Central bank

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The Hindu Business Line  Mar 25  Comment 
Pakistan's central bank maintained its main policy interest rate at 5.75 percent on Saturday, the bank said in a statement, citing stable inflation expectations and the gathering pace of economic act...
newratings.com  Mar 24  Comment 
MOSCOW (dpa-AFX) - Russia's central bank unexpectedly reduced its key interest rate on Friday, after holding it steady for three sessions in a row, and said it could lower it further as inflation slowdown was faster-than-expected amid an...
MarketWatch  Mar 23  Comment 
The Federal Reserve could raise short-term interest rates three more times this year, said San Francisco Fed President John Williams on Thursday. "Three or even four increases as your total makes sense," Williams said in an interview with the Wall...
Forbes  Mar 22  Comment 
For more rapid growth, lower inflation, and stability, most emerging-market countries should dump their central banks and half-baked local currencies.
The Times of India  Mar 22  Comment 
HUNGARY-RATES/POLL:Hungarian central bank seen holding rates, cutting depo limit
The Times of India  Mar 22  Comment 
SRI LANKA-FOREX/:Sri Lankan rupee falls ahead of central bank rate review
Reuters  Mar 18  Comment 
Chinese central bank governor Zhou Xiaochuan said China's growth prospects have improved and that the country is focused on the structural adjustment of its economy.
SeekingAlpha  Mar 16  Comment 
Reuters  Mar 16  Comment 
The Swiss National Bank stuck to its ultra-loose monetary policy on Thursday, as it awaits the outcome of elections across Europe which could trigger an upsurge in demand for the safe-haven Swiss franc should nationalists perform well.




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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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