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CENTRAL BANKING. CENTRAL BANKS  HNB The Croatian National Bank (CNB)  ECB The European Central Bank ECBS The European Central Bank System  The Bank.

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Presentation on theme: "CENTRAL BANKING. CENTRAL BANKS  HNB The Croatian National Bank (CNB)  ECB The European Central Bank ECBS The European Central Bank System  The Bank."— Presentation transcript:

1 CENTRAL BANKING

2 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) …

3 Which words are defined below? open-market operations, required reserve, 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 …

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

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

6 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

7 Central banking  implementing monetary policy  ensuring price stability  supervising the exchange rate (forex, FX, 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

8 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)

9 Central Banker of the Year Global and Europe, 2008  Fill in the missing words (trends)  Find synonyms: -never occurring before (1) -unusual, unconventional (2) -limit/ceiling (3), govt. interference (3) -isolation (4), lack of money (4)  Instruments of monetary policy?


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