question 3

Credit crunch

Answer 3

A reduction in the availability of loans or a tightening of the conditions needed to obtain one. The global financial crisis of
2007–08 began when financial institutions became reluctant to lend funds to one another.

Question 4

FOS (Financial Ombudsman Service)

Answer 4

An independent body set up by Parliament that settles customer complaints about providers at no charge to consumers

Question 5

FPC (Financial policy committee)

Answer 5

A part of the Bank of England that monitors and responds to risk posed to the entire financial services market. Its focus on the whole market makes it a macro-prudential authority.

Question 6

ICB (Independent commission on banking)

Answer 6

A committee formed in June 2010, as a response to the global financial crisis. It considered reforms to the UK banking sector to promote both financial stability and competition.

Question 7

IFA (Independent financial adviser)

Answer 7

A professional who makes financial recommendations to clients, based on available products across a wide range of providers

Question 8

Investment banks

Answer 8

Banks that are involved in trading financial assets such as shares, underwriting issues of shares by other institutions and advising on mergers and acquisitions.

Question 9

Liquidity

Answer 9

The assets that a business holds in the form of cash, that can be used to meet immediate demands for payment.

Question 10

Money Helper

Answer 10

An independent organisation set up by the government to support people to make the most of their money and pensions.

Question 11

PPI (Payment protection insurance)

Answer 11

An insurance product intended to ensure repayment of loans should a borrower face unexpected events that prevent them from repaying the debt.

Question 12

Standards of lending practise

Answer 12

A voluntary code of conduct that sets out good practice for the provision of advice about loans, credit cards, charge cards and
current account overdrafts. It assures customers that subscribed providers follow the Standards and gives information on the
service they should expect

Question 13

Sub-prime market

Answer 13

Lending to and borrowing by consumers with untested or poor credit histories.