UK Accounting Glossary
A central bank is fundamentally a chief bank of a given nation. The essential responsibilities of the central bank include issuing and maintaining a stable influx of currency, ensuring optimal employment, and keeping inflation under control. Other tasks of the central bank consist of holding deposits on the reserves of other banks, as well as overseeing lending and exchange practices of commercial lenders. The central bank also plays a vital role of reserving the nation’s emergency funds. In the United States the Federal Reserve System acts in the capacity of a central bank. In addition, the central bank of the United States, or “the fed”, sustains interest rates through executing the monetary policy and trading U.S. Treasury bonds known as T-bills. The central bank also serves the nation by facilitating business conduct and protecting the public interest.
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This glossary post was last updated: 4th February 2020.