Central bank

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guardian.co.uk  5 hrs ago  Comment 
The Bank for International Settlements warns central banks’ reliance on near-zero interest rates threatens global economy The Bank for International Settlements has warned that governments need to abandon debt-fuelled growth and shift to more...
Reuters  12 hrs ago  Comment 
Banks should shut branches to help lift flagging profits and get on a healthier long-term footing, an influential global central banking forum said in a report on Sunday.
Reuters  12 hrs ago  Comment 
Major central banks will limit market turbulence as much as possible after Britain voted to leave the European Union, the head of the Bank for International Settlements said on Sunday.
Reuters  Jun 26  Comment 
Central banks are ready to cooperate to support financial stability in the wake of Britain's vote to leave the European Union, the Bank for International Settlements said on Saturday.
Financial Times  8 hrs ago  Comment 
Clusterstock  Jun 25  Comment 
ZURICH (Reuters) - Central banks are ready to cooperate to support financial stability in the wake of Britain's vote to leave the European Union, the Bank for International Settlements said on Saturday. Central bankers gathered at the...
Benzinga  Jun 24  Comment 
Now that Britain has officially voted to leave the eurozone, central banks are left to decide what (if anything) they will need to do to stabilize global markets. Several Wall Street analysts have already given their takes on the issue. Capital...
Mondo Visione  Jun 24  Comment 
We, G7 Ministers and Governors, respect the intention expressed today by the people of the United Kingdom to exit from the European Union. We are monitoring market developments following the outcome of the referendum on the UK’s membership of...
The Economic Times  Jun 23  Comment 
Bangladesh's central bank is unlikely to extend the contract of US cybersecurity firm FireEye to investigate the electronic theft of $81 million of its money, sources at the bank said, citing high costs as one of the factors.
Wall Street Journal  Jun 22  Comment 
The Bank of England, Federal Reserve and other major central banks will have to act fast no matter which way the vote goes.




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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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