Central bank

A central bank, reserve bank or monetary authority, is an entity responsible for the monetary policy of its country, or group of member countries (as in the EU).

Related Topics:
Monetary policy - Country - EU

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

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).

Related Topics:
Currency - Money supply - Loan - Interest rates - Bailout - Lender of last resort - Banking sector - Crisis

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

It may also have supervisory powers to ensure that banks and other financial institutions do not behave recklessly or fraudulently. 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 Auhority and Monetary Authority of Singapore.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

In most countries the central bank is state-owned and has some degree of autonomy which allows for the possibility of government intervening in monetary policy. An "independent central bank" is one which operates under rules designed to prevent political interference; examples include the US Federal Reserve, the UK Bank of England (since 1997), Reserve Bank of India (1935), the Bank of Canada and the European Central Bank.

Related Topics:
US - Federal Reserve - UK - Bank of England - Reserve Bank of India - 1935 - Bank of Canada - European Central Bank

~ ~ ~ ~ ~ ~ ~ ~ ~ ~