In the modern economy, what is a “central bank”? O A bank for government O Payment facilitator O Supervisor/regulator O Monetary policy.

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Presentation transcript:

In the modern economy, what is a “central bank”? O A bank for government O Payment facilitator O Supervisor/regulator O Monetary policy

The bank for government Collect & disperse funds Act as agent Borrowing Intervention “Lender of Last Resort”

Payment facilitator Issuer and guardian of currency and coin We are not the mint. We are not the Bureau of Engraving & Printing Processor of checks Processor of electronic payments

Supervisor/regulator Protect/monitor banking/payment system Maintain standards Audit financial institutions & holding companies

Monetary policy Conduct monetary policy Set and change the quantity of money Set and change the price of money Maintain pegs to other currencies Maintain one currency’s value relative to another currency Currency boards

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