BANKING REVIEWER

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BANKING REVIEWER

100問 • 1年前hehe

問題一覧

- facilitates the country’s payment system. - peso bills or coins, printed or minted - facilitates the transfer of high-valued goods and services among economic agents - It provides formal financial services

Central Banks

has something to do with the opening and closure of banks

Central Bank Policy

is the country's keeper of official international reserves, which can be used to pay for imports of goods and services and foreign debts.

Central Bank

Two Core Functions of Central Bank

▸ Monetary Policy. ▸ Bank Supervision Functions

What changes the functions of these Core Functions?

• Economic Crisis. • Attitudes of Policy Makers • Business Sector. • Households. • Non-government Organizations

Central Bank of the Philippines (CBP), which was established by virtue of Republic Act (RA) No. 265 (1948), was also mandated to promote the increase on level of production, employment, and real income.

Central Bank of the Philippines (CBP)

In June 1993, or roughly 21 years after substantially amending the original charter of the CBP, Republic Act No. 7653, otherwise known as the New Central Bank Act, was passed creating a new central bank called

Bangko Sentral ng Pilipinas (BSP)

provides a clear and highly focused "primary" objective of the BSP, which is "to maintain price stability conducive to a balanced and sustainable growth of the economy."

RA 7653

- it is anything that commonly used and generally accepted as medium of exchange and standard of value and generally accepted for exchange of good or services or payment off debts - it includes all forms of money that was used in the past and the present.

Money

(4) Key Functions of Money

1. Medium of Exchange 2. Unit of Account 3. Store of Value 4. Standard of Payment

Characteristics of Good Money

- should be acceptable in business and public - people must trust money in order to accept it for payment. - should have standardized quality - should be durable - should have valuable relative to its weight -Good money is divisible

Four types of money

- commodity money - fiat money - fiduciary money - commercial bank

- made of or bulids on limited natural resources to serve a a medium of exchange. they are very similar to barter system. medium of exchange.

Commodity money

- The value of it comes from the goverment order which means goverment must declare it as a legal tender in which it requires all people, business firms to accept it as a form of payment

Fiat money

- Its value depend on the conficence on it to be generally accepted as medium of exchange. It is not declared as legal tender by the goverment compared to fiat Some example of fiduciary money includes cheques, banknotes, or drafts

Fiduciary Money

it is serve as claim against financial institutions in exchange or to purchase either good or services.

Commercial Bank Money

serve as intermediaries or bridges between the fund sources and the fund users.

Financial institutions

(2) Types of Financial Institutions in the Philippines

- Banking Institutions - Non-banking Institutions

To accept savings deposits, check deposits, and time deposits. They also offer short-term loans, accept drafts and letters of credit, and give discounts on promissory notes, bills of exchange, and any document on credit. Example : Philippine National Bank (PNB), Bank of the Philippine islands (BPI), Metrobank

Commercial Banks

these banks cater primarily to farmers

Rural Banks

(2) Banking Institutions

Commercial Banks Rural Banks

these are financial institutions but not banks, but can collect "contributions" that may be invested in business or stocks or loaned with interest to individuals and organizations, including government. Example : Government Service Insurance System (GSIS), Social security System (SSS), and Ikaw, Bangko, Industriya't Gobyerno (PAG-IBIG)

Non-baking Institutions

(3) International Funding Institutions

• World Bank (WB) • International Monetary Fund (IMF) • Asian Development Bank (ADB)

The Banking in the Philippines began in the _______ which the establishment of OBRAS PIAS (pious works).

16th century

The Banking in the Philippines began in the 16th century which the establishment of _______

OBRAS PIAS (pious works)

first bank that emerged in early 19th century, which was more of a loan association than regular bank

Rodriguez Bank

which also serve as the first state bank in the Philippines.

BANCO ESPANOL-FILIPINO DE ISABEL II

In1873, ____________ opened branches in the country

British-Orient bank

In 1875, it was established and serve as the first mutual saving in the country

Hongkong shanghai Banking corporation

- is a unique combination of savings banks and pawnshops which opened in 1882 and was provided intial capital by the Obras Pias

Monte de Piedad Y Caja de Ahorros

unique combination of savings banks and pawnshops which opened in 1882 and was provided intial capital by the Obras Pias. The bank was then renamed ______________

Monte de Piedad and Savings Bank

The Banco Espanol- Filipino de Isabel II changed its name to Bank of the Philippine Islands and now the oldest existing bank in the country (date)

January 1, 1912

During the ___________, seven domestic private banks came into existence

American Occupation

Postal Savings bank was put up in

1906

The first Agricultural bank was established in _____ but its asset and liabilities were transferred to the Philippine National Bank which was organized in ______

1908, 1916

Three years after the American regime ended, the ______________ was created.

Central Bank of the Philippines

Function of Central Bank of the Philippines

• It was given sole authority to issue the country's paper money. • Regulate and supervise the country's banking system.

was created under Section 2 of RA 7653, better known as " The New Central Bank Act"

Banko Sentral Ng Pilipinas

It started its formal operations on

July 3 1993

A company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange

Financial Institution

A financial institution licensed to receive deposits and make loans. also provide financial services such as wealth management, currency exchange, and safe deposit boxes.

Banks

Are the businesses and organizations involved in the collection and distribution of money. They develop the methods and procedures that allow them to collect money from depositors and lend it out to borrowers

Financial Institutions

Such as banks and credit unions, collect money from depositors and lend the money out to debtors. Lending has risks, because of information irregularity between the lender and the borrower.

Depository Institutions

(aka transaction deposits) are deposits placed in checking accounts that allow the depositors to withdraw money at will, write checks, and transfer funds electronically to and from the account. Thus, checkable deposits provide safekeeping, accounting, and payment services, but pay little or no interest.

Checkable deposits

are deposits in savings and time deposit accounts, where withdrawals are limited. However, since non-transaction deposits do not provide payment services, the main benefit to depositors is the interest that they pay.

Non-transaction deposits

can pay a lower rate of interest on deposits because the funds that they hold are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to a certain limit.

Banks

Most banks borrow in the interbank market, known as the federal funds market, so called because the money, both lent and borrowed, is held in the banks' accounts at The Federal Reserve, called federal funds.

Borrowings

(aka repo) is an agreement to exchange securities, usually in the form of Treasury bills, for funds, usually for a term of 1 day, after which the borrower buys back, or repurchases the securities with interest.

repurchase agreement

Collect money as premiums, contributions, or by selling securities for specific purposes, and then invest the money for higher returns.

Non-depository Institutions

pool the premiums of many people and businesses to protect each from financial disaster resulting from rare events.

Insurance companies

collect contributions from workers and businesses to invest so that workers can retire with an income provided from the invested funds.

Pension funds

such as stock brokers or future merchant commissions, provide the institutional foundation that allows investors to invest their money in the various financial markets by providing current market information and allowing the investors to select markets or limit orders to buy or sell securities through their computer system.

Securities firms

also provide clearing and settlement systems so that investors can easily clear and settle trades.

Securities firms

get money by selling securities, mostly commercial paper, in the money market to other businesses, including banks, and then lend the money out to individuals or businesses at a higher interest rate than what they pay on their securities.

Finance companies

There are 3 basic types of finance companies.

Small loan companies Sales finance companies Commercial finance companies

(aka direct loan Companies) lend money to individuals

Small loan companies

(aka acceptance companies) buy retail and wholesale commercial paper of consumer and capital goods dealers.

Sales finance companies

(aka commercial credit companies) loan money to manufacturers and wholesalers that is secured by the borrowers' account receivables, inventory, or equipment

Commercial finance companies

include Insurance companies, pension funds, securities firms, government-sponsored enterprises, and finance companies. There are also smaller non-depository institutions, such as pawnshops and venture capital firms, but they constitute a much smaller portion of sources of funds for the economy.

Non-depository institutions

Is to channel funds from savers who have an excess of funds to spenders who have a shortage of funds.

basic function of financial markets

can do this either Through direct finance, in which borrowers borrow funds directly from lenders by selling them securities

Financial markets

improves the economic welfare of everyone in the society. Because they allow funds to move from people who have no productive investment opportunities

channeling of funds

directly Benefits consumers by allowing them to make purchases when they need them most.

channeling of funds

Are firms that pool the savings or investments of many people and lend or invest the money to other companies or people to earn a return. include banks, investment companies, insurance companies, and pension funds

Financial Intermediaries

allow small retail investors to pool their money together to reduce the diversifiable risks of investments and to profit from the expertise of professional money managers.

Investment companies

pool the premiums of the insured to pay for the losses of a few of the insured, thereby preventing a financial catastrophe for the sufferers

Insurance companies

pool the contributions of workers to invest for greater returns, so that a pension income can be provided to the workers after they retire.

Pension funds

onstitute the Largest group in terms of resources, among The private non-bank financial intermediaries. Among the biggest Investment houses in the country today is the Private Development Corporation of The Philippines.

Investment houses

which are primarily engaged in investing, reinvesting or trading in securities are of two types: open-end and close-end companies.

Investment companies

have relatively fixed amounts of outstanding capital, since there are no provisions for the issuance or redemption of shares on a day-to-day basis.

close-end companies

Are either partnerships or corporations which are organized to extend credit lines to consumers and to industrial, commercial or agricultural enterprises by discounting and factoring commercial papers and account receivables or by buying or selling contract

Finance companies

are companies which buy and sell securities to resell or offer them for sale to the public

Security dealers

are those engaged in the business of effecting transactions in securities for the account of others. They earn their income from commissions received.

Securities brokers

companies are under the direct supervision and regulation of the Office of the Insurance Commissioner and are authorized to conduct life, fire, marine, health and accident insurance.

Private insurance

are Business establishments engaged in lending money on personal property delivered as security, pledge or collateral.

Pawn Shops or pawnbrokers

which primarily provide short- term loans to members and whose main sources of income are savings and time deposits.

Non-stock savings and loan associations

are mutually owned stock companies that specialize in extending long-term mortgage loans to members.

Mutual and building loan associations

are cooperatives composed of small producers and Consumers who voluntarily join together to form their business enterprises that they themselves own, control and patronize.

Credit unions

are institutional and personal administrators of funds created or constituted for the benefit of others.

Trust and pension fund managers

for businesses can be categorized as either internal or external financing.

Sources of funding

the financing obtained by selling stocks and bonds directly to the public in the financial markets.

Direct finance

provides the lowest cost of funds from external sources, but it requires a company that is well established with an appreciable income and substantial assets; otherwise, investors would be reluctant to lend or invest in the company due to the lack of information and assets.

Direct finance

is the financing obtained from financial intermediaries

Indirect finance

can lend or invest money in smaller businesses because they can do a better job of investigating the company, assessing its risks, and securing assets for collateral against loans.

Financial intermediaries

costs more than direct financing,

Indirect financing

But _______ can invest or lend money to businesses that would otherwise not be able to get external financing.

financial intermediaries

are legal agreements that require one party to pay money or something else of value or to promise to pay under stipulated conditions to a counterparty in exchange for the payment of interest,

Financial Instruments

are issued by companies to raise money from investors.

Stocks

are financial instruments that allow investors to lend money to the bond issuer for a stipulated amount of interest over a specified period.

Bonds

can also be used by traders to either speculate about future prices, index levels, or interest rates, or some other financial measure, or to hedge financial risk.

Financial instruments

The 2 parties to these kinds of instruments

speculators and hedgers

attempt to predict future prices or some other financial measure, then buying or selling the financial instruments that would yield a profit if their view of the future should be correct.

Speculators

Are financial securities are bought and sold. They include the organized exchanges For stocks and futures, and the over-the-counter (OTC) market for bonds, foreign exchange, and derivatives.

Financial Markets

where some securities are initially issued

primary markets

where holders of securities can sell at will.

secondary markets

provide the liquidity that many investors demand; otherwise, there would be less demand for financial securities.

Secondary markets

is the ease in which an asset can be converted into a means of payment. Without liquidity, few people would be willing to invest in securities, which would lower the efficiency of the markets and the economy.

Liquidity

This function may also be termed the credit of loan function.

Money creation

Created for the depositor with a bank.

Enhanced liquidity

100

Provides the mechanism for the making of payments for anything that is purchased.

Payment System

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問題一覧

Central Banks

has something to do with the opening and closure of banks

Central Bank Policy

is the country's keeper of official international reserves, which can be used to pay for imports of goods and services and foreign debts.

Central Bank

Two Core Functions of Central Bank

▸ Monetary Policy. ▸ Bank Supervision Functions

What changes the functions of these Core Functions?

• Economic Crisis. • Attitudes of Policy Makers • Business Sector. • Households. • Non-government Organizations

Central Bank of the Philippines (CBP)

Bangko Sentral ng Pilipinas (BSP)

provides a clear and highly focused "primary" objective of the BSP, which is "to maintain price stability conducive to a balanced and sustainable growth of the economy."

RA 7653

Money

(4) Key Functions of Money

1. Medium of Exchange 2. Unit of Account 3. Store of Value 4. Standard of Payment

Characteristics of Good Money

Four types of money

- commodity money - fiat money - fiduciary money - commercial bank

- made of or bulids on limited natural resources to serve a a medium of exchange. they are very similar to barter system. medium of exchange.

Commodity money

- The value of it comes from the goverment order which means goverment must declare it as a legal tender in which it requires all people, business firms to accept it as a form of payment

Fiat money

Fiduciary Money

it is serve as claim against financial institutions in exchange or to purchase either good or services.

Commercial Bank Money

serve as intermediaries or bridges between the fund sources and the fund users.

Financial institutions

(2) Types of Financial Institutions in the Philippines

- Banking Institutions - Non-banking Institutions

Commercial Banks

these banks cater primarily to farmers

Rural Banks

(2) Banking Institutions

Commercial Banks Rural Banks

Non-baking Institutions

(3) International Funding Institutions

• World Bank (WB) • International Monetary Fund (IMF) • Asian Development Bank (ADB)

The Banking in the Philippines began in the _______ which the establishment of OBRAS PIAS (pious works).

16th century

The Banking in the Philippines began in the 16th century which the establishment of _______

OBRAS PIAS (pious works)

first bank that emerged in early 19th century, which was more of a loan association than regular bank

Rodriguez Bank

which also serve as the first state bank in the Philippines.

BANCO ESPANOL-FILIPINO DE ISABEL II

In1873, ____________ opened branches in the country

British-Orient bank

In 1875, it was established and serve as the first mutual saving in the country

Hongkong shanghai Banking corporation

- is a unique combination of savings banks and pawnshops which opened in 1882 and was provided intial capital by the Obras Pias

Monte de Piedad Y Caja de Ahorros

unique combination of savings banks and pawnshops which opened in 1882 and was provided intial capital by the Obras Pias. The bank was then renamed ______________

Monte de Piedad and Savings Bank

The Banco Espanol- Filipino de Isabel II changed its name to Bank of the Philippine Islands and now the oldest existing bank in the country (date)

January 1, 1912

During the ___________, seven domestic private banks came into existence

American Occupation

Postal Savings bank was put up in

1906

The first Agricultural bank was established in _____ but its asset and liabilities were transferred to the Philippine National Bank which was organized in ______

1908, 1916

Three years after the American regime ended, the ______________ was created.

Central Bank of the Philippines

Function of Central Bank of the Philippines

• It was given sole authority to issue the country's paper money. • Regulate and supervise the country's banking system.

was created under Section 2 of RA 7653, better known as " The New Central Bank Act"

Banko Sentral Ng Pilipinas

It started its formal operations on

July 3 1993

A company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange

Financial Institution

A financial institution licensed to receive deposits and make loans. also provide financial services such as wealth management, currency exchange, and safe deposit boxes.

Banks

Financial Institutions

Such as banks and credit unions, collect money from depositors and lend the money out to debtors. Lending has risks, because of information irregularity between the lender and the borrower.

Depository Institutions

Checkable deposits

Non-transaction deposits

can pay a lower rate of interest on deposits because the funds that they hold are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to a certain limit.

Banks

Borrowings

repurchase agreement

Collect money as premiums, contributions, or by selling securities for specific purposes, and then invest the money for higher returns.

Non-depository Institutions

pool the premiums of many people and businesses to protect each from financial disaster resulting from rare events.

Insurance companies

collect contributions from workers and businesses to invest so that workers can retire with an income provided from the invested funds.

Pension funds

Securities firms

also provide clearing and settlement systems so that investors can easily clear and settle trades.

Securities firms

Finance companies

There are 3 basic types of finance companies.

Small loan companies Sales finance companies Commercial finance companies

(aka direct loan Companies) lend money to individuals

Small loan companies

(aka acceptance companies) buy retail and wholesale commercial paper of consumer and capital goods dealers.

Sales finance companies

(aka commercial credit companies) loan money to manufacturers and wholesalers that is secured by the borrowers' account receivables, inventory, or equipment

Commercial finance companies

Non-depository institutions

Is to channel funds from savers who have an excess of funds to spenders who have a shortage of funds.

basic function of financial markets

can do this either Through direct finance, in which borrowers borrow funds directly from lenders by selling them securities

Financial markets

improves the economic welfare of everyone in the society. Because they allow funds to move from people who have no productive investment opportunities

channeling of funds

directly Benefits consumers by allowing them to make purchases when they need them most.

channeling of funds

Financial Intermediaries

allow small retail investors to pool their money together to reduce the diversifiable risks of investments and to profit from the expertise of professional money managers.

Investment companies

pool the premiums of the insured to pay for the losses of a few of the insured, thereby preventing a financial catastrophe for the sufferers

Insurance companies

pool the contributions of workers to invest for greater returns, so that a pension income can be provided to the workers after they retire.

Pension funds

Investment houses

which are primarily engaged in investing, reinvesting or trading in securities are of two types: open-end and close-end companies.

Investment companies

have relatively fixed amounts of outstanding capital, since there are no provisions for the issuance or redemption of shares on a day-to-day basis.

close-end companies

Finance companies

are companies which buy and sell securities to resell or offer them for sale to the public

Security dealers

are those engaged in the business of effecting transactions in securities for the account of others. They earn their income from commissions received.

Securities brokers

companies are under the direct supervision and regulation of the Office of the Insurance Commissioner and are authorized to conduct life, fire, marine, health and accident insurance.

Private insurance

are Business establishments engaged in lending money on personal property delivered as security, pledge or collateral.

Pawn Shops or pawnbrokers

which primarily provide short- term loans to members and whose main sources of income are savings and time deposits.

Non-stock savings and loan associations

are mutually owned stock companies that specialize in extending long-term mortgage loans to members.

Mutual and building loan associations

are cooperatives composed of small producers and Consumers who voluntarily join together to form their business enterprises that they themselves own, control and patronize.

Credit unions

are institutional and personal administrators of funds created or constituted for the benefit of others.

Trust and pension fund managers

for businesses can be categorized as either internal or external financing.

Sources of funding

the financing obtained by selling stocks and bonds directly to the public in the financial markets.

Direct finance

is the financing obtained from financial intermediaries

Indirect finance

can lend or invest money in smaller businesses because they can do a better job of investigating the company, assessing its risks, and securing assets for collateral against loans.

Financial intermediaries

costs more than direct financing,

Indirect financing

But _______ can invest or lend money to businesses that would otherwise not be able to get external financing.

financial intermediaries

are legal agreements that require one party to pay money or something else of value or to promise to pay under stipulated conditions to a counterparty in exchange for the payment of interest,

Financial Instruments

are issued by companies to raise money from investors.

Stocks

are financial instruments that allow investors to lend money to the bond issuer for a stipulated amount of interest over a specified period.

Bonds

can also be used by traders to either speculate about future prices, index levels, or interest rates, or some other financial measure, or to hedge financial risk.

Financial instruments

The 2 parties to these kinds of instruments

speculators and hedgers

attempt to predict future prices or some other financial measure, then buying or selling the financial instruments that would yield a profit if their view of the future should be correct.

Speculators

Are financial securities are bought and sold. They include the organized exchanges For stocks and futures, and the over-the-counter (OTC) market for bonds, foreign exchange, and derivatives.

Financial Markets

where some securities are initially issued

primary markets

where holders of securities can sell at will.

secondary markets

provide the liquidity that many investors demand; otherwise, there would be less demand for financial securities.

Secondary markets

Liquidity

This function may also be termed the credit of loan function.

Money creation

Created for the depositor with a bank.

Enhanced liquidity

100

Provides the mechanism for the making of payments for anything that is purchased.

Payment System