Central Bank

RECENT NEWS
Reuters  May 13  Comment 
Pakistan's central bank has granted government-run Bank of China a licence to operate in the country to ease the financial requirements of Chinese-led "Belt and Road" projects, the central bank said on Saturday.
MarketWatch  May 11  Comment 
London stocks close with whimper after central bank trims economic forecast
Wall Street Journal  May 10  Comment 
Central banks have been the world’s biggest buyers of government bonds, but may soon stop—a tidal shift for global markets. Yet investors can’t agree on what that shift will mean.
Reuters  May 6  Comment 
Unemployment is at a decade low, the American economy is growing, and inflation is nowhere in sight, yet for two leading candidates to head the Federal Reserve, the central bank needs shaking up.
Channel News Asia  May 5  Comment 
Unemployment is at a decade low, the American economy is growing, and inflation is nowhere in sight, yet for two leading candidates to head the Federal Reserve, the central bank needs shaking up.
MarketWatch  May 5  Comment 
San Francisco Fed President John Williams wants the central bank to adopt a flexible price-level targeting.
Reuters  May 4  Comment 
Central bank gold demand hit its lowest in nearly six years in the first quarter as Chinese buying dried up, the World Gold Council said in a report on Thursday, feeding into an 18 percent year-on-year drop in overall demand.
Financial Times  May 3  Comment 
Central bank makes biggest injection into financial system in 4 months
The Hindu Business Line  May 3  Comment 
The public sector Central Bank of India has a new premises 'Sorabji Bhawan' in the capital. This new premises at Karol Bagh was inaugurated by Rajiv Rishi, Chairman and Managing Director, Central Ban...
Financial Times  May 2  Comment 
The FT's Kate Allen and Richard Ryan of M&G on bank policy and asset prices




RELATED WIKI ARTICLES
 
TOP CONTRIBUTORS

History

Central banks have emerged over the past four centuries when mankind moved from a system of gold or silver backed currencies to private issuers to fiat money. The first central bank in the world was the Swedish Riksbank, founded in 1668.

Scottish businessman William Paterson founded the Bank of England in 1694 on request of the British government to finance a war.

The First Bank of the USA was founded in 1791 and had a 20-year charter. It was however revived again in 1816 and gave birth to the Second Bank of the United States. This desperate move to stabilize the currency by US president James Madison was later revoked by US president Andrew Jackson who withdrew the bank's Federal Charter in 1836. In 1841 the Second Bank of the United States ceased all operations.

The history of central banking came alive again in 1913 with the constitutionally disputed foundation of the Federal Reserve.

As nearly all currencies in the world have transformed into fiat money over the past 4 centuries, i.e. the notes mandated to be used by government fiat, all countries have some sort of central bank that is responsible for keeping inflation low and provide a money supply that does not overshoot economic growth too much. Other tasks vary widely from country to country.

Political pressure has often led to inflation as rulers want to finance their activities with the in the first place seemingly cheap money.Image:Example.jpg

Central Banking

Central banks primarily purchase short-term debt issued by the governments of the countries in which they serve. Sometimes they've been used as a political piggy bank with the central banks buying riskier investments causing huge losses and inflation if the bank's government doesn't bail them out since the bank has no assets to sell to counter inflation, leaving to many banknotes in circulation.

References

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki