Central Banks

Central banks are national financial institutions that oversee a country’s monetary system, manage currency issuance, regulate the money supply, and serve as a bank for the government and commercial banks. Their primary functions typically include implementing monetary policy to control inflation, stabilize the currency, and achieve economic goals such as full employment and sustainable growth. Central banks often have the authority to set interest rates, conduct open market operations, and manage foreign exchange and gold reserves. They also play a crucial role in maintaining financial stability and may act as a lender of last resort to prevent banking crises. Key examples include the Federal Reserve in the United States, the European Central Bank in the Eurozone, and the Bank of England in the United Kingdom. Central banks are vital to the economic health of a nation by influencing liquidity, credit availability, and overall economic confidence.