Central bank

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newratings.com  3 hrs ago  Comment 
OSLO (dpa-AFX) - Norway's central bank re-appointed Oystein Olsen as its chief for a second six-year term on Friday. Olsen was appointed as Governor of Norges Bank by the Council of State for a second six-year term, the bank said in a...
MarketWatch  May 26  Comment 
The U.S. dollar trims some of its early decline after a Federal Reserve official suggested that raising interest rates this summer would be “appropriate” so long as economic data holds up.
Clusterstock  May 25  Comment 
KUALA LUMPUR (Reuters) - Scandal-hit Malaysian government fund 1Malaysia Development Berhad (1MDB) [TERRN.UL] said on Wednesday it has made full payment of a fine imposed on it by the country's central bank. Bank Negara Malaysia (BNM) said last...
newratings.com  May 24  Comment 
ANKARA (dpa-AFX) - Turkey's central bank lowered its key lending rate further, while retaining the repo and borrowing rates on Tuesday. The Monetary Policy Committee of the Turkish central bank trimmed the Marginal Funding Rate by 50 basis...
Wall Street Journal  May 22  Comment 
John Williams, president of the Federal Reserve Bank of San Francisco, said Sunday the presidential election wouldn't prevent the central bank from raising interest rates later this year.
guardian.co.uk  May 20  Comment 
EU and US failing to fully comply with commitments made under landmark nuclear deal, says Valiollah Seif The governor of Iran’s central bank has said obstacles stopping Iranian banks from rejoining the global financial system show that the US...
MarketWatch  May 19  Comment 
An almost immediate effect would be to raise inflation expectations as the government expands influence in monetary policy., says Joachim Fels.
The Economist  May 19  Comment 
THE members of the Federal Reserve's monetary-policy making committee have been desperate to hike rates, often, for most of the past year. They were keen to begin hiking in September, but were put off when market volatility threatened to undermine...




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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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