A central bank is not a profit maximizer.

It is basically concerned in achieving

monetary stability, full employment, and

economic growth.

Central Bank

- the central monetary authority which

provides policy direction in the areas of

money, credit, and banking.

- it supervises the operation of banks and

regulates the activities of non-bank

financial intermediaries.

Main Functions of Central Bank

1) It acts as a lender of last resort, and

2) Controller of money supply

Bank of England

- organized in 1694 as a joint stock

company

- oldest real central bank

The Riksbank of Sweden

- established in 1656 as a private bank

- reorganized in 1668 as a State bank

The Bank of France

- it was created in 1800 mainly from

private capital and the rest from

government funds

- its founder is Napoleon Bonaparte

Other Central Banks

Bank of Netherlands (1814)

National Bank of Austria (1817)

Bank of Norway (1817)

At the end of 1800, almost all countries

in Europe and other parts have organized

their own central banks.

Economics – proper allocations and

efficient use of scarce resources to satisfy

human wants.

Through the powers and policies of a

central bank it can:

Direct flow of money and credit into the

various sectors of the economy.

Improve the social and economic

conditions of the poor.

Miguel Cuaderno

– 1st governor of the Central Bank

– developed the concept of central

bank in 1933

– chose the charter of the Central

Bank of Guatemala as the model for

our Central Bank

A Central Bank Council was formed in

August 1947.

In 1948, President Manuel Roxas

submitted to Congress a bill establishing

the Central Bank of the Philippines. This

bill was to become Republic Act (RA)

No. 265, also known as The Central Bank

Act.

On June 15, 1948, the Charter of the

Central Bank was signed into law by

President Elpidio Quiriino.

On January 3, 1949, the Philippine

Central Bank was inaugurated and

formally opened.

In 1900, Act No. 52, placed all banks

under the Bureau of Treasury.

In February 1929, the Bureau of banking

took over the supervisions of banks.

Original Objectives

1) Maintenance of monetary stability in the

Philippines;

2) Preservation of the international value of

the peso and its convertibility into other

freely convertible currencies; and

3) Promotion of a raising level of

production, employment and real

income in the Philippines.

Amended Objectives

1) To maintain internal and externalmonetary stability n the Philippines, andto preserve the international value ofthe peso and the convertibility of thepeso into other freely convertiblecurrencies; and

2) To foster monetary, credit, andexchange conditions conducive to abalanced and sustainable growth of theeconomy.

Miguel Cuaderno

Andres V. Castillo

Alfonso Calalang

Gregorio S. Licaroz

Jaime C. Laya

Jose Fernandez Jr.

Jose L. Cuisia Jr.

Gabriel C. Singson

1949 – 1960

1961 – 1967

1968 – 1970

1970 – 1981

1981 – 1984

1984 – 1990

1990 – 1993

1993 – present