Financial Markets and Monetary Policy (AQA A-Level Economics): Flashcards
📚Flashcards
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Practise the cards
10 cards from this deck
Commercial bank definition
Commercial bank definition
Financial institution earning profits by providing banking services
Investment banks vs commercial banks - key difference
Investment banks vs commercial banks - key difference
Investment banks don't generally accept deposits from the public
Systemic risk definition
Systemic risk definition
Risk of breakdown of entire banking system, not just one bank
Ring fencing in banking
Ring fencing in banking
Separating retail and investment banking activities
What banks create when making a loan
What banks create when making a loan
An advance (asset) and a deposit (liability)
% of broad money as bank deposits (not cash)
% of broad money as bank deposits (not cash)
97.4%
Cash ratio definition
Cash ratio definition
% of total deposits held as cash to meet withdrawals
Liquidity-profitability trade-off
Liquidity-profitability trade-off
Balance between liquid assets (safe) and profitable assets (risky)
Most liquid bank asset
Most liquid bank asset
Cash
Most profitable but least liquid bank asset
Most profitable but least liquid bank asset
Advances (loans to customers)