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Central Bank

A Central Bank is a government agency.  Typically, the Central Bank of a country will issue currency, administer the nation's monetary policy, hold reserves for the banks of other nations, and conduct operations in such a way that it benefits the nations' commercial (private) banks.  In the United States, the Federal Reserve is the country's central bank.  Federal Reserve Board decisions affect monetary policy in the U.S.  Through its Open Market Operations, the Federal Reserve is able to influence the operations of commercial banks, and by doing that the Federal Reserve is able to extend its influence indirectly into the private sector in a variety of ways.

© 2011 by Michael C. Dennis.  All Rights Reserved