Professional Banker Certificate chapter 1 2025/2026 QUESTIONS
AND ANSWERS GUARANTEE A+
intermediary - the bank functions as a financial intermediary between borrowers and savers
financial intermediary - process of pooling funds from different sources and using these to
provide loans and make investments
Bancassurance - The development of insurance and life assurance provision by banks
Bancassurers - Insurance companies that are subsidiaries of banks and building societies and
whose primary market is the customer base of the bank
Commercial operation - they are banks operated as companies to generate profit for shareholders,
they make money by dealing in money
How banks make money - Lending money and charging interest, charging fees for products and
investing the money deposited by savers
Liquidity - Ability of a debtor to pay their debts as they fall due
Notes and Coins - physical cash held in tills, branch safes and cash machines
Balances with the Bank of England - There is a statutory requirement for banks to hold non-
operational, non-interest bearing deposits with the bank of England
Loans and advances to banks - Short term loans made from one bank to another
, Bills - Promises to pay money on a stated date, they are negotiable which means they can be
bought and sold in the market
Investments - Can consist of government stock (gilts) and shares in other companies, as well as
shareholdings in subsidiary companies of the bank, such as the finance house
Advances - Loans made by the bank to its customers, biggest asset of a bank
1708 bank act - Restricted the Bank of England to 6 partners due to a monopoly in joint stock
banking
Bank Charter Act 1833 - Authorised joint stock banks to open branches within a 65 mile radius
of London provided they did not issue notes
Country Bankers Act 1826 - Permitted the creation of joint stock banks outside a 65 mile radius
of london with the right to issue notes
Treasury Committee - 1918 - set to examine bank mergers as fears were expressed about the size
and influence of large banks
The Bank of Scotland - Established in 1695 to meet the needs of commerce and began issuing
notes and making loans
The Royal Bank of Scotland - 1727, thus Scotland gained two joint stock banks to England's one
Overdrafts - Introduced by the Royal Bank of Scotland in 1728
Branch banking - Scotland developed a network of branches which added to the stability of the
banking system
AND ANSWERS GUARANTEE A+
intermediary - the bank functions as a financial intermediary between borrowers and savers
financial intermediary - process of pooling funds from different sources and using these to
provide loans and make investments
Bancassurance - The development of insurance and life assurance provision by banks
Bancassurers - Insurance companies that are subsidiaries of banks and building societies and
whose primary market is the customer base of the bank
Commercial operation - they are banks operated as companies to generate profit for shareholders,
they make money by dealing in money
How banks make money - Lending money and charging interest, charging fees for products and
investing the money deposited by savers
Liquidity - Ability of a debtor to pay their debts as they fall due
Notes and Coins - physical cash held in tills, branch safes and cash machines
Balances with the Bank of England - There is a statutory requirement for banks to hold non-
operational, non-interest bearing deposits with the bank of England
Loans and advances to banks - Short term loans made from one bank to another
, Bills - Promises to pay money on a stated date, they are negotiable which means they can be
bought and sold in the market
Investments - Can consist of government stock (gilts) and shares in other companies, as well as
shareholdings in subsidiary companies of the bank, such as the finance house
Advances - Loans made by the bank to its customers, biggest asset of a bank
1708 bank act - Restricted the Bank of England to 6 partners due to a monopoly in joint stock
banking
Bank Charter Act 1833 - Authorised joint stock banks to open branches within a 65 mile radius
of London provided they did not issue notes
Country Bankers Act 1826 - Permitted the creation of joint stock banks outside a 65 mile radius
of london with the right to issue notes
Treasury Committee - 1918 - set to examine bank mergers as fears were expressed about the size
and influence of large banks
The Bank of Scotland - Established in 1695 to meet the needs of commerce and began issuing
notes and making loans
The Royal Bank of Scotland - 1727, thus Scotland gained two joint stock banks to England's one
Overdrafts - Introduced by the Royal Bank of Scotland in 1728
Branch banking - Scotland developed a network of branches which added to the stability of the
banking system
