Unit 1 - Banks & Banking Flashcards
What is the oldest bank in the world and founded when?
Banca Monte dei Paschi di Siena & in 1472 ( still operating til now)
What’s the oldest bank in the UK?
C. Hoare & Co since 1672 (privately old & still here)
A mutual financial institution which specialises in lending to customers wishing to buy a house is known as:
Building society
What is financial intermediation?
When £ deposited in a bank( by savers) is lent by bank to borrowers. So by accepting deposits from savers & using to make loans to borrowers. Banks function as financial intermediaries!
What is disintermediation?
When lenders and borrowers deal directly with each other & not using a bank as an intermediary!
If I was a customer needing a mortgage and some life assurance, which type of financial organisation would I need to go to?
Investment Bank & On-line bank
What year did Building Societies become demutualised and effectively became like a retail bank?
1986
What is a commercial bank?
Similar to retail banking but for small & medium sized businesses
What is NOT a feature of a Credit Union?
They are owned by shareholders who buy shares in them via the stock market.
Wholesale banking involves borrowing and lending with which types of organisations?
Large corporate clients, other financial institutions, public agencies & governments through the interbank market.
In terms of digital innovations, what does RPA stand for?
Robotic Process Automation
The main purpose of a building society is to:
Raise, primarily from its members, funds for lending to members for the purpose of buying a residential property.
What are Credit Unions?
Non-profit co-operative organisations. They are owned by their members who pool their savings and lend to each other.
What are Digital-only banks?
Banks who have a full banking license and can therefore compete on equal terms with traditional banks.
According to King (2018) at what banking stage is ‘when and where we need it, starting with the emergence of the Smartphones, and a shift to mobile payments’?
Bank 3.0
What year did the first ATM open?
1967
What is cloud computing?
The delivery of computing services, for eg, servers, storage, databases,networking, software, analytics & intelligence.
The stakeholder approach to running a bank states that the bank must always:
Balance the needs of all stakeholders when taking decisions
What are challenger banks & categories of it?
They are small and seem to challenge bigger banks through innovation & food service. Finbold (2022) shows there were 291 challenger banks. Groups;
1. Banks with high street presence
2.digital only banks
3. Challenger banks focusing on business services
What are 3 core functions of the Bank?
- Operating payment mechanisms
- Accepting Deposits
- Making Loans
What is the case study of a non-bank providing payment services directly to customers?
Worldpay- merchant services & payment processing provider launched in 1997, it’s the UK’s leading service provider
What is assets & liabilities from the point of view of a bank?
•Assets- are loans that a bank makes to its borrowers - borrowers owe this £ to the bank
• Liabilities- deposits that a bank accepts from its savers- bank owes this £ to the savers
What are 3 types of transformation?
- Size transformation(aggregation)- banks collect small deposits & repackage into larger loans
- Maturity Transformation
- Risk Transformation
What risk comes with lending money?
Credit Risk
