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LIBF-Unit 4 UPDATED Exam Questions (2025)
Complete Exam Questions and Answers | already
graded A+
competition and markets authority - (ANSWER)The body responsible for
strengthening business competition and preventing and reducing anti-competitive
activities.
counterparties - (ANSWER)People and organisations (eg companies) who lend
money to and borrow from financial intermediaries (ie financial institutions such
as banks)
divestment - (ANSWER)The process of selling off parts of a company to make it
smaller, eg the Lloyds sell-off that created new TSB branches.
financial intermediary - (ANSWER)A financial institution that facilitates the
process of lending and borrowing, by taking deposits from those with a surplus
and lending those funds out to those who need to borrow.
financial intermediation - (ANSWER)The process of taking in deposits from those
with a surplus and lending those funds out to those who need to borrow (see
financial intermediary).
financial policy committee - (ANSWER)A part of the Bank of England that
monitors and responds to risk posed to the entire financial services market. Its
focus on the whole market makes it a macro-prudential authority.
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friendly society - (ANSWER)A mutual organisation that offers its members a wide
range of financial products, which can include savings, investments, insurance,
pensions and annuities.
hm treasury - (ANSWER)Her Majesty's (HM) Treasury, the government
department responsible for development and implementation of financial and
economic policy.
investment banks - (ANSWER)Banks that raise funds on the financial markets,
rather than accepting deposits as a retail bank does. They use these funds to
provide special services to large corporations and to governments. Also known as
wholesale banks.
lloyd's insurance market - (ANSWER)An insurance marketplace where members
(corporations and individuals) employ underwriters to come together and accept
insurance risk, dividing it out between the members.
long-term capital markets - (ANSWER)Financial markets where long-term debt (ie
bonds) and shares in the bank (equity) are bought and sold. This provides a source
of funding for banks.
monetary policy - (ANSWER)The manipulation of interest rates to maintain low
inflation.
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monetary policy committee - (ANSWER)The Bank of England committee
responsible for keeping inflation under control by the manipulation of interest
rates.
oligopoly - (ANSWER)A market dominated by a few large firms, eg the financial
services sector.
peer-to-peer lenders - (ANSWER)Online marketplaces that enable people to lend
to and borrow from each other without using a traditional financial institution
such as a bank or building society.
retail banks - (ANSWER)Banks that deal directly with consumers, eg providing
current accounts and mortgages.
retail ring-fencing - (ANSWER)Separating the deposit-taking part of a bank or
building society from the rest of its business so that, in the event of financial
difficulties, the ring- fenced deposits of retail customers cannot be used to pay
the debts of the more risky investment section of the bank.
short-term money markets - (ANSWER)Financial markets where banks borrow
over short periods (ie months, weeks or even days), especially from the interbank
market, where banks with short-term surpluses lend to banks with short-term
deficits.
LIBF-Unit 4 UPDATED Exam Questions (2025)
Complete Exam Questions and Answers | already
graded A+
competition and markets authority - (ANSWER)The body responsible for
strengthening business competition and preventing and reducing anti-competitive
activities.
counterparties - (ANSWER)People and organisations (eg companies) who lend
money to and borrow from financial intermediaries (ie financial institutions such
as banks)
divestment - (ANSWER)The process of selling off parts of a company to make it
smaller, eg the Lloyds sell-off that created new TSB branches.
financial intermediary - (ANSWER)A financial institution that facilitates the
process of lending and borrowing, by taking deposits from those with a surplus
and lending those funds out to those who need to borrow.
financial intermediation - (ANSWER)The process of taking in deposits from those
with a surplus and lending those funds out to those who need to borrow (see
financial intermediary).
financial policy committee - (ANSWER)A part of the Bank of England that
monitors and responds to risk posed to the entire financial services market. Its
focus on the whole market makes it a macro-prudential authority.
, 2
friendly society - (ANSWER)A mutual organisation that offers its members a wide
range of financial products, which can include savings, investments, insurance,
pensions and annuities.
hm treasury - (ANSWER)Her Majesty's (HM) Treasury, the government
department responsible for development and implementation of financial and
economic policy.
investment banks - (ANSWER)Banks that raise funds on the financial markets,
rather than accepting deposits as a retail bank does. They use these funds to
provide special services to large corporations and to governments. Also known as
wholesale banks.
lloyd's insurance market - (ANSWER)An insurance marketplace where members
(corporations and individuals) employ underwriters to come together and accept
insurance risk, dividing it out between the members.
long-term capital markets - (ANSWER)Financial markets where long-term debt (ie
bonds) and shares in the bank (equity) are bought and sold. This provides a source
of funding for banks.
monetary policy - (ANSWER)The manipulation of interest rates to maintain low
inflation.
, 3
monetary policy committee - (ANSWER)The Bank of England committee
responsible for keeping inflation under control by the manipulation of interest
rates.
oligopoly - (ANSWER)A market dominated by a few large firms, eg the financial
services sector.
peer-to-peer lenders - (ANSWER)Online marketplaces that enable people to lend
to and borrow from each other without using a traditional financial institution
such as a bank or building society.
retail banks - (ANSWER)Banks that deal directly with consumers, eg providing
current accounts and mortgages.
retail ring-fencing - (ANSWER)Separating the deposit-taking part of a bank or
building society from the rest of its business so that, in the event of financial
difficulties, the ring- fenced deposits of retail customers cannot be used to pay
the debts of the more risky investment section of the bank.
short-term money markets - (ANSWER)Financial markets where banks borrow
over short periods (ie months, weeks or even days), especially from the interbank
market, where banks with short-term surpluses lend to banks with short-term
deficits.
