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CF1- chapter 1. Purpose and structure of the UK financial services…

- - - - PRA
        
        part of bank of England. responsibility for authorisation and prudential regulation of certain larger firms like banks and insurers
      - FCA
        
        conduct and market responsibilities. prudential responsibilities for small firms. eg. financial intermediaries and mortgage brokers.
      - PRC
        
        committee of bank of england. operating alongside FPC. formulates policy and instructs PRA
      - FPC
        
        part of bank of england. monitors economy and looks for risks that might destabalise financial system.
  - - - fiscal policy- control of taxation borrowing and government spending methods.
      - monetary policy- control of interest rates and money supply
    - - interest rate increase- when rates go up prices of bonds and property tend to fall. higher interest rates mean people are less willing to borrow. this means expenditure is reduced.
      - interest rates reduce- prices of bonds on secondary market and property start to rise. people are more wiling to borrow and spend. increases expenditure and stimulates demand in the economy.