The Main Functions Of The Central Bank - 998 Words

Central bank is a government created institution which has a very powerful impact by its behaviour on the economy of a country, this includes financial firms as it uses economic tools like credit policies and restriction and supply of money. The central bank of a country would have more impact on the day to day activities of financial services providers, including revenue and cost than any other institution in an economy. The primary function of the central bank is to make changes according to the situation in the market, this would involve supply and cost of money and credit to the financial system, which would directly or indirectly contribute to the nation’s growth and goal. (CHAPTER 2 THE IMPACT OF GOVERNMENT POLICY AND REGULAITON OPN THE FINANCIAL SERVICE INDUSTRY) The main functions of the central bank are that it controls the issue of legal tender and it has monopoly over it, thus in a way also has the control over the supply of money in the economy. As the central bank is the banker’s bank it has control over both the banking and the non-banking financial institutions. It is the government’s bank and performs traditional banking operations, lending and deposit taking for the government it has enough capacity to manage and administer the country’s national test. The central bank acts as the mediator and regulation with regard to the foreign exchange and gold reserve. The central bank plays a very important role in order to maintain and stabilize the price level andShow MoreRelatedCentral Bank And The Role Of The Bank Of Formulating Monetary Policy And Its Management Essay1312 Words   |  6 PagesUnderstanding central bank and the role of bb as central bank in formulating monetary policy and its management Introduction- The Central Bank is the utmost authority that is employed by the government to formulate monetary policy to guide the economy of a country. 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In 2010, Basel III was introduced to tighten equity holdings of banks and it was the primary instanceRead MoreBopexecutive Summary Banking History the First Banks Were Probably the Religious Temples of the Ancient World, and Were Probably Established in the Third Millennium B.C. Banks Probably Predated the Invention of Money.1747 Words   |  7 Pagescom/doc/13314549/Internship-Report-of-Nhttp://www.scribd.com/doc/13314549/Internship-Report-of-NBPBPhttp://www.scribd.com/doc/13314549/Internship-Report-oExecutive Summary BANKING HISTORY The first banks were probably the religious temples of the ancient world, and were probably established in the third millennium B.C. Banks probably predated the invention of money. Deposits initially consisted of grain and later other goods including cattle, agricultural implements, and eventually precious metals such as gold