Unit 3 Flashcards
Sustainability
situation in present can continue into future
environmental sustainability
reducing human impact on environment so natural resources can be sustained
Social sustainability
communities of peace that focus on sustainable practices
Economic sustainability
economic activity can continue in future, high GDP = more output of resources
Sustainable financial system
secure system that avoids huge crash
Recession
high unemployment/low economic growth
systemic risk
risk that effects whole system due to interconnected relations
systemically important financial institution’s (SIFIs)
the large firms that can cause failure
Financial contagion
problems of one group effect other
Too big too fail
consequences of large banks failure would be too much to handle
moral hazard
expectation that governments will bail out providers which leads to bad management
Banking act
2009
BoE power to set up special resolution regime (SRR) to deal with failing banks
How are banks supposed to be more sustainable
More liquid assets and capital
heavily rely on customer deposits and have tighter lending
Provider sustainability
sustainable model that is less likely to fail
stakeholder groups
shareholders
directors - accountable under financial services act 2013
consumers - if failure cant use finances
employees - need training for sustainable practise
