UNIT 4-TOPIC 1

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1a) Define Banks
Main banks, however, sell a full range of financial products in all categories to all kinds of customers. Banks also provide a very wide range of financial services to businesses of all sizes, from small sole traders to large multinational companies
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1b) Define Challenger banks
Any new banks that challenge the dominance of 'the big five'. Examples include; Virgin Money, Metro Bank, TSB, Williams and Glyn, The Post Office and Tesco Bank
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1c) Define Building societies
Are mutual organisations, which means that they are not PLCs and do not have share capital. They are owned by their 'members'. They are not-for-profit organisation and any surplus earned is retained within the business for the benefit of the members
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1d) Define Credit union
Are cooperatives and are owned and controlled by their members; they are part of an international movement and there are some 57,000 credit unions in 105 countries
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1e) Define Insurance companies
The main providers of insurance to individuals and companies. They may be either corporates or mutuals
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1f) Define Friendly socieities
Are also mutual organisations that offer their members a wide range of financial products, which can include savings, investments, insurance, pensions and annuities
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1g) Define Investment fund managers such as pension funds
Pension funds specialise in investing people's pension contributions, which will gives these people an income when they retire
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2) Define Public limited company/ proprietary organisation?
Owned by its shareholders and aim to make profit
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3) Name two banks which the UK government is a shareholder?
Cerberus and The Royal Bank of Scotland
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4) Define Mutual organisation
An organisations owned by its customers, who are also its members, rather than by it's shareholders
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5) What financial products do building societies specialise in?
finsih
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6) Which market segments do building socieities target?
finish
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7) Explain how a small financial services provider depends on services provided by a larger provider?
finish
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8) Define 'Financial intermediation'?
The process of taking in deposits from thise with a surplus and lending those funds out to those who need to borrow
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9) Explain how financial institutions contribute to a sustainable financial system?
Finish
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10) Define Responsible lending?
Finsih
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11) What is a retail bank?
Banks that deal directly with consumers, eg providing current accounts and mortgages
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12) How is an investment bank different from a retail bank?
They do not accept deposits, instead they raise funds on the financial markets, which they then use to provide special services to large corporations and to governments
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13) What are investment banks commonly known as?
'Wholesale' banks
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14) What is a universal bank?
Large banks that carry out both sides of business (Retail business and investment business)
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15) Define Retail ring-fencing?
Separating the deposit-taking part of a bank or building society from the rest of its business so that, in the event of financial difficulties, the ring-fenced deposits of retail customers cannot be uised to pay the debts of the more risky investment
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16) Name the four main services provided by retail banks?
Money transmission, Saving and investment, Lending and Insurance
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17) Name the five main multinational retail banks operating in the UK?
Royal Bank of Scotland Group, HSBC, Barclays, The Lloyds Banking Group and Standard Chartered
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18) What percentage of RBS shares are owned by the government?
71%
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19) Which bank was once part of 'the big five'?
Santander Group
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How do investment banks raise funds if they do not accept deposits from savers?
They raise funds on the finanical markets, which they then use to provide special services to large corporations and to governments
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21) What special services do they provied to large corporations and to governments?
Lend large amounds of money to companies, Help them raise funds frrom investors by issuing shares and bonds in the markets, Advices companies on mergers and take overs, Deal in the financial markets on their own account to make profits for themselves
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22) What do building societies do with profits made?
Any surplis gained is retianed within the business for the benefit of the members
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23) Why is the cooperative bank described as a troubled mutual?
finisg
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Other cards in this set

Card 2

Front

1b) Define Challenger banks

Back

Any new banks that challenge the dominance of 'the big five'. Examples include; Virgin Money, Metro Bank, TSB, Williams and Glyn, The Post Office and Tesco Bank

Card 3

Front

1c) Define Building societies

Back

Preview of the front of card 3

Card 4

Front

1d) Define Credit union

Back

Preview of the front of card 4

Card 5

Front

1e) Define Insurance companies

Back

Preview of the front of card 5
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