What is the Central Bank?

The central bank (also sometimes referred to as the reserve bank or monetary authority) is the entity responsible for the monetary policy of a country or of a group of member states. Its primary responsibility is to maintain the stability of the national currency and money supply, but more active duties include controlling subsidized-loan interest rates, and acting as a "bailout" lender of last resort to the banking sector during times of financial crisis. Most wealthy countries today have an "independent" central bank-that is, one which operates under rules designed to prevent political interference.

Central Bank Responsibilities

Implementation of monetary policy

Controls the nation's money supply

Acts as the government's banker as well as the bankers' bank ("lender of last resort")

Manages the country's forex and gold reserves, as well as the government's stock register

Sets the official interest rate, used to manage both inflation and the country's exchange rate

Central Banks of "The Majors"

Below is a list of central banks for several of the world's major currencies: