KEYTERMS TOPIC 8

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CAPITAL
The money or other assets owned by an individual or a business. In the case of a financial services provider, it refers to the funds provided by the shareholders, not deposits from customers.
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CHANCELLOR OF EXCHEQUER
The British Cabinet minister responsible for financial and economic matters and in charge of the Treasury.
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CITIZENS ADVICE
A charity providing free, independent, confidential and impartial advice on citizens’ and consumers’ rights and responsibilities.
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COMPETITION AND MARKETS AUTHORITY
An independent, non-ministerial government department, which works to promote competition between providers so that customers benefit.
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CONSUMER CREDIT
This is another term used for borrowing. It is important to understand that ‘taking credit’ or ‘buying on credit’ refers to borrowing. However, a credit into a bank account means paying money in.
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CREDIT CRUNCH
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.
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CREDIT UNION
A mutual organisation (that is, owned by its members) that provides a range of financial products eg savings accounts and personal loans to members. Members of a credit union must share a common bond.
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CURRENT ACCOUNT
Bank or building society accounts where people can store their money in the form of electronic balances and withdraw it to make payments.
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DEBIT CARD
A card that can be used to withdraw cash, to make face-to-face transactions in, for example, shops, and to make payments online or over the phone.
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DEPOSIT
A sum of money placed by a customer with a bank.
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FINANCIAL CONDUCT AUTHORITY
One of the two main regulators of financial services in the UK (the other is the Prudential Regulation Authority).
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FINANCIAL OMBUDSMAN SERVICE
An independent body set up by Parliament that settles customer complaints about providers at no charge to consumers.
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FINANCIAL POLICY COMMITTEE
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.
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FINANCIAL SERVICE COMPENSATION SCHEME
A compensation scheme that pays compensation to account holders of up to a certain amount per provider if the provider goes into default (in other words cannot pay account holders the money they have in their accounts).
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INDEPENDENT COMMISSION ON BANKING
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.
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INDEPENDENT FINANCIAL ADVISER
A professional who makes financial recommendations to clients, based on available products across a wide range of providers.
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INVESTMENT BANKS
Banks that are involved in trading financial assets such as shares, underwriting issues of shares by other institutions and advising on mergers and acquisitions. Investment banks do not provide services such as current accounts,.
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LENDING CODE
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 Code.
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LIQUIDITY
The assets that a business holds in the form of cash, that can be used to meet immediate demands for payment. (Many assets cannot be used in this way – for example a company that owns a building or machinery would have to sell them
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MONEY ADVICE SERVICE
A consumer information service set up by the government to help people make informed financial decisions.
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MONEY LAUNDERING
The process of making ‘dirty’ money (money gained from criminal activities) ‘clean’ – in other words making it look as though it has been acquired legitimately.
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MORTGAGE
A loan taken out to pay for a property, usually over a long term such as 25 years.
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OFFICE OF FAIR TRADING
The government department that monitored how businesses compete with each other. It was abolished in April 2014 and its responsibilities shared between the Financial Conduct Authority and a new organisation, the Competition and Markets Authority.
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OVERDRAFT
A facility that allows an account holder to withdraw more money than they actually have in their account. An authorised overdraft is agreed with the bank in advance within certain limits. Going overdrawn is unauthorised.
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PAYDAY LOAN
A loan designed to be taken out for only a very short period, which charges a very high APR.
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PAYMENT PROTECTION INSURANCE
An insurance product intended to ensure repayment of loans should a borrower face unexpected events that prevent them from repaying the debt.
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PIN
A secret personal identification number that verifies a user’s identity to a system, eg at a point of sale for debit and credit cards.
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PRUDENTIAL REGULATION AUTHORITY
One of the two main regulators of financial services in the UK (the other is the Financial Conduct Authority).
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RETAIL BANKS
Banks that deal directly with consumers, for example providing current accounts and mortgages.
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SUB-PRIME MARKET
Lending to and borrowing by consumers with untested or poor credit histories.
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TRANSACTION
Buying or selling something.
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TREASURY
Her Majesty’s (HM) Treasury, the government department responsible for development and implementation of financial and economic policy.
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Other cards in this set

Card 2

Front

The British Cabinet minister responsible for financial and economic matters and in charge of the Treasury.

Back

CHANCELLOR OF EXCHEQUER

Card 3

Front

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

Back

Preview of the back of card 3

Card 4

Front

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

Back

Preview of the back of card 4

Card 5

Front

This is another term used for borrowing. It is important to understand that ‘taking credit’ or ‘buying on credit’ refers to borrowing. However, a credit into a bank account means paying money in.

Back

Preview of the back of card 5
View more cards

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