Central Bank
(Redirected from reserve bank)
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A Central Bank is a bank institution that manages a nation state's currency, money supply, and interest rates.
- AKA: Reserve Bank, Monetary Authority.
- Context:
- It can regulate a Currency (to control price inflation and price deflation)
- It can be a member of Bank for International Settlements.
- It can (often) publish Financial Statistics.
- Example(s):
- Counter-Example(s):
- See: Depository Institution, Monopoly, Monetary Base, Legal Tender, Monetary Policy, Reserve Requirement, Lender Of Last Resort, Financial Panic.
References
2014
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/central_bank Retrieved:2014-3-18.
- A central bank, reserve bank, or monetary authority is an institution that manages a state's currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the amount of money in the nation, and usually also prints the national currency[citation needed], which usually serves as the nation's legal tender. Examples include the European Central Bank (ECB) and the Federal Reserve of the United States. The primary function of a central bank is to manage the nation's money supply (monetary policy), through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis. Central banks usually also have supervisory powers, intended to prevent bank runs and to reduce the risk that commercial banks and other financial institutions engage in reckless or fraudulent behavior. Central banks in most developed nations are institutionally designed to be independent from political interference. Still, limited control by the executive and legislative bodies usually exists.
The chief executive of a central bank is normally known as the Governor, President or Chairman.
- A central bank, reserve bank, or monetary authority is an institution that manages a state's currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the amount of money in the nation, and usually also prints the national currency[citation needed], which usually serves as the nation's legal tender. Examples include the European Central Bank (ECB) and the Federal Reserve of the United States. The primary function of a central bank is to manage the nation's money supply (monetary policy), through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis. Central banks usually also have supervisory powers, intended to prevent bank runs and to reduce the risk that commercial banks and other financial institutions engage in reckless or fraudulent behavior. Central banks in most developed nations are institutionally designed to be independent from political interference. Still, limited control by the executive and legislative bodies usually exists.
- (McLeay & Radia,) ⇒ Michael McLeay, and Amar Radia. (2014). “Money Creation in the Modern Economy." The Bank of England Quarterly Bulletin, 2014-Q1.