Economics class: UK government to sell next £1bn stake in NatWest
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This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.
Click to read the article below and then answer the questions:
The article refers to the ‘US subprime mortgage market.’ Explain what is meant by a subprime mortgage
The 2008 financial crash has its origins in the USA; however, it proved highly contagious. Explain the meaning of the term systemic risk
Limited liability in a bank means that owners have an incentive to take risks. Explain what is meant by moral hazard
Banks suffered a devastating decline in confidence and with that came the inevitable bank run. Explain what is meant by a bank run
‘Banks had become too big to fail, too big to sail, and too big to jail.’ Banks were bailed-out at great expense. Outline the measures subsequently introduced by the Bank of England to ensure that banks are strong enough to withstand another financial crisis, so-called stress testing
Gavin Clarke, Emmanuel College