Central bank

Central bank

A country's main bank whose responsibilities include the issue of currency, the administration of monetary policy, open market operations, and engaging in transactions designed to facilitate healthy business interactions. See: Federal Reserve System.

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central bank

A bank administered by a national government. A central bank issues money and carries out the country's monetary policy. The Federal Reserve System is the central bank of the United States.

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Central bank. Most countries have a central bank, which issues the country's currency and holds the reserve deposits of other banks in that country. It also either initiates or carries out the country's monetary policy, including keeping tabs on the money supply.

In the United States, the 12 regional banks that make up the Federal Reserve System act as the central bank. This multibank structure was deliberately developed to ensure that no single region of the country could control economic decision-making.