central bank

Central Bank

The entity responsible for overseeing the monetary system for a nation (or group of nations). Central banks have a wide range of responsibilities - from overseeing monetary policy to implementing specific goals such as currency stability, low inflation and full employment. Central banks also generally issue currency, function as the bank of the government, regulate the credit system, oversee commercial banks, manage exchange reserves and act as a lender of last resort.

Notes:

The central banking system in the U.S. is known as the Federal Reserve System (commonly known as "the Fed"), which is composed of twelve regional Federal Reserve Banks located in major cities throughout the country. The main tasks of the Federal Reserve are to supervise and regulate banks, implement monetary policy by buying and selling U.S. Treasury bonds (T-bills), and steering interest rates. Alan Greenspan currently serves as the Chairman of the Board of Governors of the Federal Reserve.

See also: Alan Greenspan, Bank, Bank for International Settlements, The Federal Reserve, Federal Reserve Board - FRB, Inflation, Lender of Last Resort, Monetary Policy, Open Market Operations, Treasury Bill - T-Bill

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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.