Cemap1 Unit 1&2

Dayle Watson
Flashcards by Dayle Watson, updated more than 1 year ago
Dayle Watson
Created by Dayle Watson over 4 years ago
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Certificate Cemap Flashcards on Cemap1 Unit 1&2, created by Dayle Watson on 04/17/2016.

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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 Intermediaries can offer a wide range of deposit accounts to a wide range of depositors, ensures funds aren't all withdrawn at same time.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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