WORK ON TEXT MK, p. 84  Expressions describing price movements and other trends?  Voc: syn. for a)‘disclose’, b)‘standard of comparison’, c) ‘UK bonds’, d)‘never seen before’  Content: What’s the news? Market response? Buyers and sellers? How will the bond purchase be performed?

CENTRAL BANKING & MONEY SUPPLY

CENTRAL BANKS  HNB The Croatian National Bank (CNB)  ECB The European Central Bank ECBS The European Central Bank System  The Bank of England  The Fed The Federal Reserve (System) …

Fill in the missing words: open-market operations, required reserve, the discount rate  The amount of funds that banks must hold in reserve against deposits made by their customers is called ….  The rate at which the central bank lends money to commercial banks is called …  The buying and selling of government securities in the market in order to increase or reduce the amount of money in the banking system is called …

Match the two columns: interest money required lender open-market monetary discount exchange policy rate operations reserve rate rates supply of last resort

Matchings:  interest rates  money supply  required reserve  open-market operations  monetary policy  discount rate  exchange rate  lender of last resort

Central banks are in charge of… ensuring, holding, implementing, providing, supervising, acting  …monetary policy  …price stability  …the exchange rate (forex operations, FX)  …commercial banks  …as lender of last resort  …bank reserves (required reserve)  …currency (cash) to banks  …loans to banks - discounting  …as the government’s bank  …as the bankers’ bank

Central banking  implementing monetary policy  ensuring price stability  supervising the exchange rate (forex operations)  supervising commercial banks  acting as lender of last resort  holding bank reserves (required reserve)  providing currency (cash) to banks  providing loans to banks - discounting  acting as the government’s bank  acting as the bankers’ bank

Assignment: Read the extracts from Schiller’s Essentials of Economics (1996) and fill in the table: MONETARY POLICY PROBLEMS What has gone wrong? GOALS What should be done? MEASURES How should it be done? Expansionary (Loose) Restrictive (Tight)