The Central Bank In Colombia

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The Central Bank in Colombia

Introduction

The Bank of the Republic is the first and only central bank that has existed in Colombia, it is founded on March 23, 1923 in the government of President Pedro Nel Ospina who asked the Congress of the Republic authorization to hire international economic experts withThe purpose that these will advise it with the reorganization of national taxes, services, income and creation of the financial entity. This is how Edwin Kemmerer professor at Princeton University who is known as the Moned.

Developing

Its main objective was to remedy a monetary and credit situation of very delicate characteristics that the country had been suffering. Thanks to the help of experts, Law 25 of 1923 “Organic of the Bank of the Republic is issued.”Through which the Government is authorized to carry out and promote the foundation of the Bank of the Republic as an entity created for the issuance, turn, deposit and discount.  Initially it is created for a duration of twenty years from 1923 to 1943, for this date it is decided to extend for 10 years before completing this period in 1951 it is extended until 1973 date on which it extends until 2072.

For the same year, a true financial statement is consolidated with the creation of the Banking Superintendence as an agency responsible for monitoring the behavior and operation of the banks. That said it is important that the Bank of the Republic is a unique institution, which is organized as a legal entity of public law, with administrative autonomy, which means that by enjoying this, it will be able to do free analysis of monetary phenomena,Design and apply the policy in charge without support to another instance of the State, conferred by the Political Constitution and the Law.

Which means that the bank does not belong to any branch of public power, control organisms or the electoral power. He is granted a constitutional hierarchy which allows himIt means that it is completely isolated, that is why it is required to keep harmony with the government’s economic policy. Its main objective is to maintain low and stable inflation.

It does not seek to generate profits, invest in cultural needs and its promotion by creating museums, freeing art, recovering cultural heritage, is interested in culture and society. On the other hand, basic functions such as: “regulate currency, international changes and credit are assigned;Issue the legal currency, producing and circulating coins and tickets because it is the only financial institution empowered for this work;Manage international reserves, paying imports, intervening in the price of the dollar, managing precious metals, when complying with this, it must provide security, liquidity and profitability.

It must guarantee the financial stability of the economy being the last instance lender and banker of credit establishments, and serve as a government fiscal agent supporting it in receiving the issuance of public debt titles and guarding the reservation of these. All of them will be exercised in coordination with general economic policy ”(Art. Political Constitution) The Bank must send 2 annual reports to the Collegiate of the Republic in which they indicate their work, results and other issues they request, they must also deliver a financial report with their income and expenses making it public for all Colombians. 

It is the duty of the President of the Republic to exercise the inspection, surveillance and control of the bank in the terms indicated by the law. This institution will not be able to make loans to the Government, in case of doing so, it will be due to remote and exceptional situations, it will be done as long as the Board of Directors agrees, which is made up of the Bank Manager, the Minister of Finance and five representative members whoThey will be appointed by the President of the Republic for four -year extendable periods, they will be in charge of setting the Bank Statutes, the class of loans, discounts and investments, setting decadent inflation goals.

conclusion

Determine the dates and places where the annual elections must be held, the way to choose main and alternate directors when vacancies remain in the positions for resignation, illness, death among others. For each bank director, a substitute is chosen, at the same time and in the same way of the choice of the main director, this will only be replaced in case of absence in the city or for illness reasons cannot be present at meetings for a periodContinuous one month, likewise the continuous absence of a main member who exceeds three months automatically will have the position to the substitute for the rest of the period. 

References

Hernández, a. G. (2001, March 20). Central Banking in Colombia. History credential magazine. 

Bank of the Republic. (2019, March 12) What are the functions of the Bank of the Republic?

Bank of the Republic. (2020, January 31) The accounts of the Bank of the Republic

Bank of the Republic. A central bank.

Political Constitution of Colombia. (1999, June 12) Chapter VI of Central Banking. Read.

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