Free Essays on Central Bank to Get Inspired & Learn by Example

Introduction

Central bank is the backbone of a nation’s economy. As the name suggests, it is central to the banking system of a country. It prevents the banking system of a nation to collapse. It has major role to play in all phases of economy, including recessionary phase, stable phase and expansionary phase. As the markets are becoming more mature, the roles and responsibilities of the central banks are increasing.
The objective of this paper is to discuss the key roles of the central bank in an economy. The paper is divided into five sections. The first section provides Continue reading...

Introduction

Currently the central bank is fundamentally an organization for financial policy. It commonly as well contains significant monetary firmness roles, and those appear very noticeable while the periods of monetary disorder. The assembly of those functions, the liabilities specified, and the series of additional roles assigned differentiate between economies. Central bank works on multiple issues including the extent of independent authority for central bank to establish policy, execute policy resolutions and their implementation. This as well associates to the extent of impact over exchange-rate plan and the establishment of goals for both exchange-rate and monetary policies. Central bank has Continue reading...

Central banking system is a major part of any economy. Central banking systems in the economy have important roles that they play in driving a country’s economy. They regulate money supply; they are responsible for controlling the interest rates as well as looking after the banking system within the country. Today, central banks are acting as agencies of monetary policy. Central banks play important roles in creating financial stability functions in a country. In United States, the central banking system is called Federal Reserve Bank (Fed). The importance of central banking in U.S. is emphasized in the roles Continue reading...

Institutions:

Introduction
Central banks play a crucial role in stabilizing an economy. That is through the application of monetary policy tools that controls money supply. In that view; the bank can apply the tools to address economic problems in different business cycles. To analyze the tools application, this essay seeks to demonstrate how the bank applies the tools and their application in the modern financial systems. That is achieved with reference to the UK banking system that is assumed to have ability to supply money by relying on liabilities. That would satisfy the increase or decrease in loan demand to Continue reading...

The 2007-2008 economic and financial crisis was the worst and greatest to grip United States since the 1930' Great Depression. The crisis resulted in 26 million Americans losing their jobs or unable to find permanent employment or just not ready to engage in job hunting because of the gloomy employment prospects (Angelides et al, 15). Moreover, 4 million Americans lost the ownership of their homes due to foreclosure and about 4.5 million others reneged on their mortgage payments thus fell in the foreclosure process. The amount of wealth that households lost totaled to about $11 trillion with savings and Continue reading...

The difference between monetary and fiscal policies is that monetary policy is handled by both the Federal Reserve and the central bank. The central bank is given a mandate by the government to oversee the fiscal policies in order to achieve the set macroeconomic policy objectives. The goals include maintaining stability in prices of goods and services. This will ensure inflation do not occur in the state. The central bank also controls the monetary policies with an aim of providing long term interest rates moderately. It ensures that other banks and financial institutions provide loans with affordable interest rates. Continue reading...

European Monetary Union can be defined as the coming together of European member states into one organized economic system with the Euro as the national currency of these member states. This process occurred through a three phase process. The first phase included complete freedom for capital transactions, increased cooperation between central banks, free use of the European currency unit, and improvement of economic convergence. The second phase saw the establishment of the European monetary institute, ban on the granting of central bank credit, increased coordination of monetary policies and the strengthening of economic convergence. In addition, there was the Continue reading...

Introduction

The recession is a decline in production, characterized by zero growth in gross national product (GNP) or falling for more than six months. The recession is one of the phases of the economic cycle, following after the boom, and is replaced by depression.
In general, the recession means a slowdown in economic growth and decline of production processes, resulting in a zero growth or uncritical, a moderate decline in gross national product (GNP) and gross domestic product (GDP) - the main indicators of the overall economic condition of the country. The recession may be caused by a number of Continue reading...

The Euro Area is now at a critical point of its existence, due to the conjecture of two factors. Firstly, the sovereign debt crisis of 2011 endangered Euro countries as it exacerbated the structural weaknesses and debt levels of peripheral countries such as Greece, Spain, Portugal and Italy (also referred to as PIGS in the academic literature). Secondly, the central banks worldwide have been entering into an area of “free money” by lowering interest rates to levels not seen before, and by launching quantitative easing programs (referred to as QE). The uncertainty comes from the fact that these policies Continue reading...

EFFECTS OF THE FINANCIAL CRISIS IN 2007-2009

Inflation
Prior to the financial crisis most central banks were required to fully commit to regulate the levels of inflation in the country. According to Mishkin, this process is called flexible inflation targeting. He defines it as a phenomena that “Involves a strong, credible commitment by the central bank to stabilize inflation in the long run, often at an explicit numerical level, but also allows for the central bank to pursue policies to stabilize output around its natural rate level in the short run,” (pg. 14). Banks like Federal Reserve were willing to commit to stabile inflation; however, they Continue reading...