Federal Reserve System

 Established in 1913.
 12 Federal Reserve Banks (each w/
9 directors – 3 are appointed by the
Board of Governors; the other 6 are
elected by the 3,000 member
commercial banks)
 Board of Governors of the Federal
Reserve System (7 members
appointed by the US president and
confirmed by the US Senate)
 Federal Reserve System
 Federal Open Market Committee
(FOMC) (7 board members and
presidents of NY Fed & 4 other
Feds)
 Federal Advisory Council (12
members)
 Functions of the Federal
Reserve Bank
 Clear checks
 Issue new currency
 Withdraw damaged currency from
circulation
 Administer and make discount
loans to banks in their districts.
 Evaluate proposed bank mergers
and applications to expand bank
activities
 Functions of the Federal
Reserve Bank
 Act as liaisons between the
business community and the
Federal reserve System
 Examine banks
 Collect data on local business
conditions
 Research on conduct of monetary
policy
 Functions of the Federal
Reserve System
 Sets within limits reserve
requirements of banks
 Sets, reviews the discount rate
 Directs open market operations
 Lender of last resort
 Bank of Canada
 Central bank of Canada
 Established in 1934.
 Directors are appointed by the
gov’t to 3 year terms.
 The governor has a 7 year term.
 A governing council, similar to the
FOMC, composed of the governor
and 4 directors conducts monetary
policy.
 Bank of England
 Founded in 1694.
 Not very independent until 1997.
 It can set interest rates which resides
in the Monetary policy Committee,
but can be overruled by the gov’t
thru the Chancellor of the Exchequer.
 The Committee is composed of the
governor, 2 deputy governors, 2
members appointed by the governor,
and 4 outside economic experts.
 Bank of Japan (Nippon
Ginko)
 Founded in 1882.
 Monetary policy is conducted by the
Policy Board.
 The board is composed of the
governor, 2 vice governors, 6
outside members, appointed by the
cabinet and approved by the Diet.
 Bank of Japan (Nippon
Ginko)
 They all serve 5 year terms.
 It has official reserves of US$ 913.6
billion as of June 2007.
 European Central Bank
 Founded in 1999 by the Maastricht
treaty.
 Most independent central bank in
the world.
 It’s independent of both the
European Union and the national
governments.
 It can only be changed by a change
in the Maastricht Treaty.
 It has total control over monetary
 European Central Bank
(ECB)
 It has an executive board
composed of a president, a vice
president, and 4 other members.
 They all have 8 year terms.
Bangko Sentral ng Pilipinas
 Founded in July 3, 1993.
 Took over the old Central bank of
the Philippines which was founded
in 1949.
 Monetary policy is conducted by the
Monetary.
 The Board is composed of 7
members appointed by the
President of the Philippines
Bangko Sentral ng Pilipinas
 Each board member serve a 6 year
term.
 One of the member must be a
member of the Cabinet designated
by the President.
 The Governor is appointed by the
President to a 6 year term.
 The Governor is the CEO of the BSP.
3 Operating Sectors of the
BSP
 Banking Services Sector –serves the
banking needs of all banks like
accepting deposits, servicing
withdrawals, and extending credit
thru the rediscounting facility.
 Supervision and Examination Sector
– enforces and monitors compliance
to banking laws.
3 Operating Sectors of the
BSP
 Resource Management Sector –
serves the HR, financial and
physical resource needs of the BSP.
 All 3 sectors are headed by a
deputy governor.
 It has official reserves of US$ 17
billion as of US$ 17.7 billion as of
June 2005.
 Monetary Authority of
Singapore (MAS)
 Founded on January 1, 1971.
 Policy is conducted by its Board of
Directors.
 There are 8 members to the board
headed by a Chairman who is
appointed by the President of
Singapore.
 Monetary Authority of
Singapore (MAS)
 The other members are the Deputy
Chairman and 6 other appointed
members including its Managing
Director who acts as its COO.
 It has representative offices in New
York and London.
 Its August 2005 reserves stands at
US$ 196.7 billion.
 Bank Negara Malaysia
 Founded in 1959.
 The policy making body is its Board
of Directors.
 Its composed of a Governor and 2
Deputy Governors,, a Secretary
General to the Treasury and 5
Assistant Governors who are
appointed.
 Bank Negara Malaysia
 All members except the Deputy
Governors are appointed by the
King of Malaysia.
 Members have 3 year terms, but
are eligible for re-appointment.
 Bank Negara Malaysia
 It has 5 divisions head by an
Assistant Governor.
 The 5 divisions are Economics,
Investments & Operations,
Organizational Development,
Supervision, and Regulation
 It has rep offices in New and
London.
 It has reserves as of July 31, 2005
of US$ 78.25 billion.
 People’s Bank of China
 Central bank of the Peoples
Republic of China.
 Founded on December 1, 1948.
 It started functioning as a central
bank on Sept. 1983 as approved by
the State Council of China.
 It is headed by a Governor.
 It has official reserves of US$ 1.33
trillion as of June 2007.
 Central Bank of China
 Central bank of the Republic of
China or Taiwan.
 Sole monetary policy making body
in ROC.
 It’s decision making body is
composed of 3 parts – the Board of
Directors, the Board of Supervisors,
and the Governor and the Deputy
Governors.
 Central Bank of China
 The Board of Directors is the
highest decision making body in the
central bank.
 It has 11 to 15 members nominated
by the Executive Yuan (Cabinet)
and appointed by the President.
 The Governor, the Minister of
Finance, and the Minister of
Economic Affairs are ex-officio
directors and executive directors.
 Central Bank of China
 Board directors, except for ex-
officio directors, are appointed to a
5 year term and can be re-
appointed.
 It reserves as of October 2004
stood at US$ 235 billion.
 Bank of Thailand (BOT)
 Founded on June 24, 1940.
 It’s composed of 11 groups.
 It policy making body is the Court of
Directors.
 It’s composed of a Governor and
Deputy Governors appointed by the
King of Thailand who acts as
Chairman and Vice Chairmen
respectively.
 Bank of Thailand (BOT)
 There are other 5 members who are
appointed by the Cabinet.
 It also has assistant governors and
directors.
 It has 3 regional offices – the
Northern Region Office covering
Chiang Mai, Chiang Rai, etc.; the
Northeastern Office covering Ubon
Ratchathani, etc.; Southern Region
Office covering Phuket, Krabi, etc.
 Bank of Thailand (BOT)
 It has rep offices in New York and
London.
 It has official reserves of US$
41.078 billion as of Aug. 26, 2005.
 Hong Kong Monetary
Authority (HKMA)
 Founded on April 1, 1993.
 It reports to the Financial Secretary.
 Manages the Exchange Fund –
Hong Kong’s official reserves
founded in 1935.
 It’s headed by a Chief Executive,
with 2 Deputy Chief Executives, and
9 Executive Directors who
supervises the departments.
 Hong Kong Monetary
Authority (HKMA)
 It has official reserves of US$
121.887 billion as of July 2005.
 It has rep office in London and New
York
 Bank Sentral Republik
Indonesia (Bank Indonesia)
 Founded on May 17, 1999.
 Managed by a Board of Governors.
 It’s headed by a Governor, who is
assisted by a Senior Deputy
Governor who acts as the Vice
Governor, and 4 to 7 other Deputy
Governors.
 Bank Sentral Republik
Indonesia (Bank Indonesia)
 They serve a term of 5 years each
and eligible for re-appointment up to
2 terms.
 The Governor and the Senior Deputy
Governor are appointed by the
President with approval from the
House of Representatives.
 It has rep offices in Tokyo, London,
New York, and Singapore.
 Its official reserves as of end of 2002
was US$ 31.6 billion.
Asian Development Bank
(ADB)
 Asian Development Bank
(ADB)
 Founded in 1966.
 It’s a multilateral development financial
institution.
 Has 67 member countries.
 Headquarters is in Manila.
 Has US$ 53.3 billion in capital.
 Managed by a Board of Governors, a
Board of Directors, a President, 4 Vice
Presidents, a Managing Director General,
and the Heads of departments and
offices.
 Each member country nominates one
governor and an alternate governor to
vote on its behalf.
 Asian Development Bank
(ADB)
 Board of Governors elect the
president for a term of 5 years, with
the possibility of re-election.
 Board of Governors elects the 12
board of directors (each with an
alternate).
 The ADB president chairs the board
of directors.
 Asian Development Bank
(ADB)
 Its main source of funds are
member countries’ contributions
and its bond issues on the world’s
capital markets.
 Its main mission is to fight poverty
by helping its developing member
countries reduce poverty and
improve the quality of life for its
people.
 Asian Development Bank
(ADB)
 Its main tools in providing help to
its developing member countries
are:
2. Policy Dialogue
3. Loans
4. Technical Assistance
5. Grants
6. Guarantees
7. Equity Investments
 Asian Development Bank
(ADB)
 It lends around US$ 6 billion
annually.
 It has 26 offices around the world
and 19 missions in Asia.
 It has more than 2,000 employees
from over 50 countries.
 African Development Bank
(ADB)
 Established in 1963 in Khartoum, Sudan.
 Authorized Capital is US$ 33 billion.
 Governed by a Board of Governors,
Board of Directors, President, 5 Vice
Presidents, and a senior management
team.
 Board of Governors is composed of
ministers and high level officials of
economic and financial institutions of
member countries.
 AAA rated.
 Has total assets of US$ 18.67 billion.
 Has total capital of US$ 6.74 billion.
 Bank of International
Settlements (BIS)
 Central bank of central banks.
 Established in 1930.
 World’s oldest international
financial organization.
 Headquartered in Basel,
Switzerland.
 Governed by a Board of Directors
and an Executive Committee.
 Board of Directors has 19 members.
 Bank of International
Settlements (BIS)
 Provides currency Deposits to
central banks.
 Provides investment services to
central banks.
 Provides short term credits to
central banks, usually on a
collateralized basis.
 World Bank (WB)
 Established July 1, 1944.
 Has 185 member countries.
 Headquarters is in Washington,
D.C.
 Governed by a Board of Directors.
 World Bank (WB)
 Composed of 5 groups:
2. International Bank for Reconstruction
and Development (IBRD)
3. International Development Association
(IDA)
4. International Finance Corporation
5. Multilateral Investment Guarantee
Agency
6. International Center for Settlement of
Investment Disputes.
International Bank for Reconstruction
and Development (IBRD)
 Established in 1945.
 Has 184 member countries.
 Cumulative lending of US$ 407.4
billion.
 Aims to reduce poverty in middle-
income and credit worthy poorer
countries.
 Promotes sustainable development
through low cost loans.
 International Development
Association (IDA)
 Established in 1960.
 Has 165 member countries.
 Cumulative commitments of US$ 161
billion in terms of grants, interest free
credits, and guarantees.
 Provides highly favorable financing to
the world’s 81 poorest countries (home
to 2.6 billion people).
 These countries have little or no capacity
to borrow on market terms.
 International Finance
Corporation
 Established in 1956.
 Has 178 member countries.
 Has committed portfolio of US$ 24.6
billion.
 Promotes development thru private
sector.
 Invests in private enterprises in
developing countries without gov’t
guarantees.
 Provides financing to regions and
countries that have limited access to
 Multilateral Investment Guarantee
Agency
 Established in 1988.
 Has 165 member countries.
 Cumulative guarantees totals US$
14.7 billion.
 Provides political risk insurance
(guarantees) from expropriation,
currency inconvertibility, breach of
contract, war, and civil disturbance.
International Center for Settlement of
Investment Disputes
 Established in 1966.
 Has 142 member countries.
 Has 184 total cases registered.
 Provides international facilities for
conciliation and arbitration of
investment disputes.
 International Monetary Fund
(IMF)
 Established in 1945.
 Has 185 member countries.
 Headquarters in Washington, D.C.
 Has 2,716 employees from 165
countries.
 Has US$ 28 billion outstanding loans to
74 member countries.
 Governed by a Board of Governors
composed of members from each
member countries.
Growth in IMF Membership, 1945 -
2005
(number of countries)
 International Monetary Fund
(IMF)
 Established to promote
international monetary cooperation,
exchange rate stability, foster
economic growth and high levels of
employment, provide temporary
financial assistance to countries to
help balance of payments
problems.
 IMF Activities
 Surveillance – IMF conducts an annual in-
depth appraisals of each member
country’s economic situation.
 Technical Assistance and Training – to
member countries in fiscal policy,
monetary and exchange rate policies,
banking and financial system supervision
and regulation, and statistics.
 Financial Assistance – provides loan to
help the balance of payments problems
of member countries.
 European Central Bank
(ECB)
 Established in 1999.
 It’s the central bank for Europe’s single
currency, the euro €.
 Euro is the common currency in 13 European
Union countries.
 Headquarters is in Frankfurt, Germany.
 Governed by a Governing Council composed of
6 members of the Executive Board and
Governors of each of the national central banks
from the 13 euro area countries.
 Issues euro banknotes and coins.
 In charge of monetary policy and interest rate
policy in the European Union.
Euro
Euro Participating
Countries
 Euro Member Countries
 Belgium
 Germany
 Ireland
 Greece
 Spain
 France
 Italy
 Luxembourg
 The Netherlands
 Austria
 Portugal
 Slovenia
 Finland
 Inter-American Development
Bank
 Established in 1959.
 Has 47 member countries.
 Has total assets of US$ 66.5 billion as of 2006.
 Has total capital of US$ 19.8 billion as of 2006.
 Earned US$ 243 million as of 2006.
 Governed by a Board of Governors, a Board of
Executive Directors, and a management team.
 Multilateral finance institution organized for the
development of the Latin American countries.
 It offers loans and grants to Latin American
countries to reduce poverty, expand growth,
increase trade, investment and regional
integration, private sector development, and
modernization of the countries.
 Inter-American Development
Bank
 Composed of two groups:
2. Inter-American Investment
Corporation (IIC) – focuses on
supporting small and medium
sized businesses.
3. Multilateral Investment Fund (MIF)
– promotes private sector growth
thru grants and investments.