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Question 1

What is regulation designed to do?

Answer 1

Regulation was designed to set rules and guidelines to be followed to ensure balance among individuals, firms and/or citizens.
Regulation is also designed to reconcile
conflicting interests

Question 2

A process whereby the designated government authority provides oversight
and establishes rules for firms in an industry.

Answer 2

Regulation

(Public Utility Research Center in the University of Florida)

Question 2

This is a factor that requires established policies to
consider the effect on the consumers’ welfare.

Answer 2

Consumer Protection

Question 2

This is a factor that is
considered to ensure the dynamism and agility of the policy to adopt in a fast-changing
environment.

Answer 2

Efficiency Enhancement

Question 2

This is the probability of a firm to fail its objective that may result in a ripple effect
to the economy.

Answer 2

Systemic risk

Question 3

This is a type of regulation whereby rules and standards are set to oversee
the ability of the companies to establish and maintain appropriate levels of capital to
sustain its operation.

Answer 3

Financial Regulation

(also includes setting controls over the market factors that will
affect the financial sustainability of the firms and players in the industry.)

Question 3

What are the 4 main market drivers?

Answer 3

1. Competitiveness
2. Market behavior
3. Consistency
4. Stability

Question 3

The behavior of the firms in the industry can also be regulated. Their behavior in the market
can be demonstrated through?

Answer 3

(1) integrity in their activities
(2) integrity in representation.

Question 4

The most common issue is the company’s ability to?

Answer 4

to provide fair and consistent information.

(Consistency is one of the most important business principles)

Question 5

This is a critical factor that firms should achieve in the long run

Answer 5

Market stability

Question 6

This is a threat that arises where a segment or firm is not able to meet its
commitment because of failure to address the risks of the market.

Answer 6

Systemic Instability

Question 7

This will act as the central
monetary authority which will act as a corporate body that is responsible concerning
money, banking and credit.

Answer 7

BSP (Bangko Sentral ng Pilipinas)

Question 7

This was created to serve as insurer of
deposits placed in banks.

Answer 7

Philippine Deposit Insurance Corporation (PDIC)

Question 7

What are the 3 mandates of PDIC?

Answer 7

1. Provision of deposit insurance (500k/depositor)
2. Examination and Resolution
3. Receivership and Liquidation

Question 7

This was created to regulate and supervise the
insurance, pre-need, and health maintenance organization industry.

Answer 7

Insurance Commission (IC)

It is governed by the
Department of Finance

Question 7

This is the national government regulatory agency and securities and investment
instruments and promote corporate administer oversight on the corporate sector, capital
market participants governance over these.

Answer 7

Philippine Securities and Exchange Commission (SEC)

Question 7

This is the lead agency to promote investment in the country and thereby generate local and
foreign investment in the country. It is an attached agency of the Department of Trade and
Industry.

Answer 7

Board of Investments (BOI)

Question 8

This serves to allocate bank resources to different sectors of the economy. It prevents
banks from making excessive loans and other credit accommodations to a single borrower
or corporate group.

Answer 8

Single Borrower Limit (SBL)

Currently, the SBL is 25 per cent of the net worth of a bank.

Question 9

What regulatory principle ensures transparency in credit offerings?

Answer 9

Truth in Lending Act

Question 10

Which regulatory objective focuses on preventing the economic ripple effects of firm failures?

Answer 10

Systemic Risk