Central Bank

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MarketWatch  5 hrs ago  Comment 
Oil-rich Nigeria’s currency hadn’t been plunging in value as much as you might expect — until this week.
Reuters  7 hrs ago  Comment 
China will continue to push forward with the two-way opening of domestic capital markets, the central bank said in its 2015 annual report.
MarketWatch  Jun 21  Comment 
Australia’s central bank indicated it will remain cautious for now, stopping short of introducing a clear bias to further lower interest rates in minutes of its June 7 policy meeting, released Tuesday.
BBC News  Jun 20  Comment 
Raghuram Rajan is one of the more outspoken and colourful of central bankers, but the head of the Reserve Bank of India is leaving.
The Economic Times  Jun 19  Comment 
However, the Governor would have the tie-casting vote in monetary policy decisions, meaning Rajan's successor would face more pulls and pressures.
Wall Street Journal  Jun 19  Comment 
Indian central bank Gov. Raghuram Rajan, widely credited by investors for keeping India’s economy on a stable path, said he would step down when his term ends in September.
New York Times  Jun 18  Comment 
Mr. Rajan, who as governor of the Reserve Bank of India has been popular with investors but faced opposition from India’s ruling party, said he would leave when his term ends in the fall.
Reuters  Jun 17  Comment 
The shaky world economy faces a potentially severe test in the coming week, when Britain could turn its back on the European Union, which would shock financial markets and put pressure on already stretched central banks to prevent a new slump.
The Economic Times  Jun 17  Comment 
Thailand's telecoms regulator and central bank said on Friday they had agreed steps to improve cybersecurity for electronic transactions via mobile phones as the country pursues a goal to become a cashless society.
Financial Times  Jun 16  Comment 
Swiss National Bank joins chorus of concern from global policymakers over the past few days




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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

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