IFS Topic 1

1.

1 point

Under Basel III what methods can banks use to improve their capital ratio?

making less risky investments/loans (to strengthen their risk -weighted assets)

reducing the amount they lend

having paid a dividend moratorium which means that the profits banks generate are not paid out to investors (until their capital improves)

raising new capital from investors

2.

1 point

The lending code covers good practice in relation to;

loans, credit cards, charge cards, current account overdrafts

mortgages, factoring, charge cards, current account overdrafts

loans, credit cards, payday loans, current account overdrafts

mortgages, credit cards, charge cards, current account overdrafts

3.

1 point

CSR and ethics are similar as both are concerned with values, objectives and decisions based on something other than just the pursuit of

profit

dreams

cash

revenue

4.

1 point

The FCA has considerable power over the financial services industry. This includes;

ability to ban financial products

ability to fine banks for bad practice

publish details of misleading financial promotions and malpractice, such as misselling

ability to award compensation for malpractice

5.

1 point

Basel III reforms target

bank level or microprudential, regulation, which will help raise the resliance of individual banking institutions in periods of stress

macroprudential, system wide risks that can build up across the banking sector, as well as the pro-cyclical amplification of these risks over time.

Basel III regulations contain several important changes for banks' capital structures.

in combination with other measures, these regulations are likely to help produce a more stable financial system. Read more: http://www.investopedia.com/articles/economics/10/understanding-basel-3-regulations.asp#ixzz3cBB7INFN

6.

1 point

What are the 8 principles of the Date protection act

fairly and lawfully processed, processed for limited purposes, adequate, relavant and not excessive, accurate and up to date, not kept for longer than is necessary, processed in line with the data subject's rights, secure in a safe and secure location, not transferred to otht lever countries outside the EEA unless that country ensures the same level of protection.

fairly and lawfully processed, processed for limited purposes, adequate, relavant and not excessive, accurate and up to date, not kept for longer than is necessary, processed in line with the data subject's rights, secure in a safe and secure location, not transferred to other countries outside the EEA unless that country ensures an equivalent level of protection.

fairly processed, processed for everyday purposes, adequate, relavant and not excessive, accurate and up to date, not kept for longer than is necessary, processed in line with the data subject's rights, secure in a safe and secure location, not transferred to other countries outside the EEA unless that country ensures an equivalent level of protection.

fairly and lawfully processed, processed for limited purposes, adequate, relavant and not excessive, accurate and up to date, not kept for longer than is necessary, processed in line with the data subject's rights, secure in a good location, not transferred to other countries outside the EEA unless that country ensures an equivalent level of protection.

7.

1 point

The lending code is a self regulatory code that sets the minium standards of good practice that all participants must adhere to when dealing with;

consumers

community enterprises

small charities (less that £1m income)

micro enterprises

8.

1 point

What are the key issues of corporate governance set out by the Basel committee on banking supervision?

clear lines of responsibility should be set and enforced throughout the organisation

the board should be appropriately involved in approving the bank's strategy

the risks generated by operations that lack transparency should be adequately managed.

compensation policies should be consistent with the bank's long term objectives

9.

1 point

Who provides guidance on moving banking services to a new provider;

10.

1 point

Senior management should ensure that the bank's activities are consistent with the business strategy, risk tolerance/appetite and policies approved by the board.

True

False

11.

1 point

What is the money advice service?

an independent organisation that provides money advice for consumers in the UK

an independent organisation that provides financial advice for consumers in the UK

an independent organisation that provides money advice for consumers in England

a government organisation that provides money advice for consumers in the UK

12.

1 point

Under TCF, firms must

demonstrate they are delivering fair outcomes

have a culture withing the firm of fair treatment of customers

have no serious failings,

measure performance of customer fairness issues relevant to their business

13.

1 point

The way of life that we pursue at present can continue in the future is called?

14.

1 point

The banking reform act gives the governement the power to ensure that banks are more able to ______

offer better interest rates

grow capital

absorb losses

lend funds

15.

1 point

A sustainable and successful banking industry is built on solid foundations of

highly professional standards

highly enviable and professional standards

highly ethical and professional standards

highly professional behaviour

16.

1 point

The ability of financial markets to keep going is based on?

17.

1 point

The banking reform act imposes higher standards of conduct on the banking industry by introducing a__________________that leads to bank failiure

prosecutions for reckless misconduct

financial fine for reckless misconduct

criminal sanction for reckless misconduct

18.

1 point

Ethics are about what is right and what is wrong and have moral and cultural connotations that extend beyond purely legal and regulatory requirements

True

False

19.

1 point

What will introduce a cap on payday loans?

basel III

banking reform act

fca

governement

20.

1 point

What can be a weakness if a major player in the system were to fail?

high balance sheets

capital exposure

interpendence

responsibility

21.

1 point

Who have taken over the FSA's responsibilities in relation to the to the FSCS?

PIA

PRA

Bank of England

FCA

22.

1 point

The banking reform act will ensure that the ______ can hold banks to accoutn for the way they separate their retail and investment activities, giving it powers to enforce the full separation of individual banks

Financial Conduct Authroity

Prudential regulation authroity

The bank of england

The government

23.

1 point

Based III introduced:

24.

1 point

The Banking reform act will _______deposits of people and small businesses to separate the high street from the trading floor adn protect taxpayers

give value to

ring fence

enahance

protect

25.

1 point

What is the six defined customer outcomes that show a financial organisation is treating its customers fairly?

fair treatment, products and services services meet the needs of consumers, consumers provided with clear information, receive suitable advice, products that perform as the organisation has let them to expect, no bad advice

fair treatment, products and services services meet the needs of consumers, consumers provided with clear information, receive suitable advice, products that perform as the organisation has let them to expect, no unreasonable post-sale barriers

a manager available all the time, products and services services meet the needs of consumers, consumers provided with clear information, receive suitable advice, products that perform as the organisation has let them to expect, no bad advice

a manager available all the time, good value products and services services meet the needs of consumers, consumers provided with clear information, receive suitable advice, products that perform as the organisation has let them to expect, no bad advice

26.

1 point

The banking reform act gives______protected under the FSCS preference if a bank enters insolvency

depositors

consumers

lenders

savers

27.

1 point

What are the four main objectives of the Financial Conduct Authority?

Regulation, Protection, Promotion, Enforcement

Regulation, Security, Promotion, Enforcement

Regulation, Protection, Championing, Enforcement

Regulation, Protection, Championing, Investment

28.

1 point

What are the PRA's (Prudential regulation authority) two statutory objectives?

to secure an appropriate degree of protection for policyholders/investors

to promote the profitability and soundness of banks, building societies, credit unions, insurers, and major investment firms

to ensure an appropriate degree of protection for policyholders/investors

to promote the safety and soundness of banks, building societies, credit unions, insurers, and major investment firms

29.

1 point

What does subprime refer to?

People who have high mortgages and loans

a group of people who have lower incomes and poor credit histories

People who have poor credit histories and lost of cash

People who are past their prime

30.

1 point

What is a vital element of the relationship between a bank and its customers?

31.

1 point

What are the three pillars of sustainability?

Social sustainability

Environmental sustainability

Economic sustainability

Fiscal responsibility

32.

1 point

What should a board do to fulfil their responsibilities for a bank?

exercies sound objective judgement and have and maintain appropriate qualifications and competance

follow good governance practices for its own work as a board

be supported by competent, robust and independent risk and control functions for which the board provides effective oversight.

provide support of its people in their organisation

33.

1 point

A company with an active Corporate social responsibility policy is showing that it is?

To have a positive impact on the environment

Trying to take responsibility for its actions

To have a positive impact on its consumers, employees and all other stakeholders

To have a positive impact on its balance sheet

34.

1 point

What structure replaced the FSA?

A new structure comprising of the FSA, FPC, PRA and the FCA

A new structure comprising of the Bank of England, FPC, PRA and the FCA

A new structure comprising of the Bank of England, FIA, PRA and the FCA

A new structure comprising of the Bank of England, FPC, PRA and the government

35.

1 point

Compliance with the lending code is independently monitored and enforced by the lending standards board to ensure that subscribers are compliant with

the consumer credit act 1974, the consumer credit (EU Directive) Regulations 2010, the Equality Act 2010, the FSA

the consumer credit act 1974, the consumer credit (EU Directive) Regulations 2010, the Equality Act 2010, Other relevant legislation

the consumer credit act 1974, the bank of England, the Equality Act 2010, Other relevant legislation

the FCA, the consumer credit (EU Directive) Regulations 2010, the Equality Act 2010, Other relevant legislation

36.

1 point

What are the FCA's three purposes?

to be responsible for the protection of consumers

to be responsible for ensuring financial markets operate with integrity

to require organisations to put the wellbeing of their customers at the heart of how they run their business

to promote effective competition

37.

1 point

The banking reform act will impose_______on the banking industry by introducing a criminal sanction for reckless misconduct that lead to bank failiure

great levels of scrutiny

higher levels of protection for consumers

higher standards of conduct

greater levels of assistance

38.

1 point

What are the key issues of corporate governance set out by the Basel committee on banking supervision?

the board should be appropriately involved in approving the bank's strategy

compensation policies should be consistent with the bank's long term objectives

the risks generated by operations that lack transparency should be adequately managed.

clear lines of responsibility should be set and enforced throughout the organisation

39.

1 point

What is the FPC?

Is charged with identifying, monitoring and acting to remove or any systemic risks

Is charged with identifying, monitoring and acting to remove or any fraud risks

Assists with identifying, monitoring and acting to remove or any systemic risks

Is charged with identifying, working on and acting to remove or any systemic risks

40.

1 point

What are the objectives of bank regulation?

Have minimum requirements

Have supervisory review

Have treatment of customers fairly at the heart of their culture

Have market discipline

41.

1 point

Corporate social responsibility is a form of