5163148
Description
Flashcards by Dayle Watson, updated more than 1 year ago
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Created by Dayle Watson
over 8 years ago
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| Question | Answer |
| Why do people use financial intermediaries? | 1.Maturity Transformation 2.Aggregation 3. Risk Transformation 4.Geographic Location |
| What does maturity transformation mean? | Intermediaries can offer a wide range of deposit accounts to a wide range of depositors, ensures funds aren't all withdrawn at same time. |
| What jobs does the Bank of England do? | UK's central bank Issuer of bank notes Banker to banks and government lender of last resort foreign exchange market adviser to the government. |
| What is a propriety organisation? Give an example | An organisation run for the benefit of their shareholders e.g. a bank |
| Income Tax 16/17 | Personal allowance £11,000 Basic rate 20% £11,000-£43,000 Higher rate 40% £43,001-£150,000 Additional rate 45% over £150,000 |
| Classes of national insurance | Class1=Employees’ and employers’ contributions Class2=Self-employed flat rate contributions Class3=Voluntary contributions Class4=Self-employed profit-related contributions |
| Capital Gains 16/17 | Allowance- £11,100 10% or 20%, depending on your tax band, except for second homes- where rates remain 18% and 28% |
| Inheritance Tax | Nil rate band- £325,000 40% |
| Potentially Exempt Transfers | 0-3 years = 40% 3-4 = 32% 4-5 = 24% 5-6 = 16% 6-7 = 8% |
| Key Recommendations of the independent commission on banking. | UK retial ring fencing Capital Bail in and depositor preference Competition Structural reform |
| What does UK retail ring fencing mean? | separating retail banking from investment banking, to safeguard against riskier banking activities. |
| What does bail in and depositor preference mean? | Statutory power to recapitalise banks. |
| Name the money transmission processes | Cash & ATM's Current accounts & basic bank accounts cheques debit cards direct debits and standing orders Credit transfers. |
| The tiers of financial regulation in the UK | 1st European legislation 2nd acts of Parliament 3rd regulatory bodies 4th financial institutions themselves 5th arbitration schemes which customers complaints can be directed. |
| Types of deposit based investments. | Bank Building society accounts Cash ISA's Offshore accounts NS&I products |
| Why do people use deposit based investments? | capital invested remains intact rainy day fund easily accessible short-term savings |
| What are GILTS? | Issued by government to raise money, Low risk investment as the the government won't default on the interest or the capital return. |
| How do gilts work? | Coupon - Interest paid half yearly Redemption date - when government buys back Par Value - what government will pay on the redemption date. |
| What are local authority stocks? | Similar to gilts From local authority Can't be sold on open market don't carry government guarantee interest paid half yearly net of 20% tax |
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