WEEK 8

• The first prototypes for modern central banks were the Bank of England and the Swedish Riksbank, which date back to the 17th century.
• The Bank of England was the first to acknowledge the role of lender of last resort
• Monetary Policy: Central banks formulate and implement monetary policy to regulate the money supply, interest rates, and credit conditions in the economy
• Currency Issuance: Central banks have the authority to issue and regulate the country's currency
• Banking Supervision and Regulation: Central banks establish and enforce regulations to ensure the safety and soundness of banks, monitor their activities, conduct inspections, and

  impose penalties
• Financial Stability: Central banks monitor and address risks to the stability of the financial
• The role of the BSP in the economy as a whole

  ● Price stability

  ● Financial Stability

  ● Efficient payments and settlement system
• January 3, 1949 - CBP established through Republic Act No.265
• Objectives of BSP Maintain : ● Price Stability

  ● Monetary stability and convertibility of peso
• Monetary Board - highest policy-making body of the BSP.
• Governor - the chief executive officer of the BSP and is required to direct and supervise the operations and internal administration of the BSP
• Managing the central bank's operations: The governor is responsible for overseeing the day to-day operations of the central bank.
• Representing the central bank: The governor often represents the central bank in meetings with other government officials, international organizations, and the media.
• Promoting financial stability: The governor promotes financial stability by regulating banks and other financial institutions, monitoring systemic risks, and taking action to address financial crises.
• Conducting research and analysis: The governor oversees the central bank's research and analysis of economic and financial trends
• Issuing currency: The governor manages and issues a country's currency, including controlling its circulation
• International Monetary Policy: policies and actions implemented by central banks with the International Financial System.
• FV = 1000 (1+i)³
• PV = 1000 / (1+i)³
• 1993 Pres. Fidel Ramos, The Philippine Congress passed Republic Act No. 7653 known as the 'New Central Bank Act'
• Deputy Governor heads each of the BSP's operating sectors
• Contractionary - higher interest rates, less lending/borrowing, more savings, and less spending
• Expansionary - lower interest rates, more lending/borrowing, less savings and more spending