In the UK financial regulatory framework, which of the following is an example of a macroprudential policy measure implemented by the Financial Policy Committee (FPC) to mitigate systemic risk?
The Prudential Regulation Authority (PRA) instructing a specific high-street bank to raise its capital adequacy ratio due to its high exposure to commercial property defaults.
The Financial Policy Committee (FPC) introducing a system-wide limit on the proportion of mortgages that commercial banks can issue at high loan-to-income (LTI) ratios.
The Financial Conduct Authority (FCA) imposing a strict ban on the sale of complex, high-risk derivative products to retail consumers.
The Bank of England providing emergency short-term funding as a lender of last resort to an individual commercial bank experiencing a sudden liquidity run.
176 exam-style questions on AQA A Level Economics 2.4 Financial markets and monetary policy (A-level only), covering 2.4.1 The structure of financial markets and financial assets, 2.4.2 Commercial banks and investment banks, 2.4.3 Central banks and monetary policy, and 2.4.4 The regulation of the financial system. Each one has a worked solution and a mark scheme showing where the marks go.