Chapter 2

Question 1

is primarily responsible for defining and regulating the financial system.

Answer 1

GOVERNMENT

Question 2

describes collectively the financial markets, the participants, and the instruments and securities that are traded in the said markets.

Answer 2

Financial System

Question 3

The functions of the financial systems are to:

Answer 3

1. Provide the funds from the savings units (lenders) to the deficit units (borrowers)
2. Provide a medium of exchange
3. Provide a mechanism for risk sharing
4. Provide a channel through which the central bank can influence the economy, in general, and the financial system in particular.

Question 4

Financial System Participants?

Answer 4

• There are 6 participants or sectors in
  the financial system.

1. Households or consumers;
2. Financial institutions
3. Non-financial firms
4. The government
5. The central bank; and
6. Foreign participants

Question 5

are generally
described as that group receiving income,
majority of which typically come from
wages and salaries. Such income is spent
on goods and services and a part is saved
(if there is enough to save).

Answer 5

Households

Question 6

are equal to current income
less current expenditures.

Answer 6

Gross savings

Question 7

are the firms that
bridge the gap between the surplus units
(SU) or INVESTORS/LENDERS and the
deficit units (DU) or borrowers.

Answer 7

Financial Institutions

Question 8

They channel funds from the lender to
borrowers . They include depository
institutions and non-depository institutions.

Answer 8

Financial Institutions

Question 9

is meant the national ,
provincial, city , and barangays or
towns compromising the Philippines
as a whole.

Answer 9

The Government

Question 10

is part of the
government that we consider as participant in
the financial system.

Answer 10

The Philippine Treasury

Question 11

Bangko Sentral ng Pilipinas (Central Bank of
the Philippines) and all other central banks of
the different countries are mandated to assure
that their respective countries have a healthy
and stable financial system.

Answer 11

The Central Bank

Question 12

is the banker to banks
providing various services to banks.

Answer 12

The Central Bank

Question 13

are the monetary
policymakers of their respective countries.

Answer 13

The Central Banks

Question 14

refer to the participants
from the rest of the world-households,
governments, financial and non-financial
firms, and central banks.

Answer 14

Foreign Participants

Question 15

are parts of globalization.

Answer 15

International trade and International finance

Question 16

is at the top of
the structure , the one mandated to
oversee the financial system of the country
. It is the agency that is tasked to ensure
that the country has a healthy financial
system and a healthy economy.

Answer 16

Bangko Sentral ng Pilipinas

Question 17

It is the central monetary authority.

Answer 17

Bangko Sentral ng Pilipinas
and the Philippine Financial System

Question 18

The government banking institutions include
the:

Answer 18

1. Philippine National Bank
2. Development Bank of the
   Philippines
3. Land Bank of the Philippines
4. Amanah Islamic Bank

Question 19

Non-bank financial institutions are:

Answer 19

1. Private Non-Bank Institutions
2. Government Non-Bank Financial Institutions

Question 20

Financial institutions not under BSP are
the cooperatives that are handled by…

Answer 20

COOPERATIVE DEVELOPMENT
AUTHORITY (CDA)

Question 21

Private Insurance companies are under

Answer 21

INSURANCE COMMISSION

Question 22

Other financial institutions are also overseen
by the

Answer 22

SECURITIES AND EXCHANGE
COMMISSIONS

Question 23

Past Governors of BSP