ROLE OF CENTRAL BANKS

PLAY IN FINANCIAL MARKETS

IN THE STRUCTURE OF MAJOR
CENTRAL BANKS AND THE
BANGKO SENTRAL NG
PILIPINAS

Aprilyn S. Alfafara
Jess Mary Mela O. Caluban
 Establishments of relationships

Central banks and the Bangko Sentral ng

Pilipinas (BSP) play an important role in financial
market to attain the stable monetary and the
stability of financial system.
 Definition of terms
Central banks -a financial institution charged with the
responsibility of supervising the monetary system of a nation.

Bangko Sentral ng Pilipinas (BSP) – the central bank of the

Republic of the Philippines.

Financial system- is a group of individuals or bodies corporate

that are involved in transacting money matters, receiving or
paying, lending or borrowing money.

Monetary policy- is the macroeconomic policy laid down by the

central bank. It involves management of money supply and
interest rate and is the demand side economic policy used by
the government of a country to achieve macroeconomic
objectives like inflation, consumption, growth and liquidity.
 Theories
• According to Kent, “Central Bank may be defined as an
institution which is charged with the responsibility of
managing the expansion and contraction of the volume of
money in the interest of general public welfare.”

• According to Samuelson, “Every Central Bank has one

function. It operates to control economy, supply of money
and credit.”

• Kisch and Elkins believe that “the maintenance of the

stability of the monetary standard” as the essential function
of central bank.
 Point of view
A central bank plays an important role in
monetary and banking system. It is responsible
for maintaining financial sovereignty and
economic stability of a country.
 Conclusion

This report understand the role of Central banks

play in Financial Markets and the Bangko Sentral
ng Pilipinas. The analysis shows that Central
bank and the BSP has responsibilities in ensuring
the financial market to have a stable monetary
policy and the stability of financial system.
Retrieved from:
http://www.bsp.gov.ph/about/overview.asp
http://www.economicsdiscussion.net/banks/ce
ntral-bank-and-its-functions/4165
https://www.google.com.ph/amp/s/m.economi
ctimes.com/definition/monetary-policy/amp