A central bank, reserve bank, or monetary authority is a public 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 nation's monetary base, and usually also prints the national currency, which usually serves as the nation's legal tender. Examples include the European Central Bank (ECB), the Federal Reserve of the United States, and the People's Bank of China.
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.
Other articles related to "bank, central bank, banks, central banks":
... the Kuomintang fabi and Yen currencies issued by the Bank of Chosen and the Bank of Taiwan ... After the puppet state of Manchukuo was created, the Japanese founded the Central Bank of Manchou on July 1, 1932 in Changchun (長春), then known as Hsinking ... While the bank provided commercial functions, it also acted as a central bank and issuer of currency ...
... The list includes banks (including commercial banks and investment banks), building societies and insurance companies that have either been taken over or merged with another ... United States, the Federal Deposit Insurance Corporation (FDIC) may assume deposits of banks or allow other banks to assume them ... The largest banks to be acquired have been the presumed Merrill Lynch acquisition by Bank of America, the Bear Stearns acquisition by JPMorgan Chase ...
... Indonesia reduced its overnight repo rate, at which commercial banks can borrow overnight funds from the central bank, by two percentage points to 10.25 percent ... The Reserve Bank of Australia injected nearly $1.5 billion into the banking system, nearly three times as much as the market's estimated requirement ... The Reserve Bank of India added almost $1.32 billion, through a refinance operation, its biggest in at least a month ...
... They have argued that the central bank must ensure that inflation expectations must remain well-anchored, in line with the central bank’s price stability objective, in order to improve the ... documented the benefits associated with a central bank’s numerical price stability objective and the pitfalls of optimal control policy design (Orphanides and Williams, 2008) ...
... a trend towards increasing the independence of central banks as a way of improving long-term economic performance ... of economic research has been done to define the relationship between central bank independence and economic performance, the results are ambiguous ... Advocates of central bank independence argue that a central bank which is too susceptible to political direction or pressure may encourage economic cycles ("boom and bust"), as politicians may be ...
Famous quotes containing the words bank and/or central:
“It was like passing a boundary to dive
Into the sun-filled water, brightly leafed
And limbed and lighted out from bank to bank.
Thats how the stars shine during the day.”
—Wallace Stevens (18791955)
“There is no such thing as a free lunch.”
An axiom from economics popular in the 1960s, the words have no known source, though have been dated to the 1840s, when they were used in saloons where snacks were offered to customers. Ascribed to an Italian immigrant outside Grand Central Station, New York, in Alistair Cookes America (epilogue, 1973)