FACTOID # 20: Statistically, Delaware bears more cost of the US Military than any other state.
 
 Home   Encyclopedia   Statistics   States A-Z   Flags   Maps   FAQ   About 
   
 
WHAT'S NEW
 

SEARCH ALL

FACTS & STATISTICS    Advanced view

Search encyclopedia, statistics and forums:

 

 

(* = Graphable)

 

 


Encyclopedia > Central Bank
Public finance
This article is part of the series:
Finance and Taxation
Taxation
Income tax  ·  Payroll tax
CGT ·  Stamp duty  ·  LVT
Sales tax  ·  VAT  ·  Flat tax
Tax, tariff and trade
Tax haven
Tax incidence
Tax rate  ·   Proportional tax
Progressive tax  ·   Regressive tax
Tax advantage

Economic policy
Monetary policy
Central bank  ·   Money supply
Gold standard
Fiscal policy
Spending  ·   Deficit  ·   Debt
Policy-mix
Trade policy
Tariff  ·   Trade agreement
Finance
Financial market
Financial market participants
Corporate  ·   Personal
Public  ·   Regulation
Banking
Fractional-reserve
Full-reserve  ·   Free banking
Islamic

 view  talk  edit  project

A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country or of a group of member states. Its primary responsibility is to maintain the stability of the national currency and money supply, but more active duties include controlling subsidized-loan interest rates, and acting as a "bailout" lender of last resort to the banking sector during times of financial crisis (private banks often being integral to the national financial system). It may also have supervisory powers, to ensure that banks and other financial institutions do not behave recklessly or fraudulently. Not to be confused with Political economy. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Monetary policy is the process by which the government, central bank... In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ... For other uses, see Gold standard (disambiguation). ... Fiscal policy is the economic term that defines the set of principles and decisions of a government in setting the level of public expenditure and how that expenditure is funded. ... Government spending or government expenditure consists of government purchases, which can be financed by seigniorage (the creation of money for government funding, at a heavy price of high inflation and other possibly devastating consequences), taxes, or government borrowing. ... This article is about budget deficits. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Government debt (also known as public debt or national debt) is... This article does not cite any references or sources. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        For other uses of this word, see tariff (disambiguation). ... A trade pact is a wide ranging tax, tariff and trade pact that usually also includes investment guarantees. ... The field of finance refers to the concepts of time, money and risk and how they are interelated. ... This article does not cite any references or sources. ... There are two basic financial market participant catagories, Investor vs. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... -1... This article does not cite any references or sources. ... For other uses, see Bank (disambiguation). ... Fractional-reserve banking refers to a financial system in which some fraction of the deposits can be used to finance profitable but illiquid investments. ... Economic policy Monetary policy Central bank   Money supply Gold standard Fiscal policy Spending   Deficit   Debt Policy-mix Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Regulation Banking Fractional-reserve Full-reserve   Free banking Islamic        Full-reserve banking is the banking practice in which the... Please wikify (format) this article or section as suggested in the Guide to layout and the Manual of Style. ... Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (Sharia) principles and guided by Islamic economics. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Monetary policy is the process by which the government, central bank... In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ... For other uses, see Loan (disambiguation). ... An interest rate is the rental price of money. ... This article needs to be cleaned up to conform to a higher standard of quality. ... For other uses, see Bank (disambiguation). ...


Most richer countries today have an "independent" central bank, that is, one which operates under rules designed to prevent political interference. Examples include the European Central Bank, the U.S. Federal Reserve, the Banco Central de Chile, the Reserve Bank of Australia, the Reserve Bank of India, the Bank of England, the Bank of Canada, Sveriges Riksbank, the Banco de la República de Colombia, Norges Bank, State Bank of Pakistan, National Bank of Azerbaijan, and the Banco Central de Bolivia (BCB). Some central banks are publicly-owned, and others are, in theory, privately-owned. In practice, there is little difference between public and private ownership, since in the latter case almost all profits of the bank are paid to the government either as a tax or a transfer to the government. Headquarters Coordinates , , Established 1 January 1998 President Jean-Claude Trichet Central Bank of Austria, Belgium, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia, Spain Currency Euro ISO 4217 Code EUR Reserves €43bn directly, €338bn through the Eurosystem (including gold deposits). ... For other uses of terms redirecting here, see US (disambiguation), USA (disambiguation), and United States (disambiguation) Motto In God We Trust(since 1956) (From Many, One; Latin, traditional) Anthem The Star-Spangled Banner Capital Washington, D.C. Largest city New York City National language English (de facto)1 Demonym American... The Federal Reserve System is headquartered in the Eccles Building on Constitution Avenue in Washington, DC. The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central banking system of the United States. ... The Central Bank of Chile (Spanish: ) is the central bank of Chile. ... The Reserve Bank of Australia came into being on 14 January 1960 to operate as Australias central bank and banknote issuing authority. ... The RBI headquarters in Mumbai The RBI Regional Office in Mumbai The RBI heaquarters in Delhi. ... Headquarters Coordinates , , Governor Mervyn King Central Bank of United Kingdom Currency Pound sterling ISO 4217 Code GBP Base borrowing rate 5. ... For the defunct commercial bank, see Bank of Canada (commercial). ... Sveriges Riksbank (Swedish National Bank) is the central bank of Sweden, sometimes called just the Bank of Sweden. ... The State Bank of Pakistan (SBP) is the central bank of Pakistan. ... The National Bank of Azerbaijan (NBA) is the central bank of Azerbaijan. ...

Contents

Activities and responsibilities

Functions of a central bank (not all functions are carried out by all banks):

  • implementation of monetary policy
  • controls the nation's entire money supply
  • the Government's banker and the bankers' bank ("Lender of Last Resort")
  • manages the country's foreign exchange and gold reserves and the Government's stock register;
  • regulation and supervision of the banking industry:
  • setting the official interest rate - used to manage both inflation and the country's exchange rate - and ensuring that this rate takes effect via a variety of policy mechanisms

The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. ... Gold reserves or gold holdings are held by central banks as a store of value generally to be used as a last resort. ...

Monetary policy

Central banks implement a country's chosen monetary policy. At the most basic level, this involves establishing what form of currency the country may have, whether a fiat currency, gold-backed currency (disallowed for countries with membership of the IMF), currency board or a currency union. When a country has its own national currency, this involves the issue of some form of standardized currency, which is essentially a form of promissory note: a promise to exchange the note for "money" under certain circumstances. Historically, this was often a promise to exchange the money for precious metals in some fixed amount. Now, when many currencies are fiat money, the "promise to pay" consists of nothing more than a promise to pay the same sum in the same currency. Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Monetary policy is the process by which the government, central bank... Look up fiat in Wiktionary, the free dictionary. ... For other uses, see Gold standard (disambiguation). ... The flag of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... // A currency board is a monetary authority which is required to maintain an exchange rate with a foreign currency. ... In economics, a monetary union is a situation where several countries have agreed to share a single currency among them, for example, the East Caribbean Dollar. ... A promissory note is a contract detailing the terms of a promise by one party (the maker) to pay a sum of money to the other (the payee). ... Fiat money or fiat currency, is money that is current or legal tender as satisfaction for money debts by government fiat, that is by law. ...

In many countries, the central bank may use another country's currency either directly (in a currency union), or indirectly, by using a currency board. In the latter case, local currency is directly backed by the central bank's holdings of a foreign currency in a fixed-ratio; this mechanism is used, notably, in Hong Kong and Estonia. Image File history File linksMetadata Download high resolution version (960x1280, 563 KB) European Central Bank From German Wikipedia: Fotograf: Florian Kienetz Date: 9. ... Image File history File linksMetadata Download high resolution version (960x1280, 563 KB) European Central Bank From German Wikipedia: Fotograf: Florian Kienetz Date: 9. ... Headquarters Coordinates , , Established 1 January 1998 President Jean-Claude Trichet Central Bank of Austria, Belgium, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia, Spain Currency Euro ISO 4217 Code EUR Reserves €43bn directly, €338bn through the Eurosystem (including gold deposits). ... Old Executive Office Building, Washington D.C. Bank of China Tower, Hong Kong, China In architecture, construction, engineering and real estate development the word building may refer to one of the following: Any man-made structure used or intended for supporting or sheltering any use or continuous occupancy, or An... For other uses, see Frankfurt (disambiguation). ... // A currency board is a monetary authority which is required to maintain an exchange rate with a foreign currency. ...


In countries with fiat money, monetary policy may be used as a shorthand form for the interest rate targets and other active measures undertaken by the monetary authority.


Currency issuance

Many central banks are "banks" in the sense that they hold assets (foreign exchange, gold, and other financial assets) and liabilities. A central bank's primary liabilities are the currency outstanding, and these liabilities are backed by the assets the bank owns. Central banks in jurisdictions with fiat currencies such as the USA may "create" new money, usually backed by the full faith and credit of the government. Motto: (traditional) In God We Trust (official, 1956–present) Anthem: The Star-Spangled Banner Capital Washington, D.C. Largest city New York City Official language(s) None at the federal level; English de facto Government Federal Republic  - President George W. Bush (R)  - Vice President Dick Cheney (R) Independence - Declared - Recognized...


Central banks generally earn money by issuing currency notes and "selling" them to the public for interest-bearing assets, such as government bonds. Since currency usually pays no interest, the difference in interest generates income. In most central banking systems, this income is remitted to the government. The European Central Bank remits its interest income to its owners, the central banks of the member countries of the European Union.


Although central banks generally hold government debt, in some countries the outstanding amount of government debt is smaller than the amount the central bank may wish to hold. In many countries, central banks may hold significant amounts of foreign currency assets, rather than assets in their own national currency, particularly when the national currency is fixed to other currencies.


Naming of central banks

There is no standard terminology for the name of a central bank, but many countries use the "Bank of Country" form (e.g., Bank of England, Bank of Canada, Bank of Russia). Some are styled national banks, such as the National Bank of Ukraine. In other cases they may incorporate the word "Central" (e.g. European Central Bank, Central Bank of Ireland). In many countries, there may be private banks that incorporate the term national. Many countries have state-owned banks or other quasi-government entities that have entirely separate functions, such as financing imports and exports. Headquarters Coordinates , , Governor Mervyn King Central Bank of United Kingdom Currency Pound sterling ISO 4217 Code GBP Base borrowing rate 5. ... For the defunct commercial bank, see Bank of Canada (commercial). ... Bank of Russia (Russian:Банк России) or The Central Bank of the Russian Federation (Russian: Центральный банк Российской Федерации) is a Central bank of Russia. ... The National Bank of Ukraine is the central bank of the country. ... Headquarters Coordinates , , Established 1 January 1998 President Jean-Claude Trichet Central Bank of Austria, Belgium, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia, Spain Currency Euro ISO 4217 Code EUR Reserves €43bn directly, €338bn through the Eurosystem (including gold deposits). ... Banc Ceannais na hÉireann or the Central Bank of Ireland is the Republic of Ireland which had control of the issue of Irish banknotes and coins. ...


In some countries, particularly in some Communist countries, the term national bank may be used to indicate both the monetary authority and the leading banking entity, such as the USSR's Gosbank (state bank). In other countries, the term national bank may be used to indicate that the central bank's goals are broader than monetary stability, such as full employment, industrial development, or other goals. State motto (Russian): Пролетарии всех стран, соединяйтесь! (Transliterated: Proletarii vsekh stran, soedinyaytes!) (Translated: Workers of the world, unite!) Capital Moscow Official language None; Russian (de facto) Government Federation of Soviet republics Area  - Total  - % water 1st before collapse 22,402,200 km² Approx. ... Gosbank- Gosudarstvennyy bank--the State Bank The Gosbank was the central bank of the Soviet Union. ...


The word "Reserve" is also used, primarily in the Australia, India, New Zealand, South Africa and U.S.


Interest rate interventions

Typically a central bank controls certain types of short-term interest rates. These influence the stock- and bond markets as well as mortgage and other interest rates. The European Central Bank for example announces its interest rate at the meeting of its Governing Council (in the case of the Federal Reserve, the Board of Governors). An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. ... A stock market or (equity market) is a private or public market for the trading of company stock and derivatives of company stock at an agreed price; both of these are securities listed on a stock exchange as well as those only traded privately. ... The bond market, also known as the debit, credit, or fixed income market, is a financial market where participants buy and sell debt securities usually in the form of bonds. ... A mortgage loan is a loan secured by real property through the use of a mortgage (a legal instrument). ... Headquarters Coordinates , , Established 1 January 1998 President Jean-Claude Trichet Central Bank of Austria, Belgium, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia, Spain Currency Euro ISO 4217 Code EUR Reserves €43bn directly, €338bn through the Eurosystem (including gold deposits). ... The Federal Reserve System is headquartered in the Eccles Building on Constitution Avenue in Washington, DC. The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central banking system of the United States. ... A board of governors is usually the governing board of a public entity. ...


Both the Federal Reserve and the ECB are composed of one or more central bodies that are responsible for the main decisions about interest rates and the size and type of open market operations, and several branches to execute its policies. In the case of the Fed, they are the local Federal Reserve Banks, for the ECB they are the national central banks.


Interest rate interventions are the most common and are dealt with in more detail below.


Limits of enforcement power

Contrary to popular perception, central banks are not all-powerful and have limited powers to put their policies into effect. Most importantly, although the perception by the public may be that the "central bank" controls some or all interest rates and currency rates, economic theory (and substantial empirical evidence) shows that it is impossible to do both at once in an open economy. Robert Mundell's "impossible trinity" is the most famous formulation of these limited powers, and postulates that it is impossible to target monetary policy (broadly, interest rates), the exchange rate (through a fixed rate) and maintain free capital movement. Since most Western economies are now considered "open" with free capital movement, this essentially means that central banks may target interest rates or exchange rates with credibility, but not both at once. Robert Alexander Mundell C.C. (born October 24, 1932) is a professor of economics at Columbia University. ... I am currently taking a class with professor Mundell and he has repeatedly disputed that the unholy trinity had anything to do with him! In fact he asserts that it should be called the unholy duality. ...


Even when targeting interest rates, most central banks have limited ability to influence the rates actually paid by private individuals and companies.


Even the US must engage in buying and selling to meet its targets. In the most famous case of policy failure, George Soros arbitraged the pound sterling's relationship to the ECU and (after making $2B himself and forcing the UK to spend over $8B defending the pound) forced it to abandon its policy. Since then he has been a harsh critic of clumsy bank policies and argued that no one should be able to do what he in fact did. Soros redirects here. ... GBP redirects here. ... The European Currency Unit (â‚ ; ECU) was a basket of the currencies of the European Community member states, used as the unit of account of the European Community before being replaced by the euro. ...


The most complex relationships are those between the yuan and the US dollar, and between the Euro and its neighbours. The situation in Cuba is so exceptional as to require the Cuban peso to be dealt with simply as an exception, since the US forbids direct trade with Cuba. US dollars were ubiquitous in Cuba's economy after its legalization in 1991, but were officially removed from circulation in 2004 and replaced by the Convertible peso. CNY and RMB redirect here. ... The United States dollar is the official currency of the United States. ... For other uses, see Euro (disambiguation). ... ISO 4217 Code CUP User(s) Cuba Inflation 5% Source The World Factbook, 2006 est. ... The Cuban convertible peso (ISO 4217 code: CUC) is one of two official currencies in Cuba. ...


Policy instruments

The main monetary policy instruments available to central banks are open market operation, bank reserve requirement, interest rate policy, re-lending and re-discount (including using the term repurchase market), and credit policy (often coordinated with trade policy). While capital adequacy is important, it is defined and regulated by the Bank for International Settlements, and central banks in practice generally do not apply stricter rules. Open market operations are the means of implementing monetary policy by which a central bank controls its national money supply by buying and selling government securities, or other instruments. ... The reserve requirement (or required reserve ratio) is a bank regulation that sets the minimum reserves each bank must hold to customer deposits and notes. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Monetary policy is the process by which the government, central bank... This article does not cite any references or sources. ... Tier 1 capital is the core measure of a banks financial strength from a regulators point of view. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Gold standard Fiscal policy Spending   Deficit   Debt Policy-mix Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Regulation Banking Fractional-reserve Full-reserve   Free banking Islamic...


To enable open market operations, a central bank must hold foreign exchange reserves (usually in the form of government bonds) and official gold reserves. It will often have some influence over any official or mandated exchange rates: Some exchange rates are managed, some are market based (free float) and many are somewhere in between ("managed float" or "dirty float"). Foreign exchange reserves (also called Forex reserves) in a strict sense are only the foreign currency deposits held by central banks and monetary authorities. ... A government bond is a bond issued by a national government denominated in the countrys own currency. ... // Gold ingots, like these from the Bank of Sweden, form the base of many monetary systems Gold reserves (or gold holdings) are held by central banks as a store of value. ...


Interest rates

By far the most visible and obvious power of many modern central banks is to influence market interest rates; contrary to popular belief, they rarely "set" rates to a fixed number. Although the mechanism differs from country to country, most use a similar mechanism based on a central bank's ability to create as much fiat money as required. Fiat money or fiat currency, is money that is current or legal tender as satisfaction for money debts by government fiat, that is by law. ...


The mechanism to move the market towards a 'target rate' (whichever specific rate is used) is generally to lend money or borrow money in theoretically unlimited quantities, until the targeted market rate is sufficiently close to the target. Central banks may do so by lending money to and borrowing money from (taking deposits from) a limited number of qualified banks, or by purchasing and selling bonds. As an example of how this functions, the Bank of Canada sets a target overnight rate, and a band of plus or minus 0.25%. Qualified banks borrow from each other within this band, but never above or below, because the central bank will always lend to them at the top of the band, and take deposits at the bottom of the band; in principle, the capacity to borrow and lend at the extremes of the band are unlimited.[1] Other central banks use similar mechanisms. For the defunct commercial bank, see Bank of Canada (commercial). ... The overnight rate is generally the rate that large banks use to borrow and lend from one another on the interbank market. ...


It is also notable that the target rates are generally short-term rates. The actual rate that borrowers and lenders receive on the market will depend on (perceived) credit risk, maturity and other factors. For example, a central bank might set a target rate for overnight lending of 4.5%, but rates for (equivalent risk) five-year bonds might be 5%, 4.75%, or, in cases of inverted yield curves, even below the short-term rate. Many central banks have one primary "headline" rate that is quoted as the "Central bank rate." In practice, they will have other tools and rates that are used, but only one that is rigorously targeted and enforced. The US dollar yield curve as of 9 February 2005. ...


"The rate at which the central bank lends money can indeed be chosen at will by the central bank; this is the rate that makes the financial headlines." - Henry C.K. Liu, in an Asia Times article explaining modern central bank function in detail He explains further that "the US central-bank lending rate is known as the Fed funds rate. The Fed sets a target for the Fed funds rate, which its Open Market Committee tries to match by lending or borrowing in the money market.... a fiat money system set by command of the central bank. The Fed is the head of the central-bank snake because the US dollar is the key reserve currency for international trade. The global money market is a US dollar market. All other currencies markets revolve around the US dollar market." Accordingly the US situation isn't typical of central banks in general. The federal funds rate is the interest rate at which private depository institutions lend balances (federal funds) at the Federal Reserve to other depository institutions overnight. ... The Federal Open Market Committee (FOMC), a component of the Federal Reserve System, is charged under U.S. law with overseeing open market operations in the United States, and is the principal tool of US national monetary policy. ... This article is about short-term financing. ...


A typical central bank has several interest rates or monetary policy tools it can set to influence markets. An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. ...

  • Marginal Lending Rate (currently 5.00% in the Eurozone) A fixed rate for institutions to borrow money from the CB.(In the US this is called the Discount rate).
  • Main Refinancing Rate (4.00% in the Eurozone) This is the publicly visible interest rate the central bank announces. It is also known as Minimum Bid Rate and serves as a bidding floor for refinancing loans. (In the US this is called the Federal funds rate).
  • Deposit Rate (3.00% in the Eurozone) The rate parties receive for deposits at the CB.

These rates directly affect the rates in the money market, the market for short term loans. The discount rate is a financial concept based on the future cash flow in lieu of the present value of the cash flow. ... The federal funds rate is the interest rate at which private depository institutions lend balances (federal funds) at the Federal Reserve to other depository institutions overnight. ... This article is about short-term financing. ...


Open market operations

Through open market operations, a central bank influences the money supply in an economy directly. Each time it buys securities, exchanging money for the security, it raises the money supply. Conversely, selling of securities lowers the money supply. Buying of securities thus amounts to printing new money while lowering supply of the specific security. Open market operations are the means of implementing monetary policy by which a central bank controls its national money supply by buying and selling government securities, or other instruments. ... For security (collateral), the legal right given to a creditor by a borrower, see security interest A security is a fungible, negotiable instrument representing financial value. ...


The main open market operations are:

  • Temporary lending of money for collateral securities ("Reverse Operations" or "repurchase operations", otherwise known as the "repo" market). These operations are carried out on a regular basis, where fixed maturity loans (of 1 week and 1 month for the ECB) are auctioned off.
  • Buying or selling securities ("direct operations") on ad-hoc basis.
  • Foreign exchange operations such as forex swaps.

All of these interventions can also influence the foreign exchange market and thus the exchange rate. For example the People's Bank of China and the Bank of Japan have on occasion bought several hundred billions of U.S. Treasuries, presumably in order to stop the decline of the U.S. dollar versus the Renminbi and the Yen. Collateral within a financial context is used to indicate assets that secure a debt obligation. ... Repurchase agreements (RPs or Repos) are financial instruments used in the money markets and capital markets. ... Maturity refers to the final payment date of a loan or other financial instrument, after which point no further interest or principal need be paid. ... The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. ... Forex swap is an over the counter short term interest rate derivative instrument. ... The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. ... The Peoples Bank of China (PBC) (Simplified Chinese: 中国人民银行; Traditional Chinese: 中國人民銀行; pinyin: Zhōngguó Rénmín Yínháng ) (not to be confused with the Bank of China or the Central Bank of China) is the central bank of the Peoples Republic of China with the power to... The Bank of Japan has its headquarters in this building in Tokyo. ... Treasury securities are government bonds issued by the United States Department of the Treasury through the Bureau of the Public Debt. ... USD redirects here. ... CNY and RMB redirect here. ... Japanese 10 yen coin (obverse) showing Phoenix Hall of Byodoin Yen is the currency used in Japan. ...


Capital requirements

All banks are required to hold a certain percentage of their assets as capital, a rate which may be established by the central bank or the banking supervisor. For international banks, including the 55 member central banks of the Bank for International Settlements, the threshold is 8% (see the Basel Capital Accords) of risk-adjusted assets, whereby certain assets (such as government bonds) are considered to have lower risk and are either partially or fully excluded from total assets for the purposes of calculating capital adequacy. Partly due to concerns about asset inflation and repurchase agreements, capital requirements may be considered more effective than deposit/reserve requirements in preventing indefinite lending: when at the threshold, a bank cannot extend another loan without acquiring further capital on its balance sheet. Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Gold standard Fiscal policy Spending   Deficit   Debt Policy-mix Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Regulation Banking Fractional-reserve Full-reserve   Free banking Islamic... The Basel Capital Accords are a series of discussion papers issued by the Basel Committee on Banking Supervision. ... Tier 1 capital is the core measure of a banks financial strength from a regulators point of view. ... Assets inflation is an economic phenomenon denoting a rise in price of assets, as opposed to ordinary goods and services. ... Repurchase agreements (RP or Repo), are financial instruments used in the money markets. ...


Reserve requirements

Another significant power that central banks hold is the ability to establish reserve requirements for other banks. By requiring that a percentage of liabilities be held as cash or deposited with the central bank (or other agency), limits are set on the money supply. For other uses, see Cash (disambiguation). ... In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ...


In practice, many banks are required to hold a percentage of their deposits as reserves. Such legal reserve requirements were introduced in the nineteenth century to reduce the risk of banks overextending themselves and suffering from bank runs, as this could lead to knock-on effects on other banks. See also money multiplier, Ponzi scheme. As the early 20th century gold standard and late 20th century dollar hegemony evolved, and as banks proliferated and engaged in more complex transactions and were able to profit from dealings globally on a moment's notice, these practices became mandatory, if only to ensure that there was some limit on the ballooning of money supply. Such limits have become harder to enforce. The People's Bank of China retains (and uses) more powers over reserves because the yuan that it manages is a non-convertible currency. Bank reserves are banks holdings of deposits in accounts with their central bank (for instance the European Central Bank or the Federal Reserve, in the later case called federal funds), plus currency that is physically held in banks vaults (vault cash). ... The reserve requirement (or required reserve ratio) is a bank regulation that sets the minimum reserves each bank must hold to customer deposits and notes. ... A poster for the 1896 Broadway melodrama The War of Wealth depicts a typical 19th century bank panic in the U.S. A modern-day bank run, this one on a British bank A bank run (also known as a run on the bank) is a type of financial crisis. ... ... A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns (profits) to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business. ... For other uses, see Gold standard (disambiguation). ... This article is in need of improvement. ... In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ... The Peoples Bank of China (PBC) (Simplified Chinese: 中国人民银行; Traditional Chinese: 中國人民銀行; pinyin: Zhōngguó Rénmín Yínháng ) (not to be confused with the Bank of China or the Central Bank of China) is the central bank of the Peoples Republic of China with the power to... CNY and RMB redirect here. ... Convertibility is the quality of money which is officially backed by government reserves of a precious metal, probably the gold standard. ...


Even if reserves were not a legal requirement, prudence would ensure that banks would hold a certain percentage of their assets in the form of cash reserves. It is common to think of commercial banks as passive receivers of deposits from their customers and, for many purposes, this is still an accurate view.


This passive view of bank activity is misleading when it comes to considering what determines the nation's money supply and credit. Loan activity by banks plays a fundamental role in determining the money supply. The money deposited by commercial banks at the central bank is the real money in the banking system; other versions of what is commonly thought of as money are merely promises to pay real money. These promises to pay are circulatory multiples of real money. For general purposes, people perceive money as the amount shown in financial transactions or amount shown in their bank accounts. But bank accounts record both credit and debits that cancel each other. Only the remaining central-bank money after aggregate settlement - final money - can take only one of two forms:

  • physical cash, which is rarely used in wholesale financial markets,
  • central-bank money.

The currency component of the money supply is far smaller than the deposit component. Currency and bank reserves together make up the monetary base, called M1 and M2. In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ... In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ...


Exchange requirements

To influence the money supply, some central banks may require that some or all foreign exchange receipts (generally from exports) be exchanged for the local currency. The rate that is used to purchase local currency may be market-based or arbitrarily set by the bank. This tool is generally used in countries with non-convertible currencies or partially-convertible currencies. The recipient of the local currency may be allowed to freely dispose of the funds, required to hold the funds with the central bank for some period of time, or allowed to use the funds subject to certain restrictions. In other cases, the ability to hold or use the foreign exchange may be otherwise limited.


In this method, money supply is increased by the central bank when the central bank purchases the foreign currency by issuing (selling) the local currency. The central bank may subsequently reduce the money supply by various means, including selling bonds or foreign exchange interventions.


Margin requirements and other tools

In some countries, central banks may have other tools that work indirectly to limit lending practices and otherwise restrict or regulate capital markets. For example, a central bank may regulate margin lending, whereby individuals or companies may borrow against pledged securities. The margin requirement establishes a minimum ratio of the value of the securities to the amount borrowed. In finance, a margin is collateral that the holder of a position in securities, options, or futures contracts has to deposit to cover the credit risk of his counterparty. ...


Central banks often have requirements for the quality of assets that may be held by financial institutions; these requirements may act as a limit on the amount of risk and leverage created by the financial system. These requirements may be direct, such as requiring certain assets to bear certain minimum credit ratings, or indirect, by the central bank lending to counterparties only when security of a certain quality is pledged as collateral. A credit rating assesses the credit worthiness of an individual, corporation, or even a country. ... Collateral within a financial context is used to indicate assets that secure a debt obligation. ...


Examples of use

The People's Bank of China has been forced into particularly aggressive and differentiating tactics by the extreme complexity and rapid expansion of the economy it manages. It imposed some absolute restrictions on lending to specific industries in 2003, and continues to require 1% more (7%) reserves from urban banks (typically focusing on export) than rural ones. This is not by any means an unusual situation. The US historically had very wide ranges of reserve requirements between its dozen branches. Domestic development is thought to be optimized mostly by reserve requirements rather than by capital adequacy methods, since they can be more finely tuned and regionally varied. The Peoples Bank of China (PBC) (Simplified Chinese: 中国人民银行; Traditional Chinese: 中國人民銀行; pinyin: Zhōngguó Rénmín Yínháng ) (not to be confused with the Bank of China or the Central Bank of China) is the central bank of the Peoples Republic of China with the power to...


Banking supervision and other activities

In some countries a central bank through its subsidiaries controls and monitors the banking sector. In other countries banking supervision is carried out by a government department such as the UK Treasury, or an independent government agency (eg UK's Financial Services Authority). It examines the banks' balance sheets and behaviour and policies toward consumers. Apart from refinancing, it also provides banks with services such as transfer of funds, bank notes and coins or foreign currency. Thus it is often described as the "bank of banks". 25 The North Collonade The Financial Services Authority (FSA) is an independent non-departmental public body and quasi-judicial body that regulates the financial services industry in the United Kingdom. ... In financial accounting, a balance sheet or statement of financial position is a summary of a persons or organizations assets, liabilities and ownership equity on a specific date, such as the end of its financial year. ... In economics, consumers are individuals or households that consume goods and services generated within the economy. ... A £20 Ulster Bank banknote. ... This article is about monetary coins. ...


Many countries such as the United States will monitor and control the banking sector through different agencies and for different purposes, although there is usually significant cooperation between the agencies. For example, money center banks, deposit-taking institutions, and other types of financial institutions may be subject to different (and occasionally overlapping) regulation. Some types of banking regulation may be delegated to other levels of government, such as state or provincial governments. “Banker” redirects here. ...


Any cartel of banks is particularly closely watched and controlled. Most countries control bank mergers and are wary of concentration in this industry due to the danger of groupthink and runaway lending bubbles based on a single point of failure, the credit culture of the few large banks. Reliable system design is the design of systems with high levels of reliability and availability. ...


Independence

Over the past decade, there has been a trend towards increasing the independence of central banks as a way of improving long-term economic performance. However, while a large volume 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 tempted to boost economic activity in advance of an election, to the detriment of the long-term health of the economy and the country. In this context, independence is usually defined as the central bank’s operational and management independence from the government. On the other hand, an independent central bank can, and has been proven in the past to have done as such (The Great Depression), create a boom & bust scenario for the profit of the owners & shareholders of the bank itself. In economics, the term boom and bust refers to the movement of an economy through economic cycles. ... For other uses, see The Great Depression (disambiguation). ...


The literature on central bank independence has defined a number of types of independence.


Legal Independence: The independence of the central bank is enshrined in law. This type of independence is limited in a democratic state; in almost all cases the central bank is accountable at some level to government officials, either through a government minister or directly to a legislature. Even defining degrees of legal independence has proven to be a challenge since legislation typically provides only a framework within which the government and the central bank work out their relationship.


Goal Independence: The central bank has the right to set its own policy goals, whether inflation targeting, control of the money supply, or maintaining a fixed exchange rate. While this type of independence is more common, many central banks prefer to announce their policy goals in partnership with the appropriate government departments. This increases the transparency of the policy setting process and thereby increases the credibility of the goals chosen by providing assurance that they will not be changed without notice. In addition, the setting of common goals by the central bank and the government helps to avoid situations where monetary and fiscal policy are in conflict; a policy combination that is clearly sub-optimal.


Operational Independence: The central bank has the independence to determine the best way of achieving its policy goals, including the types of instruments used and the timing of their use. This is the most common form of central bank independence. The granting of independence to the Bank of England in 1997 was, in fact, the granting of operational independence; the inflation target continued to be announced in the Chancellor’s annual budget speech to Parliament.


Management Independence: The central bank has the authority to run its own operations (appointing staff, setting budgets, etc) without excessive involvement of the government. The other forms of independence are not possible unless the central bank has a significant degree of management independence. One of the most common statistical indicators used in the literature as a proxy for central bank independence is the “turn-over-rate” of central bank governors. If a government is in the habit of appointing and replacing the governor frequently, it clearly has the capacity to micro-manage the central bank through its choice of governors.


It is argued that an independent central bank can run a more credible monetary policy, making market expectations more responsive to signals from the central bank. Recently, both the Bank of England (1997) and the European Central Bank have been made independent and follow a set of published inflation targets so that markets know what to expect. Even the People's Bank of China has been accorded great latitude due to the difficulty of problems it faces, though in the People's Republic of China the official role of the bank remains that of a national bank rather than a central bank, underlined by the official refusal to "unpeg" the yuan or to revalue it "under pressure". PBoC independence can thus be read more as independence from the US which rules the financial markets, not from the Communist Party of China which rules the country. The fact that the CPoC is not elected also relieves the pressure to please people, increasing its independence. See forecasting and unexpected and expected inflation. ... The Peoples Bank of China (PBC) (Simplified Chinese: 中国人民银行; Traditional Chinese: 中國人民銀行; pinyin: Zhōngguó Rénmín Yínháng ) (not to be confused with the Bank of China or the Central Bank of China) is the central bank of the Peoples Republic of China with the power to... The term national bank has several meanings: especially in developing countries, a bank owned by the state an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) In the past, the term national bank has been used synonymously with central bank, but it is... The Communist Party of China (CPC) (simplified Chinese: ; traditional Chinese: ; pinyin: ), also known as the Chinese Communist Party (CCP), is the ruling political party of the Peoples Republic of China and also the worlds largest political party. ...


Governments generally have some degree of influence over even "independent" central banks; the aim of independence is primarily to prevent short-term interference. For example, the chairman of the U.S. Federal Reserve Bank is appointed by the President of the U.S. (all nominees for this post are recommended by the owners of the Federal Reserve, as are all the board members), and his choice must be confirmed by the Congress. For the pop band, see Presidents of the United States of America. ... Congress in Joint Session. ...


International organizations such as the World Bank, the BIS and the IMF are strong supporters of central bank independence. This results, in part, from a belief in the intrinsic merits of increased independence. The support for independence from the international organizations also derives partly from the connection between increased independence for the central bank and increased transparency in the policy-making process. The IMF’s FSAP review self-assessment, for example, includes a number of questions about central bank independence in the transparency section. An independent central bank will score higher in the review than one that is not independent. The World Bank logo The World Bank (the Bank) is a part of the World Bank Group (WBG), is a bank that makes loans to developing countries for development programs with the stated goal of reducing poverty. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Gold standard Fiscal policy Spending   Deficit   Debt Policy-mix Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Regulation Banking Fractional-reserve Full-reserve   Free banking Islamic... The flag of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... For the political science journal, see: International Organization An international organization (also called intergovernmental organization) is an organization of international scope or character. ... The flag of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ...


History

In Europe prior to the 17th century most money was commodity money, typically gold or silver. However, promises to pay were widely circulated and accepted as value at least five hundred years earlier in both Europe and Asia. The medieval European Knights Templar ran probably the best known early prototype of a central banking system, as their promises to pay were widely regarded, and many regard their activities as having laid the basis for the modern banking system. At about the same time, Kublai Khan of the Mongols introduced fiat currency to China, which was imposed by force by the confiscation of specie. Commodity money is money whose value comes from a commodity out of which it is made. ... GOLD refers to one of the following: GOLD (IEEE) is an IEEE program designed to garner more student members at the university level (Graduates of the Last Decade). ... For other uses, see Knights Templar (disambiguation). ... For other uses, see Kublai Khan (disambiguation). ... For other uses, see Mongols (disambiguation). ... Look up fiat in Wiktionary, the free dictionary. ... A commodity metal, historically gold and silver, backing money or currency. ...


The oldest central bank in the world is the Riksbank in Sweden, which was opened in 1668 with help from Dutch businessmen. This was followed in 1694 by the Bank of England, created by Scottish businessman William Paterson in the City of London at the request of the English government to help pay for a war. The US Federal Reserve was created by the U.S. Congress through the passing of the Glass-Owen Bill, signed by President Woodrow Wilson on December 23, 1913. Sveriges Riksbank (Swedish National Bank) is the central bank of Sweden, sometimes called just the Bank of Sweden. ... Headquarters Coordinates , , Governor Mervyn King Central Bank of United Kingdom Currency Pound sterling ISO 4217 Code GBP Base borrowing rate 5. ... Sir William Paterson. ... Motto: Domine dirige nos Latin: Lord, guide us Shown within Greater London Sovereign state Constituent country Region Greater London Status City and Ceremonial County Admin HQ Guildhall Government  - Leadership see text  - Mayor David Lewis  - MP Mark Field  - London Assembly John Biggs Area  - Total 1. ... Motto Dieu et mon droit(French) God and my right Territory of the Kingdom of England Capital Winchester; London from 11th century Language(s) Old English (de facto, until 1066) Anglo-Norman language (de jure, 1066 - 15th century) English (de facto, gradually replaced French from late 13th century) Government Monarchy... The Federal Reserve System is headquartered in the Eccles Building on Constitution Avenue in Washington, DC. The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central bank of the United States. ... The Congress of the United States is the legislative branch of the federal government of the United States of America. ... The Federal Reserve Act of 1913, also called the Glass-Owen Bill, established the Federal Reserve System in the United States. ... Thomas Woodrow Wilson (December 28, 1856—February 3, 1924), was the twenty-eighth President of the United States. ... is the 357th day of the year (358th in leap years) in the Gregorian calendar. ... Year 1913 (MCMXIII) was a common year starting on Wednesday (link will display the full calendar) of the Gregorian calendar (or a common year starting on Tuesday of the 13-day-slower Julian calendar). ...


The People's Bank of China evolved its role as a central bank starting in about 1979 with the introduction of market reforms in that country, and this accelerated in 1989 when the country took a generally capitalist approach to developing at least its export economy. By 2000 the PBoC was in all senses a modern central bank, and emerged as such partly in response to the European Central Bank. This is the most modern bank model and was introduced with the euro to coordinate the European national banks, which continue to separately manage their respective economies other than currency exchange and base interest rates. The Peoples Bank of China (PBC) (Simplified Chinese: 中国人民银行; Traditional Chinese: 中國人民銀行; pinyin: Zhōngguó Rénmín Yínháng ) (not to be confused with the Bank of China or the Central Bank of China) is the central bank of the Peoples Republic of China with the power to... Headquarters Coordinates , , Established 1 January 1998 President Jean-Claude Trichet Central Bank of Austria, Belgium, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia, Spain Currency Euro ISO 4217 Code EUR Reserves €43bn directly, €338bn through the Eurosystem (including gold deposits). ... For other uses, see Euro (disambiguation). ...


References

  1. ^ http://www.bankofcanada.ca/en/backgrounders/bg-p9.html Bank of Canada backgrounder: Target for the Overnight Rate

See also

This is a list of central banks. ... Fractional-reserve banking refers to a financial system in which some fraction of the deposits can be used to finance profitable but illiquid investments. ...

External links

“PDF” redirects here. ... This is a list of central banks. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Gold standard Fiscal policy Spending   Deficit   Debt Policy-mix Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Regulation Banking Fractional-reserve Full-reserve   Free banking Islamic... Basel Committee on Banking Supervision is an institution created by the central bank Governors of the Group of Ten nations (see G-10). ... The Fed redirects here. ... Headquarters Coordinates , , Established 1 January 1998 President Jean-Claude Trichet Central Bank of Austria, Belgium, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia, Spain Currency Euro ISO 4217 Code EUR Reserves €43bn directly, €338bn through the Eurosystem (including gold deposits). ... The Bank of Japan has its headquarters in this building in Tokyo. ... Headquarters Coordinates , , Governor Mervyn King Central Bank of United Kingdom Currency Pound sterling ISO 4217 Code GBP Base borrowing rate 5. ... For the defunct commercial bank, see Bank of Canada (commercial). ... The Reserve Bank of Australia came into being on 14 January 1960 to operate as Australias central bank and banknote issuing authority. ... The Reserve Bank of New Zealand is the central bank of New Zealand and is constituted under the Reserve Bank of New Zealand Act 1989. ... (Banka e Shqipërisë in Albanian) is the Central Bank of Albania. ... Headquarters Senior Executive Sergei Ignatiev Central Bank of Russian Federation Currency Russian ruble ISO 4217 Code RUB Base borrowing rate 10. ... The Croatian National Bank (or HNB for Croatian Hrvatska Narodna Banka) is the central bank of the Republic of Croatia. ... National bank of Serbia (NBS) was founded in 1884. ... Czech National Bank (official name in Czech language: Česká národní banka, abbreviated ČNB) is central bank of the Czech Republic. ... The Peoples Bank of China (PBC) (Simplified Chinese: 中国人民银行; Traditional Chinese: 中國人民銀行; pinyin: Zhōngguó Rénmín Yínháng ) (not to be confused with the Bank of China or the Central Bank of China) is the central bank of the Peoples Republic of China with the power to... It has been suggested that Türkiye Cumhuriyeti Merkez Bankası be merged into this article or section. ... The RBI headquarters in Mumbai The RBI Regional Office in Mumbai The RBI heaquarters in Delhi. ... Bank of Korea is the national central bank of the Republic of Korea (South Korea). ... Bank Indonesia is the central bank of Indonesia. ... Bank Negara Malaysia (BNM) is the Malaysian central bank. ... The State Bank of Pakistan (SBP) is the central bank of Pakistan. ... The Central Bank is depicted on the 100-peso bill. ... The Central Bank of the Republic of China (Taiwan), formerly Central Bank of China (Traditional Chinese: ; Pinyin: ; literally Central Bank) is the central bank of the Republic of China (Taiwan). ... The Bank of Thailand (ธนาคารแห่งประเทศไทย) is the central bank of the Thailand. ... The State Bank of Vietnam (Vietnamese: ) is the central bank of Vietnam. ... Head branch of the Banco de la Nación Argentina, the retail state-owned national bank of Argentina, in Buenos Aires city. ... The Brazilian Central Bank (in Portuguese: Banco Central do Brasil) is Brazils highest monetary authority in and the countrys governing body in finances and economics. ... The Central Bank of Chile (Spanish: ) is the central bank of Chile. ... The Banco de México (Spanish: Bank of Mexico), abbreviated BdeM or Banxico, is Mexicos central bank. ... The Central Reserve Bank of Peru (Spanish: ) is the Peruvian central bank. ... National Bank of Ethiopia is the Central Bank of the African country Ethiopia. ... Headquarters Jerusalem, Israel Governor Stanley Fischer Central Bank of Israel Currency New Israeli Shekel ISO 4217 Code ILS Base borrowing rate 3. ... Bank Markazi, Tehran, Iran Bank Markazi Iran or Bank Markazi Jomhouri Islami Iran (Persian: بانک مرکزی جمهوری اسلامی ايران) is the Central bank of Iran. ... The Central Bank of Iraq, guarded by U.S. troops. ... This article is in need of improvement. ... The Central Bank of Syria (Arabic: ) is the central bank of Syria. ... Reserve Bank of Zimbabwe is that southern African countrys central bank. ... Expansionary monetary policy is monetary policy that seeks to increase the size of the money supply. ... Contractionary monetary policy is monetary policy that seeks to reduce the size of the money supply. ... // When money is deposited in a bank it can then be lent out to another person. ... The Monetary policy of Sweden is decided by Sveriges Riksbank, the central bank of Sweden. ... The capital requirement is a bank regulation, which sets a framework on how banks and depository institutions must handle their capital. ... Open Market Operations are the means by which central banks control the liquidity of the national currency. ... This article lacks information on the importance of the subject matter. ... The discount window is an instrument of monetary policy (usually controlled by central banks) that allows eligible institutions to borrow money, usually on a short-term basis, to meet temporary shortages of liquidity caused by internal or external disruptions. ... Money creation is the process by which money is produced or issued. ... An interest rate is the rental price of money. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Gold standard Fiscal policy Spending   Deficit   Debt Policy-mix Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Regulation Banking Fractional-reserve Full-reserve   Free banking Islamic... Wikipedia does not have an article with this exact name. ... The World Bank logo The World Bank (the Bank) is a part of the World Bank Group (WBG), is a bank that makes loans to developing countries for development programs with the stated goal of reducing poverty. ... Logo of the World Bank The International Bank for Reconstruction and Development is one of the five institutions consisting the World Bank Group. ... The International Finance Corporation (IFC) promotes sustainable private sector investment in developing countries as a way to reduce poverty and improve peoples lives. ... The International Development Association (IDA) created on September 24, 1960, is the part of the World Bank that helps the world’s poorest countries. ... The Multilateral Investment Guarantee Agency (MIGA) is a member of the World Bank group. ... The International Centre for Settlement of Investment Disputes (ICSID), an institution of the World Bank group, was founded in 1966 under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. ...

  Results from FactBites:
 
Central bank - Wikipedia, the free encyclopedia (1288 words)
A central bank, reserve bank or monetary authority, is an entity responsible for the monetary policy of its country or of its group of member states, such as in the European Union.
A central bank is usually headed by a Governor, President in the case of the European Central Bank or Chief Executive/Managing Director in the case of Hong Kong Monetary Authority and Monetary Authority of Singapore.
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 tempted to boost the economy in advance of an election, to the detriment of the long-term health of the economy.
Central bank - definition of Central bank in Encyclopedia (1103 words)
A central bank is an entity responsible for monetary policy of its country (or in the case of the EU, group of member countries).
Its primary responsibility as a central bank is for the stability of the national currency and money supply, including interest rates; and acting as a lender of last resort to the banking sector and the national financial system as a whole.
One of the oldest banks that performed some of the duties of a central bank was the Bank of Sweden that was opened in 1668 with help from Dutch businessmen.
  More results at FactBites »

 
 

COMMENTARY     


Share your thoughts, questions and commentary here
Your name
Your comments

Want to know more?
Search encyclopedia, statistics and forums:

 


Press Releases |  Feeds | Contact
The Wikipedia article included on this page is licensed under the GFDL.
Images may be subject to relevant owners' copyright.
All other elements are (c) copyright NationMaster.com 2003-5. All Rights Reserved.
Usage implies agreement with terms, 1022, m