What is CENTRAL BANK?

Empowered by the national government to manage and execute key monetary functions: (1) issue, manage, and preserve the value of the country’s currency; (2) regulate the money supply; (3) supervise and provide governance over the operations of commercial banks; (4) serve as a banker’s 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 the Bank Of England, Banque De France, Reserve Bank Of India. Still others, such as Belgian Central Bank and Bank Of Japan, have mixed ownerships. Germany’s 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. These central banks are typically autonomous or semiautonomous organizations.

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Written and fact checked by The Law Dictionary