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BSP: General Principles (2015) : Banking Laws

This document discusses several topics related to banking laws in the Philippines. It first discusses why the Bangko Sentral ng Pilipinas (BSP) acts as a lender of last resort by lending to banks and similar institutions under financial distress when they have no other means to raise funds. Next, it states that commercial banks in the Philippines cannot acquire shares in cement manufacturing companies as they can only invest in allied undertakings related to banking. Finally, it distinguishes a conservator from a receiver of a bank by their grounds for appointment and termination conditions.

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96 views1 page

BSP: General Principles (2015) : Banking Laws

This document discusses several topics related to banking laws in the Philippines. It first discusses why the Bangko Sentral ng Pilipinas (BSP) acts as a lender of last resort by lending to banks and similar institutions under financial distress when they have no other means to raise funds. Next, it states that commercial banks in the Philippines cannot acquire shares in cement manufacturing companies as they can only invest in allied undertakings related to banking. Finally, it distinguishes a conservator from a receiver of a bank by their grounds for appointment and termination conditions.

Uploaded by

jon jon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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BANKING LAWS

BSP: GENERAL PRINCIPLES (2015)


Why is the Bangko Sentral ng Pilipinas considered a lender of last resort? (2%)

Suggested answer:
The BSP is considered a lender of last resort because it lends to banks and to similar institutions
under financial distress when they have no other means to raise funds.

BANKING LAWS: CLASSIFICATIONS OF BANKS; COMMERCIAL BANKS


(2015)
A commercial bank wants to acquire shares in a cement manufacturing
company. Do you think it can do that? Why or why not? (2%)

Suggested answer:
No. A commercial bank cannot acquire shares in a cement manufacturing company, because a
commercial bank can only invest in the equity of allied undertakings, meaning, undertakings
related to banking. (R.A 8791, sec 30).

BANKS: CONSERVATOR V. RECEIVER (2015)


Distinguish a conservator from a receiver of a bank. (2%)

Suggested answer:
The following are the distinctions:

a. As to grounds: A conservator is appointed if a bank or quasi bank is in a state of continuing


inability or unwillingness to maintain condition of liquidity, while a receiver is appointed if a
bank’s or quasi bank’s assets are less than its liabilities or has willfully violated a final cease
and desist order, involving acts or transactions amounting to fraud or a dissipation of the
assets of the institution.

b. As to termination: A conservator’s obligation is terminated after 1 year from such


appointment as such, while a receiver’s obligation is terminated within 90 days if
liquidation is decided upon or until the bank is viable again. If rehabilitation is decided
upon.

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