Bangko Sentral: Functions and Operations
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Questions and Answers

Which of the following is a key function of financial system supervision and regulation?

  • Facilitating the development and adoption of electronic payment systems
  • Producing reports, studies, and economic indicators
  • Supervising and regulating banks and other financial institutions (correct)
  • Issuing and managing the country's currency
  • What is the primary objective of payment and settlement systems?

  • To protect the interests of financial consumers
  • To develop contingency plans and frameworks for crisis management
  • To ensure the efficiency, security, and accessibility of payment systems (correct)
  • To produce reports, studies, and economic indicators
  • What is the main goal of financial consumer protection?

  • To develop and adopt electronic payment systems
  • To ensure transparency, fairness, and responsible practices by financial institutions (correct)
  • To engage in international collaborations and partnerships
  • To maintain the integrity and security of the currency
  • What is a key responsibility of financial inclusion?

    <p>Monitoring and assessing financial system risks</p> Signup and view all the answers

    What is the primary function of research and statistics in the central bank?

    <p>To produce reports, studies, and economic indicators</p> Signup and view all the answers

    What is the main objective of international engagements in the central bank?

    <p>To engage in international collaborations and partnerships to enhance knowledge and expertise</p> Signup and view all the answers

    Which of the following is NOT a key function of the central bank?

    <p>Providing loans to individuals and businesses</p> Signup and view all the answers

    What is a key aspect of financial system supervision and regulation?

    <p>Ensuring the safety, soundness, and compliance of banks and other financial institutions</p> Signup and view all the answers

    What is the primary objective of the International Monetary Fund (IMF)?

    <p>To ensure the stability of the international monetary system</p> Signup and view all the answers

    How many member states are there in the Association of South East Asian Nations (ASEAN)?

    <p>10</p> Signup and view all the answers

    What is the main function of the Macroeconomics Research Office (AMRO) in ASEAN+3?

    <p>To coordinate regional financial policies</p> Signup and view all the answers

    What is the primary focus of the Asia-Pacific Economic Cooperation (APEC)?

    <p>To reduce barriers to trade and investment in the Asia-Pacific Region</p> Signup and view all the answers

    What is the purpose of the Chiang Mai Initiative Multilateralisation (CMIM)?

    <p>To promote regional financial stability</p> Signup and view all the answers

    What is the main activity of the Bank for International Settlements (BIS)?

    <p>To host policy dialogues and meetings on annual bases</p> Signup and view all the answers

    What is the purpose of the Executives Meeting of the East Asia-Pacific Central Banks (EMEAP)?

    <p>To provide a forum for central banks to discuss regional financial issues</p> Signup and view all the answers

    What is the main objective of the Association of South East Asian Nations (ASEAN)+3?

    <p>To provide guidance and directions for economic relations</p> Signup and view all the answers

    What is the primary goal of the World Bank?

    <p>To reduce the share of the global population that lives in extreme poverty</p> Signup and view all the answers

    When was the Intergovernmental Group of Twenty Four (G-24) formally created?

    <p>1972</p> Signup and view all the answers

    What is the main function of the South East Asian Central Banks (SEACEN) Research and Training Centre?

    <p>To serve as the regional learning hub for central banks in the Asia-Pacific region</p> Signup and view all the answers

    How many member countries are part of the South East Asia, New Zealand, Australia (SEANZA) Initiative?

    <p>20</p> Signup and view all the answers

    What is the primary function of the International Relations Surveillance Department?

    <p>To conduct surveillance and capture emerging vulnerabilities</p> Signup and view all the answers

    When was the Official Monetary and Financial Institutions Forum established?

    <p>2010</p> Signup and view all the answers

    What is the main objective of international economic cooperation?

    <p>To address potential problems and enhance global economic governance</p> Signup and view all the answers

    What is the World Trade Organization responsible for?

    <p>Dealing with the rules of trade between nations</p> Signup and view all the answers

    What is the primary tool of a central bank to increase money supply?

    <p>Lowering the reserve requirements</p> Signup and view all the answers

    What happens when a central bank increases the discount rate?

    <p>It decreases the money supply</p> Signup and view all the answers

    What is the main objective of monetary policy?

    <p>To manage inflation and promote economic stability</p> Signup and view all the answers

    What is the effect of selling securities in the open market on the money supply?

    <p>It decreases the money supply</p> Signup and view all the answers

    What is the role of the central bank in the financial system?

    <p>To manage the money supply, regulate the financial system, and issue currency</p> Signup and view all the answers

    What is the effect of lowering the reserve requirements on the money supply?

    <p>It increases the money supply</p> Signup and view all the answers

    What is the function of the central bank in terms of currency management?

    <p>To issue and manage currency</p> Signup and view all the answers

    What is an additional function of the central bank apart from monetary policy?

    <p>All of the above</p> Signup and view all the answers

    Study Notes

    Monetary Policy & Central Banking

    • Central banks have primary tools to manage money supply:
      • Reserve requirements
      • Discount rate
      • Interest on reserves
      • Open market operations

    Reserve Requirements

    • Refers to the amount of funds banks must keep in vaults or reserves that are not allowed to be lent
    • Lowering reserve requirements increases money supply and lowers interest rates
    • Increasing reserve requirements decreases money supply and increases interest rates

    Discount Rate

    • The interest rate charged by central banks to commercial banks and other financial institutions for short-term loans
    • Increasing the discount rate increases borrowing costs, decreasing money supply
    • Decreasing the discount rate reduces borrowing costs, increasing money supply

    Interest on Reserves

    • Refers to the additional amount of funds banks keep in excess of reserve requirements
    • Interest rates on excess reserves can influence banks' lending decisions and money supply

    Open Market Operations

    • Central banks buy or sell securities to increase or decrease money supply
    • Buying securities increases money supply, while selling securities decreases it

    Functions of Central Banks

    • Monetary Policy
    • Financial System Supervision and Regulation
    • Currency Issuance and Management
    • Payment and Settlement Systems
    • Financial Consumer Protection
    • Financial Inclusion
    • Research and Statistics
    • International Engagements

    International Engagements

    • International Economic Cooperation
    • Reasons for cooperation:
      • Strengthen surveillance mechanisms
      • Capture emerging vulnerabilities
      • Address potential problems

    International Organizations

    • Intergovernmental Group of Twenty Four (G-24)
      • Established in 1977 to achieve policy coherence and represent developing countries in global economic governance
    • Official Monetary and Financial Institutions Forum (OMFIF)
      • Established in 2010 as an independent think tank for central banking and economic policy
    • South East Asian Central Banks (SEACEN) Research and Training Centre
      • Established in 1982 to serve as a regional learning hub for central banks in the Asia-Pacific region
    • World Bank
      • Established in 1944 to reduce extreme poverty
      • Philippines has been a member since 1945
    • World Trade Organization (WTO)
      • Established to promote free trade and cooperation among member countries
    • South East Asia, New Zealand, Australia (SEANZA) Initiative
      • Composed of 20 member countries to promote cooperation among central banks through training courses
    • International Monetary Fund (IMF)
      • Established in 1945 to ensure stability of the international monetary system
      • Three key functions:
        • Surveillance
        • Lending
        • Capacity Development
    • Association of South East Asian Nations (ASEAN)
      • Composed of 10 member states to promote economic growth, collaboration, and regional peace
      • Three objectives:
        • Financial Integration
        • Financial Inclusion
        • Financial Stability
    • Association of South East Asian Nations +3 (ASEAN+3)
      • Established in 1997 to provide guidance and directions for economic relations
    • Association of South East Asian Nations +3 (ASEAN+3) Macroeconomics Research Office (AMRO)
      • Three functions:
        • Surveillance
        • CMIM Support
        • Technical Assistance
    • Executives Meeting of the East Asia - Pacific Central Banks (EMEAP)
      • Composed of 11 member central banks to promote cooperation and financial stability
      • Three levels of activities:
        • Governors Meetings
        • Deputies Meetings
        • Financial Stability Committee
    • Bank for International Settlements (BIS)
      • Two main activities:
        • Policy Dialogues
        • Meetings on Annual Bases
    • Asia-Pacific Economic Cooperation (APEC)
      • Established in 1989 to promote free trade and investment in the Asia-Pacific region

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    Description

    This quiz covers the characteristics, functions, and operations of central banks, specifically the Bangko Sentral, including monetary policy, credit operations, and security plant complex management.

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