Nobody downloaded yet

Discuss the key roles of the central bank in an economy. Should central banks be independent - Essay Example

Comments (0) Cite this document
Summary
The economies of different countries are driven by policies, rules and regulation that determine the type of financial standards and playing field given to different economic sectors in the country. The nature of an economy is such that checks and balances at play should be…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.4% of users find it useful
Discuss the key roles of the central bank in an economy. Should central banks be independent
Read TextPreview

Extract of sample
"Discuss the key roles of the central bank in an economy. Should central banks be independent"

Download file to see previous pages The institution, which is the chief regulator, is called the central bank.
The 17th century money was dominated by gold and silver, with verbal and written promises also being a form of payment. Paper money and attempts to control money flow were first used in China. European form of central banks came in existence in form of Knights Templar’s promises of payment. The modern precursor of central bank was the bank of Sweden, the Sveriges Riksbank, which acted as the source of funding for government operations and was answerable to the political leadership. Modern central banks operate on the model created by Charles Montagu, which operated in the Bank of England. Montagu’s model operated on the subscription of people to the government’s loan, which would guarantee the subscribers incorporation as attracted certain privileges like banking notes. Central banks evolved with increasing public outlook and monetary functions to be what they are today. Central banks operate on the cumulative process that creates quantity theory. This theory was developed by Henry Thornton, to explain the England’s monetary crisis of 1797, with reference to the bank withholding withdrawal of notes from the bank (Rosaveare 34).
The Bank Charter of 1844 gave the Bank of England the monopoly over issuance of banknotes and the reserves which any financial institution should have in the bank before issuing a certain value of banknotes (“The Bank” n.pag).19th century witnessed the spread and growth of central banks spread in many European countries. The Banque de France was established in 1800, the U.S. Federal Reserve in 1923, Australia, Mexico, Chile and Colombia established in 1920, 1925 and 1923 respectively. Prior to the Great Depression, only a few countries like New Zealand, China and Brazil had not established central banks. All central banks are government owned entities. The central banks ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Discuss the key roles of the central bank in an economy. Should Essay”, n.d.)
Discuss the key roles of the central bank in an economy. Should Essay. Retrieved from https://studentshare.org/marketing/1635573-discuss-the-key-roles-of-the-central-bank-in-an-economy-should-central-banks-be-independent
(Discuss the Key Roles of the Central Bank in an Economy. Should Essay)
Discuss the Key Roles of the Central Bank in an Economy. Should Essay. https://studentshare.org/marketing/1635573-discuss-the-key-roles-of-the-central-bank-in-an-economy-should-central-banks-be-independent.
“Discuss the Key Roles of the Central Bank in an Economy. Should Essay”, n.d. https://studentshare.org/marketing/1635573-discuss-the-key-roles-of-the-central-bank-in-an-economy-should-central-banks-be-independent.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Central Banks & Monetary Policy
...? CENTRAL BANKS & MONETARY POLICY Central Banks & Monetary Policy Objectives of central banks Introduction As the new roles of central banks changed into agencies of public policy, there were underlying objectives that were infrequently stated. In the context it is used, an individual can conclude that objective that underlie all functions for the interest of the economy, is consistent with economic policy of the government. If compared to a case where objectives included both dimensions of public policy and commercial, such statement significantly increased the clearness...
13 Pages(3250 words)Research Paper
Central Banks & other International banks
..., the effects of the crisis have continued to dwindle over time. 5. What appears to be the major constraint that the central banks used to determine the limits of the monetary injections into the economy? The US assumed a most proactive role in tackling the financial crisis. The Federal Reserve has mainly applied interest rate changes to stop the financial crisis from having greater effects on the economy – more than any other central bank. The bank’s interest rate has been reduced from about 5.3% in September, 2007 to about 1.4% over the last couple of months (Senanayake, 2009). 6. Did the United States...
3 Pages(750 words)Assignment
Central bank
...that the pegged currency to the dollar has been a retardant to economic growth and thus should be aborted. Objectives of the GCC The main objective of the central bank is to stabilize the region’s economy and thus accelerate economic progress uniformly among members. This defines its task of defining and implementing the monetary policy of the Gulf region, conduct foreign exchange operations, maintain foreign reserves of the banks operating in the region. Conclusion The proposed central bank of the Gulf region can bring a positive impact on the economic progress of the whole region. However, the member countries have...
4 Pages(1000 words)Assignment
Central Bank for GCC
...?Central Bank for GCC Executive Summary The Gulf Cooperation Council (GCC) consists of six countries, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The study focuses on role of the central bank proposed to be established by the GCC countries, arguments for and against the GCC central bank and appropriate structure of the central bank taking into account the unique features of the GCC economic zone. The proposed bank is compared with European central bank established for countries in European Union for better...
5 Pages(1250 words)Research Paper
European Central Bank Essay
...On the first of December of 2005, the European Central Bank raised interest rates to 2.55 %.; in spite of the fact that it was a predictable step (especially for those who believed that the level of inflation in Eurozone must be tackled) it nevertheless caused some concerns for those who hold the belief that ECB should not take this measure in view of the sluggish economic growth in European countries. The reaction of the markets to this step of ECB was hardly typical as the shares prices rose and euro declined against the dollar within several days after announcement about the rising of the interest rates had been made (However, the reaction of American markets was more typical one as...
4 Pages(1000 words)Essay
Role of Central Banks
...Role of Central Banks In an economy with a central bank monopoly of currency issue, the central bank controls the monetary base through its ability to increase the quantity of currency in the economy. A principal objective of any central bank is to safeguard the value of the currency in terms of what it will purchase. Rising prices, or inflation, reduces the value of money. Monetary policy is directed to achieving this objective and providing a framework for non-inflationary economic growth. As in most other developed countries, monetary policy operates...
11 Pages(2750 words)Essay
Should central banks be independent
...country to the other. In this paper the main functions and roles of the central banks will be analyzed and an evaluation performed o whether the central banks should be made independent (Touffut 52). Functions towards the economy The key functions of the central bank revolve around the fact that the central bank is an agency that is expected to perform the conducts of monetary policy and provide the means through which it can be settled. In the past, they functioned as the government’s bankers, the monopoly of issuing...
4 Pages(1000 words)Essay
Central Bank
.... The proposed central bank in the GCC region will act as a financial bridge between the region and the developed world. Conclusion The central bank for the GCC should be structurally and functionally similar to that of ECB. But the conditions and precursors that led to the formation of ECB and now will lead to the formation of central bank for the GCC are quite different. The member countries of the GCC are similar to each other on the lines of economy, religion, language, social customs, governance system (all are monarchies), etc. But formation of a central bank for...
7 Pages(1750 words)Term Paper
The Key Roles of the Central Bank in an Economy
...The Key Roles of the Central Bank in an Economy The Central bank is mandated to conduct different functions. By the 20th century, the monetary market was dominated by central banking activities, despite the persistence of several other functions of enormous implication to the effectiveness of monetary exchange and financial systems. In addition, direct regulatory instruments replaced market-based instruments while financial systems matured and developed (Schinasi, 2003. Oversight and regulation of banking system had evolved significantly. The accessibility to the...
9 Pages(2250 words)Assignment
Central banks
...of the Central BankCentral is an independent institution which standardizes state currency, interest rates and manages money resource in the economy. It is directed by a chief executive who is habitually known as the governor, president or chairman. The regulation of currency by the central bank aids to bring back inflationary and deflationary situations to the stability of the economy. The central bank also supervises the banking system of commercial banks that do function in its economy so as to monitor the money...
6 Pages(1500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Essay on topic Discuss the key roles of the central bank in an economy. Should central banks be independent for FREE!
Contact Us