The central bank, referred to as the central bank, is the main body responsible for the monetary policy of the country or the region (such as the European Union), and is usually the only currency issuer in the same economy. The normal issuance methods are loans and buying foreign exchange.

The central bank also supervises banks and other financial institutions to ensure that they will not act rashly or cheat. The CEO is the Governor of the Central Bank, the President of the European Central Bank, and the CEO/Managing Director of the Hong Kong Monetary Authority in China and monetary authority of singapore.

Central banks in most countries are state-owned, and at least have certain autonomy, allowing * * * to intervene in monetary policy. The so-called central bank means that its operation is not interfered by political forces. This situation includes Federal Reserve Bank of America, Bank of England (since 1997), Reserve Bank of India (1935), Bank of Mexico (1993), Bank of Japan, Bank of Canada, Reserve Bank of Australia and European Central Bank.

The main responsibility of the central bank is to maintain the stability and supply of the country's currency, but the more common tasks include controlling the discount rate and acting as the last pillar of emergency borrowers in the banking sector when the financial crisis occurs (private banks in the banking sector are usually an indispensable part of the national financial system). Typically, the following functions are also performed:

Formulate (participate in) monetary policy

Implement monetary policy

Open market operation (regulating liquidity)

Acting treasury

Supervise financial activities

Participate in world financial activities

At present, the central bank issues currency and adopts the "full reserve system", which requires gold and silver, qualified bills, foreign exchange, securities and so on. As a preparation for issuance, so as to avoid inflation caused by over-issuance. This is essentially different from commercial bank loans.

Its activities are not for profit. Can be said to be "* * * banks, card-issuing banks, bank banks".

Defending the currency is considered to be the primary responsibility of the central bank.

Balance sheet of the central bank

Take the European Central Bank for example.

Creditor (asset):

currency reserve

. golden

foreign exchange

Creditor's rights (receivables) to commercial banks

Major refinancing business

Long-term financing business

Fine tuning operation

Public financial creditor's rights

Other assets (such as securities)

Debit (liability)

Cash in circulation

commercial bank

Deposit in transfer account (including minimum reserve)

Savings convenience

Foreign institutional deposits

National deposit

Other liabilities

Behavior and responsibility

The functions of the central bank are as follows: (Not all banks have the following functions)

Implement the basic monetary policy

The exclusive right to issue banknotes

. As * * * banks and banks (the last source of loans)

Manage foreign exchange transactions, gold preparation and the issuance of government bonds.

Supervision and supervision of banking industry

Setting official interest rates-managing inflation and exchange rate-affects interest rates through various policy mechanisms.

monetary policy

The central bank is responsible for implementing the monetary policy chosen by the state. Whether it is a strong currency, gold standard currency, linked exchange rate system or monetary union, the most basic work of the central bank includes the establishment of a national monetary system. When a country has its own monetary system, it involves the standardization of money, which is basically a promissory note: a promissory note is a promise to convert bills into money in some cases. In the past, money could be exchanged for a fixed amount of precious metals. Now there are many strong currencies, so the guarantee money is no longer limited to the same amount of guarantee money in the same currency.

The central bank is called a bank because it has assets (foreign exchange, gold and other financial assets) and liabilities. The basic liabilities of the central bank are the currency in circulation and the liabilities guaranteed by the bank's own assets. Less commonly, the central bank in charge of a strong currency creates a new currency to repay debts, and there is theoretically no upper limit.

Most central banks will contact other countries' currencies directly (this method is adopted by the central banks of monetary union) or indirectly. In indirect cases, the central bank uses the foreign currency it holds to stabilize its own currency at a fixed exchange rate; The most famous countries that use this mechanism are China, Hongkong and Estonia.

In countries with strong currencies, people who control the currency regard monetary policy as a quick means to achieve the target interest rate or other purposes.

Central and rural areas

Central banks do not have a standardized name, but most of them are in the form of national banks (for example, Bank of England, Bank of Canada, Bank of Russia); Some of them are positioned as state-owned banks, such as the National Bank of Ukraine. Many countries may have private banks operating in a state-owned way, including state-owned banks or fully functional quasi-entities (such as financing import and export).

In some countries, especially producing countries, state-owned banks are only used as symbols of money and financing, such as Belarus branch (national bank). The Bank of China in other countries is used to illustrate that the central bank not only stabilizes the currency, but also includes the goal of full employment and industrial development.

Intervention interest rate

A typical central bank will control some short-term interest rates, which will affect the interest rates of stock market, bond market and real estate. Take the European Central Bank for example. They announced the interest rate at the chairman's Committee meeting (the Federal Reserve announced it at the board meeting).

Both the Federal Reserve Board and the European Central Bank are composed of 65,438+0 or more central entities, which are responsible for interest rates, the scale and form of open market operations, and major decisions of branches that implement policies. Take federal associations as examples, including local federal associations; There is a national central bank under the European Central Bank.

Intervention in interest rates is the most common, as detailed below.

Coercive force limitation

Contrary to popular belief, the central bank does not have full power, and there are restrictions when implementing policies. Most importantly, although you may think that the central bank controls some or all interest rates and exchange rates, economic theory (and empirical evidence) shows that it is impossible to manipulate interest rates at the same time in an open market. The most famous theory about limited power is Mundell's impossible trinity theory, which assumes that it is impossible to keep an eye on monetary policy (interest rate in a broad sense), exchange rate (fixed exchange rate) and maintain the free flow of capital at the same time. At present, most western economists believe that opening up the free flow of capital means that the central bank can peg interest rates or exchange rates, but it is impossible to peg both at the same time.

Even if the interest rate is pegged, most central banks have limited influence on the interest rate actually paid by individuals and enterprises.

Even the United States must achieve its goal by buying and selling foreign exchange. In the most famous policy failure, Soros used the pound to peg to the European Central Bank for arbitrage (this arbitrage brought Soros 2 billion income and made Britain spend 8 billion yuan to stabilize the pound), forcing Britain to give up this policy. Later, he severely criticized the rude banking policy and thought that no one should do anything like him. , reference: zh. *** /w/index？ Title =% E4% B8% AD% E5% A4% AE% E9% 8A% 80% E8% A1%8c&; Variant=zh-, Taoyuan Pawnshop is a pawnbroker under Compal Pawnshop, which provides loan services such as loan, loan, second child agency, auto financing and mortgage!

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If necessary, you can talk about satisfaction before borrowing. Central bank usually refers to the central bank of a country or region, such as China is the People's Bank, Britain is the Bank of England, the United States is the Federal Reserve, and China and Hongkong are the HKMA. ,