Central Bank

AAA

DEFINITION of 'Central Bank'

The entity responsible for overseeing the monetary system for a nation (or group of nations). Central banks have a wide range of responsibilities, from overseeing monetary policy to implementing specific goals such as currency stability, low inflation and full employment. Central banks also generally issue currency, function as the bank of the government, regulate the credit system, oversee commercial banks, manage exchange reserves and act as a lender of last resort.

INVESTOPEDIA EXPLAINS 'Central Bank'

The central banking system in the U.S. is known as the Federal Reserve System (commonly known as "the Fed"), which is composed of 12 regional Federal Reserve Banks located in major cities throughout the country. The main tasks of the Federal Reserve are to supervise and regulate banks, implement monetary policy by buying and selling U.S. Treasury bonds and steer interest rates. Ben Bernanke currently serves as the chairman of the Board of Governors of the Federal Reserve.

RELATED TERMS
  1. Libyan Investment Authority

    The Libyan Investment Authority (LIA) is a government entity ...
  2. Bank Lending Survey

    A questionnaire circulated by a country's central banking authority ...
  3. Dual Banking System

    The system of banking that exists in the United States in which ...
  4. Alan Greenspan

    The former chairman of the Board of Governors of the Federal ...
  5. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
  6. Bank For International Settlements ...

    An international organization fostering the cooperation of central ...
Related Articles
  1. Economics

    The Federal Reserve

  2. Bonds & Fixed Income

    The Treasury And The Federal Reserve

  3. thinkstock|istock
    Economics

    How Much Influence Does The Fed Have?

  4. Personal Finance

    How The U.S. Government Formulates Monetary ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center