CENTRAL BANKING ECB HNB the FED

Listening: RB p. 61, Exc. I Do exc. II, RB, p.61

Control Establish Ensure Intervene Lend sell government bonds to commercial banks or buying them back in order to alter the amount of credit the banks can offer on foreign exchange markets (buy and sell national currency) to prevent bigger fluctuations amounts of banknotes in circulation min and max lending rates→ control the credit system to a commercial bank in danger of going bankrupt that banks have a sufficient liquidity ratio to allow customers to withdraw their deposits when they want

CENTRAL BANKING Central banks are responsible for: overseeing the monetary s_______ implementing monetary p________ supervising exchange r_________ regulating the credit s________ supervising commercial b_________ acting as a lender of last r________ maintaining currency s________

COLLOCATIONS (LISTENING) CENTRAL BANKS… IMPLEMENT … SET… LIMIT… SUPERVISE / OVERSEE… CONTROL… ESTABLISH… ENSURE… INTERVENE… LEND… SELL/BUY…

http://www.youtube.com/watch?v=0lI8-MvpT7w Handouts with questions What is the main task of the ECB? What was “the gold standard? What was the task of the Central bank in the past? How does the money derive its value today? What’s the role of a modern Central bank? What does the ECB do? Defines Conducts Helps Preserves Ensures 7. Who does the ECB work in close cooperation with? 8. What is its supreme decision making body? Who sits in the board?

HOMEWORK Watch and answer the questions which follow (the next slide) https://www.youtube.com/watch?v=TAlcFwGIQBg

Where are the headquarters of the ECB? Who is the Euro system formed of? What are the main tasks of the Euro system? How is the price stability in the Euro zone maintained? What might happen in case of the high inflation? Who are the members the ECB Governing council? Name the five tasks of the ECB.