A central bank or a central issuing bank is an institution, which is responsible for the execution of money and monetary policy of a currency area. Both one calls the institution and the responsible persons persons also currency guardians. Since there are both national and supranational currency areas, central banks are both on national level (US-Federal reserve system, bank OF England, bank OF Japan etc.) and on supranational level (e.g. To find European central bank).

Central banks are usually national institutions and have to certain extent sovereign tasks.

History

Issuing banks were originally business banks, the notes publications. This were receipts for coined money, which was taken by the issuing banks in Verwahrung. The receipts were used as currencies. They gave the right to their owners to require of a bank obligated to it the publication of the appropriate quantity coined money at any time.

From this the requirement of the issuing banks developed to cover the notes by existence first of coins, spent by them to secure later at precious metals (gold, silver) (covering obligation). With the time the quantity of paper money exceeded the quantity of coins and precious metals clearly. Therefore notes do not have to be taken off today in many countries any more by gold reserves of the issuing banks (abolition of the gold reserve obligation).

For instance since end 19. Century turned into the states to extract the right to the expenditure from notes from the different issuing banks of their country and a central issuing bank, the central bank of the country to transfer. This supplies for its part the business banks via credits with notes. A first attempt already found in 18. Century instead of in England and then France.

With the establishment of central banks often also a centralization of the monetary system and the creation of a uniform currency were connected. Up to then the individual issuing banks had often spent their own currencies. In addition two examples: 1907 were established the Swiss central bank and Franconias as new currency imported in place of several kantonalen issuing banks with own regional currencies. And 1998 the establishment of the European central bank and the creation of the Euros as new European currency carried out in place of the central banks of the individual countries and the national currencies.

Central bank for Germany is the German Federal Bank in Frankfurt/Main. It is responsible for supply of money and exchange in Germany. For mastering their tasks you are attached the national central banks within Germany. The German Federal Bank the European central bank, which has likewise its seat in Frankfurt, is superordinate. This is responsible for the supply of money within the European union and for the euro. For the international exchange of the central banks in Basel the bank for international clearing payment BIZ exists.

Tasks

The possible fields of a central bank can be

• the definition and execution of the monetary policy,
• the definition and execution of the monetary policy,
• the Verwahrung of the value reserves (money, gold, foreign exchange),
• the emission of notes and coins (creation of money),
• the guidance of central bank accounts for the exchange of the business banks among themselves,
• the supervision of the bank and financial sector as well as
• the warranty or promotion of a functioning exchange.

Depending upon currency area the tasks of the central banks differ partly substantially. An overview of the fields of the EZB is here.

Instruments

Over a whole set of instruments central banks can exert influence on the economic development within and outside of the currency area. The articles give an overview of the different instruments to monetary policy, monetary policy and supervision of financial market.

Central bank balance

Active:

• Currency reserves
  • Gold
  • Foreign exchange
• Demands on business banks
  • Main refinancing business
  • long-term refinancing business
  • Purifying of you operations in the form of limited transactions
• Demands on public households
• Other active (e.g. securities)

Liabilities

• Circulation of money (C)
• Business banks
  • Inserts on current accounts including Mindestreserveguthaben
• Inserts of foreign institutions
• Inserts of the state
• Other liabilities

Influence of the state

The central bank is affected in the individual currency areas in different measure by governments and groups of interests. The countries of the European union had to dismiss their central banks in the apron of the introduction of the monetary union into legal and actual independence. In the central bank statute of the European Union the independence of the EZB is guaranteed, even if it can lead to conflicts that the members of the presidency of the EZB will appoint by the European advice.

See also

• List of the central banks
• Hamburg account

Related links

• Central bank message
• Overview of embossing places & central banks

Articles in category "Central bank"

We found here 4 articles.

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