Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What is one of the primary tasks of the Financial Service Authority in the UK?

1. To promote economic growth

2. To increase interest rates

3. To reduce financial crime

4. To regulate the stock market

The correct answer is: To reduce financial crime

The primary task of the Financial Services Authority (FSA) in the UK, which has now been replaced by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), includes a focus on reducing financial crime. This task is crucial as it helps maintain the integrity of the financial system, protects consumers, and ensures that markets operate fairly and efficiently. By creating regulations and conducting enforcement actions, the authority works to prevent money laundering and other financial crimes, thereby fostering a secure and trustworthy environment for financial transactions. The emphasis on reducing financial crime is rooted in the recognition that such activities can undermine public confidence in financial institutions and markets, leading to broader economic instability. This function often involves collaboration with various law enforcement agencies and financial institutions to ensure compliance with relevant laws and regulations. In contrast, promoting economic growth, increasing interest rates, and regulating the stock market are important aspects of economic policy and financial oversight but are not the primary responsibilities of the authority. Economic growth is influenced by a variety of factors, including government policies and global economic conditions, while interest rates are typically set by the central bank. Regulating the stock market is indeed part of the broader regulatory responsibilities, but the targeted goal of reducing financial crime is a distinct and vital component