Central bank

A central bank, reserve bank, or monetary authority is the institution that manages the currency, money supply, and interest rates of a state or formal monetary union,[1]and oversees their commercial banking system. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, and also generally controls the printing/coining of the national currency,[2] which serves as the state's legal tender.[3] A central bank also acts as a lender of last resort to the banking sector during times of financial crisis. Most central banks also have supervisory and regulatory powers to ensure the solvency of member institutions, to prevent bank runs, and to discourage reckless or fraudulent behavior by member banks.

Central banks in most[quantify] developed nations are institutionally independent from political interference.[4][5] Still, limited control by the executive and legislative bodies exists.[6][7]

Activities and responsibilities of the central banks

The Eccles Federal Reserve Board Building in Washington, D.C. houses the main offices of the Board of Governors of the United States' Federal Reserve System

Functions of a central bank may include:

  • implementing monetary policies.
  • 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
  • controlling the nation's entire money supply
  • the Government's banker and the bankers' bank ("lender of last resort")
  • managing the country's foreign exchange and gold reserves and the Government bonds
  • regulating and supervising the banking industry
Other Languages
Alemannisch: Notenbank
العربية: بنك مركزي
asturianu: Bancu central
azərbaycanca: Mərkəzi Bank
Bân-lâm-gú: Tiong-iong gîn-hâng
български: Централна банка
bosanski: Centralna banka
català: Banc central
Cymraeg: Banc canolog
Deutsch: Zentralbank
eesti: Keskpank
español: Banco central
Esperanto: Centra banko
euskara: Banku zentral
français: Banque centrale
Gaeilge: Banc ceannais
한국어: 중앙은행
Bahasa Indonesia: Bank sentral
íslenska: Seðlabanki
italiano: Banca centrale
עברית: בנק מרכזי
қазақша: Орталық банк
latviešu: Centrālā banka
Lëtzebuergesch: Zentralbank
lietuvių: Centrinis bankas
македонски: Централна банка
Bahasa Melayu: Bank pusat
Nederlands: Centrale bank
日本語: 中央銀行
norsk nynorsk: Sentralbank
oʻzbekcha/ўзбекча: Markaziy bank
ភាសាខ្មែរ: ធនាគារកណ្ដាល
português: Banco central
саха тыла: Киин баан
Simple English: Central bank
slovenčina: Centrálna banka
slovenščina: Centralna banka
српски / srpski: Централна банка
srpskohrvatski / српскохрватски: Centralna banka
svenska: Centralbank
татарча/tatarça: Üzäk bank
Türkçe: Merkez bankası
українська: Центральний банк
Tiếng Việt: Ngân hàng trung ương
文言: 中央銀行
吴语: 中央银行
粵語: 中央銀行
中文: 中央银行