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Central bank

Central bank Definition

Although officially state owned in most countries, the central bank is usually an autonomous entity responsible for the stability of the national currency (see also money) and the national financial system as a whole. Furthermore it implements the country's monetary policy, which may conflict with the government's fiscal measures. Other duties might include providing financial services to governments (eg. storing other countries' monetary reserves) and supervising of banking institutions (eg. in the case of mergers and acquisitions) in order to protect the consumers.

Additional meaning of Central bank:

Most developed nations today have an "independent" central bank, that is one which operates under rules designed to prevent political interference. Examples include the European Central Bank (ECB) and the Federal Reserve System in the United States.


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