Central bank

central bankreserve bank, or monetary authority is an institution that manages the currency and monetary policy of a  or formal monetary union, and oversees their commercial banking . In to a commercial bank, a central bank possesses a monopoly on increasing the monetary base. Most central also have supervisory and regulatory powers to ensure the stability of member institutions, to prevent bank runs, and to discourage reckless or fraudulent behavior by member .

Central in most developed nations are institutionally independent from interference. Still, limited control by the executive and legislative bodies exists.

Activities of central

The Eccles Reserve Board  in , D.C. houses the main offices of the Board of Governors of the Reserve

Functions of a central bank usually include:

  • Monetary policy: by setting the official interest rate and controlling the  supply;
  • stability: acting as a 's banker and as the bankers' bank (“lender of last ”);
  • Reserve management: managing a 's foreign-exchange and  reserves and  ;
  • Banking supervision: regulating and supervising the banking ;
  • Payments : managing or supervising means of payments and inter-banking clearing systems;
  • and notes issuance;
  • Other functions of central may include , statistical collection, supervision of deposit guarantee schemes, advice to in policy.

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