Definition of Central bank:
A national bank that provides financial and banking services for its countrys government and commercial banking system, as well as implementing the governments monetary policy and issuing currency.
A central bank is a financial institution given privileged control over the production and distribution of money and credit for a nation or a group of nations. In modern economies, the central bank is usually responsible for the formulation of monetary policy and the regulation of member banks.
Central banks are inherently non-market-based or even anti-competitive institutions. Although some are nationalized, many central banks are not government agencies, and so are often touted as being politically independent. However, even if a central bank is not legally owned by the government, its privileges are established and protected by law.
Autonomous or semi-autonomous organization entrusted by a government to, administer certain key monetary functions, such as to (1) issue, manage, and preserve value of the countrys currency, (2) regulate the amount of money supply, (3) supervise the operations of commercial banks, (4) and serve as a bankers bank and the local lender of last resort. Some Central banks (such as the Bank Of England) provide all these functions, others (such as in Germany and the US) employ two or more organizations. Most Central banks are owned by their respective governments (such as Bank Of England, Banque De France, Reserve Bank Of India), others (such as Belgian Central Bank and Bank Of Japan) have mixed ownerships, and two (Germanys Bundesbank and the US Federal Reserve System) are owned by private banks. Bank Of Sweden (1656) was the first Central bank, followed by the Bank Of England (1694) and the Bank Of France (1800). Bank Of Japan was established in 1888, and the US Federal Reserve System in 1913.
How to use Central bank in a sentence?
- The central bank was responsible for printing the money and therefore they effectively controlled the money supply as well for the nation.
- First, a conflict with the internal monetary policies of central banks may arise.
- I worked for the central bank and it made me proud because I had always wanted to be a banker.
- A central bank can be a lender of last resort to troubled financial institutions and even governments.
- A central bank sets requirements for the banking industry, such as the amount of cash reserves banks must maintain vis-à-vis their deposits.
- A central bank is a financial institution that is responsible for overseeing the monetary system and policy of a nation or group of nations, regulating its money supply, and setting interest rates.
- You should always pay back the central bank as fast as you can so that you can continue to do business with them in the future.
- Central banks enact monetary policy, by easing or tightening the money supply and availability of credit, central banks seek to keep a nation's economy on an even keel.
Meaning of Central bank & Central bank Definition