Explain the following in your own words:

 Why BSP need to examine and regulate banks?

In the conduct of consolidated supervision, it is necessary for the BSP to understand the banking group’s organizational
and management structure, nature and lines of businesses, financial strength and risk exposures. Generally, this
information is obtained by the BSP prior to the grant of a license to establish a bank.
 What is the importance of banks to you?

As a student, although banks do a variety of tasks, their main responsibility is to collect money from those who have money—
known as deposits—pool them, and then lend them to others who need money. Banks act as middlemen between depositors
(who provide the bank with funds) and borrowers (to whom the bank lends money).

 Why banks are formed as corporation?

Is to establish capital requirements, assess mergers, and oversee any subsidiaries it may hold. Numerous bank organizations
provide its directors and officers the power to incorporate smaller banks as subsidiary businesses.

A corporation is formed by a number of persons who pool in their resources to enter a business for profit.

Banks, which by their very nature, deal in large amounts of capital. Furthermore, loans are given out for a long duration in some
instances and only an entity with a long tenure could be beneficial in such a case.

The delegation of management to a few who compose the board of directors, will allow flexible management, expansion, as well
as departmentalization. This method of administration to specialization and division of labor which favor's bank's function.

The General Banking Act (Republic Act 8791) requires that all banks shall be established as corporations. With the exception of
building and loan associations, all banking institutions shall be stock corporations, and shall be without exception issue par value
stocks.