LIBF Key Terms from Topic 1 UNIT 4

The role of the Competition and Markets Authority (CMA) is to:

• regulate financial markets

• enforce competition and consumer law

• manage public sector budgets

• oversee environmental regulations

Counterparties in financial transactions are considered as:

• Individuals or entities on both sides of a financial transaction

• Only the buyer in a financial transaction

• Only the seller in a financial transaction

• None of the above

A credit union is a type of financial institution. What services does it typically provide?

• Savings and checking accounts, loans, and credit cards

• Only savings accounts

• Only loans

• Only credit cards

What does divestment mean in a financial context?

• The process of investing in new assets

• The act of selling off assets for financial or ethical reasons

• The acquisition of new companies

• The increase in asset value over time

The function of the Financial Conduct Authority (FCA) is to:

• regulate financial markets and firms in the UK

• provide financial advice to individuals

• manage the UK's national budget

• issue currency for the UK

A financial intermediary is defined as:

• A person who directly invests in stocks and bonds

• An institution that facilitates the channeling of funds between lenders and borrowers

• A government agency that regulates financial markets

• A company that provides insurance services

What is financial intermediation?

• A process where financial institutions act as intermediaries between savers and borrowers.

• A method of direct investment in the stock market.

• A government policy to regulate financial markets.

• A type of insurance for financial assets.

The role of the Financial Ombudsman Service (FOS) is to:

• resolve disputes between consumers and financial businesses

• provide financial advice to consumers

• regulate financial markets

• offer loans to consumers

What does the Financial Policy Committee (FPC) do?

• Regulates the stock market

• Sets interest rates

• Monitors and acts to remove or reduce systemic risks to the UK financial system

• Manages the national budget

The purpose of the Financial Services Compensation Scheme (FSCS) is to:

• provide financial education to consumers

• compensate consumers when financial firms fail

• regulate financial markets

• offer investment advice