Central Bank

Wall Street Journal  3 hrs ago  Comment 
Malta’s new central bank governor rejected claims that European Central Bank policy has fueled populism, saying Europe’s economies are healthier and less susceptible to extreme politics thanks to ECB intervention.
Financial Times  10 hrs ago  Comment 
Signs of success from tightening plan as investors start to trust short-term debt
SeekingAlpha  Oct 25  Comment 
Wall Street Journal  Oct 23  Comment 
The Canadian government has ample fiscal room to increase spending on infrastructure, Bank of Canada Gov. Stephen Poloz said.
Benzinga  Oct 20  Comment 
Mohamed El-Erian, a well-respected economist and chief economic adviser at Allianz, isn't a fan of owning stocks. In an interview with Bloomberg, El-Erian said he isn't avoiding stocks because of the perceived risks. In fact, his portfolio...
Forex News  Oct 20  Comment 
The Turkish lira was little changed today after the nation’s central bank made a surprise decision to keep interest rates unchanged. The Central Bank of the Republic of Turkey left its interest rates without change during today’s...
MarketWatch  Oct 19  Comment 
Brazil’s central bank cut its benchmark interest rate Wednesday, the first time in four years, as inflation slows and Latin America’s largest economy shows more signs it is starting to recover from a disastrous downturn.



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.


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