decentralizing currencies 

Central Banking

Central Banks are state owned banking facilities that serve as the agency whose primary concern is the amount of money in circulation. Central Banks serve as the money issuing authority for governments. In other words Central Banks are the organization that implements Monetary Policy. They do this primarily through managing interest rates, setting reserve requirements and acting as a lender of last resort to the commercial banks. So not only do they serve as the main method by which the Money Supply is expanded or contracted Central Banks help to maintain stability in the banking sector by maintaining confidence in the nations currency. Central Banks help to prevent bank runs and hyperinflation though as we shall see they are the cause of inflation.

Central Banks as the vehicle through which nations implement Monetary Policy must be looked at in terms of their ability to fulfill the objectives of Monetary Policy which is to provide a stable currency and reliable economic growth without inflation.

 

 

 

 

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