Difference between revisions of "Central bank"
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Jazzman831 (talk | contribs) m (dunno how that happened) |
DamianJohn (talk | contribs) (central banks independent from govt) |
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| − | A '''central bank''' is a country's principal monetary authority, responsible for such key functions as issuing [[currency]] and regulating the supply of credit in the [[economy]]. | + | A '''central bank''' is a country's principal monetary authority, responsible for such key functions as issuing [[currency]] and regulating the supply of credit in the [[economy]]. |
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| + | In most western democracies the central bank is independent from the government. This is designed to prevent political interference in monetary policy. Generally a government specifies with legislation the general aims of the central bank (usually maintaining a low level of inflation) but the day to day operations of it are immune from political pressure (in principle if not always in practice) | ||
==Sources== | ==Sources== | ||
Revision as of 03:02, April 17, 2011
A central bank is a country's principal monetary authority, responsible for such key functions as issuing currency and regulating the supply of credit in the economy.
In most western democracies the central bank is independent from the government. This is designed to prevent political interference in monetary policy. Generally a government specifies with legislation the general aims of the central bank (usually maintaining a low level of inflation) but the day to day operations of it are immune from political pressure (in principle if not always in practice)