38 Questions
What percentage of member states voted to leave the EU?
51.9%
Why did the UK want to leave the EU according to the content?
All of the above
What is the Banker of the Government designated as?
Bangko Sentral
What international organization is the Bangko Sentral represented in?
International Monetary Fund
What is one of the reasons the UK wanted to leave the EU?
EU allows too many immigrants
What chapter is related to the functions of the Bangko Sentral?
Chapter V – Functions as Banker and Financial Advisor
What was drafted by Secretary of Finance Manuel Roxas in 1939?
A bill establishing a central bank
What is the primary motive of the Bangko Sentral ng Pilipinas (BSP)?
Public service
What is a key characteristic of the Bangko Sentral ng Pilipinas (BSP) as a central bank?
Operations controlled by government laws
What is one of the key functions of the Bangko Sentral ng Pilipinas (BSP) as a bank of issue?
Issuing notes and coins
What is the main reason for the Bangko Sentral ng Pilipinas (BSP) to issue notes and coins?
For uniformity and effect government supervision over the money supply
What is the role of the Bangko Sentral ng Pilipinas (BSP) as the government's banker?
Managing the government's account transactions
What is the Financial Supervision Sector (FSS) responsible for?
Regulation of banks and other BSP-supervised financial institutions
What is the Monetary Economics Sector (MES) responsible for?
Monetary policy formulation
What is the primary function of centralized reserves in mitigating bank runs?
To provide a source of liquidity for banks facing sudden withdrawal demands
What is the role of centralized reserves during currency crises?
To defend against currency crises by providing the necessary resources to intervene in the foreign exchange market
What is the role of centralized reserves during liquidity shortages?
To act as a backstop to ensure the smooth functioning of interbank lending and payment systems
What is the role of the Bangko Sentral ng Pilipinas (BSP) in reserve management?
To manage foreign exchange reserves
What is the purpose of maturity reserves?
To ensure that the bank can meet payout obligations when the fixed deposit term ends
What is the purpose of capital reserves?
To cover potential losses
What is the purpose of demand deposits?
Immediate reserves that ensure all withdrawals can be met instantly
What is the purpose of compensating balances?
For minimum balance maintenance
When was the Bank of Japan established?
June 1882
What is one of the goals of monetary policy?
To promote price stability
What happened in 1942?
The Bank of Japan Act of 1942 was promulgated
What is a feature of monetary policy?
Regulation of Money Supply
What happened in the 1980s in Japan?
The bubble economy era occurred
What is another goal of monetary policy?
To ensure financial stability
What happened in 1897?
Japan adopted the gold standard
When did business operation of the Bank of Japan begin?
October 10, 1882
When was the Bank of Japan Act of 1997 promulgated?
June 1997
What is the primary function of the Bank of Japan?
To maintain price stability
What is the role of the Monetary Board?
To exercise the powers and functions of the BSP
What is one of the key functions of the Bank of Japan?
To maintain financial system stability
What is the role of the Bank of Japan in payment settlement systems?
To maintain the stability of payment systems
What is the role of the Bank of Japan in market operations?
To control the money supply and interest rate
What is one of the key functions of the Bank of Japan?
To provide financial services to the government
Who is part of the Monetary Board?
The Governor of the BSP
Study Notes
Central Banks
- 1939: A bill establishing a central bank was drafted by Secretary of Finance Manuel Roxas and approved by the Philippine Legislature.
Characteristics of BSP as a Central Bank
- Profit motive is only secondary
- Operations are controlled by government laws
- Does not deal directly with the public
Functions of the BSP
- It is a bank of issue, with the sole power to issue notes and coins for uniformity, government supervision over the money supply, and as a source of income
- It is the government's banker, responsible for managing all account transactions of the government
- It is an agent of the government, with fixed deposits, and responsible for liquidity reserves and capital reserves
The New Organizational Structure of the BSP
- Financial Supervision Sector (FSS) – responsible for the regulation of banks and other BSP-supervised financial institutions
- Monetary Economics Sector (MES) – responsible for the regulation of banks and other BSP-supervised financial institutions
Role of Centralized Reserves in Mitigating Risks
- Bank Runs - Centralized reserves provide a source of liquidity for banks facing sudden withdrawal demands
- Currency Crises - Centralized reserves help defend against currency crises by providing the central bank with the necessary resources to intervene in the foreign exchange market
- Liquidity Shortages - Centralized reserves act as a backstop to ensure the smooth functioning of interbank lending and payment systems
Role of BSP in Securing and Facilitating Reserves
- Reserve Management - managing the Philippines' foreign exchange reserves, ensuring their safety and liquidity
- Managing liquidity reserves, capital reserves, and fixed deposits
Bank of Japan
- Established in 1882, with the BOJ Act of 1882 promulgated
- 1897: Japan adopts the gold standard to stabilize the yen
- 1910s to 1942: World War Era
- 1942: Bank of Japan Act of 1942 is promulgated, and the Bank was reorganized
- Post-War, Economic Construction & Growth (1949 to 1950s)
- Bubble Economy Era (1980s to 1990s)
- Post-Bubble Era (1997 to 1998)
Functions of the Bank of Japan
-
- Monetary Policy
- To maintain price stability
-
- Currency Issuance
- Issues Japanese yen
-
- Financial System Stability
- Monitors and maintains stability of financial system
-
- Payment Settlement Systems
-
- Market Operations
- Controls money supply & interest rate
-
- Financial Services for the Government
-
- International Finance
-
- Ensures Smooth Settlement of Funds
Learn about the history and characteristics of central banks, specifically the Bangko Sentral ng Pilipinas (BSP), and their key functions.
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