121_9CentralBanking.pdf

Info icon This preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
CENTRAL BANKING
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
BRIEF HISTORY Early 1933 conceptualization of a central bank in the Philippines 1939 Philippine legislature passed a law establishing a central bank (US President Franklin Roosevelt disapproved the law) 1944 Second law was passed (aborted, American liberalization forces arrived) 1946 A charter was drawn for a central bank
Image of page 2
1948 Elpidio Quirino affixed his signature on Republic act No. 265 or the Central Bank Act of 1948 June 14, 1993 Fidel Ramos signed into law Republic Act No 7653 or the New Central Bank Act An independent monetary authority to be known as the Bangko Sentral Ng Pilipinas was established, with the maintenance of price stability explicitly stated as its primary objective BRIEF HISTORY
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
BANGKO SENTRAL NG PILIPINAS Uniquely qualified body to promote price stability supervises the operations of banks and exercises such regulatory powers sole government institution mandated by law to issue notes and coins for circulation in the Philippines
Image of page 4
THE CONDUCT OF A MONETARY POLICY Primary objective of the BSP: Promote a low and stable inflation conducive to a balance and sustainable economic growth How? Through the conduct of a Monetary Policy Tools for PRICE STABILITY INFLATION TARGETING Approach
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
THE CONDUCT OF A MONETARY POLICY PRICE STABILITY BSP controls inflation by influencing, through its monetary policy , the supply of money circulating in the economy
Image of page 6
THE CONDUCT OF A MONETARY POLICY PRICE STABILITY Why control inflation? 1. Supports growth allows households and firms to plan ahead and arrive at better informed decisions about their consumption , investment, savings and production needs 2. Promotes income equality by protecting the purchasing power of the poor who often do not have assets (real or financial) that allow them to hedge against inflation
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
THE CONDUCT OF A MONETARY POLICY PRICE STABILITY Why through influencing the money supply? Too much money supply circulating in the system Induces c0nsumers to increase demand for goods and services If this increased demand is not matched by higher production
Image of page 8
THE CONDUCT OF A MONETARY POLICY PRICE STABILITY
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern