William Bransah
School of finance & Financial Management | Business University of Costa Rica
Abstract
The two tiered system puts the central bank in control of the commercial banks. Therefore, the government authorities have delegated some of the regulatory responsibilities to the central bank. It is the job of the central bank to ensure that commercial banks are conducting their business in a manner which is considered ethical as well as safe. In order to do so, the central bank has to undertake certain regulatory functions. In this article, I will describe the regulatory functions performed by the central bank. Banking in old times was not the tightly monitored and tightly regulated business that it is today. Instead, earlier banking was completely a free market operation. Any entrepreneur could enter and exit the banking business without any restriction or licenses.
Keywords: Public Financial Administration, Regulatory Role Performed, Central Bank
