Central Bank Knowledge Base
Central Bank? What the fuck is the point of it? The Fed doesn't contain inflation and never has, why do we have a Central Bank? Woodrow Wilson regretted it after he brought it back...what is its purpose and why do we put up with it?
Why is it important to separate central bank and the goverment? In my country, the central bank has been separated from the executive branch of government. The central bank governor used to be a public post in the cabinet. Now, the president elect candidates for board of governors to be elected by the house. The elected board then works along side the house and the cabinet to maintain and execute monetary policy. Why is this the 'better' way (according to some economist)? Why is this NOT the 'better way (according to some others)? PS: I'm not an econ student so easy on the jargon pls.
How does the Central Bank and the Treasury work ? Could somebody who really understands the relationship between these two could explain to me in really simple way who is the one who prints the money? Where do they borrow it from? Is the Bank of England or the Federal Reserve the government? Who does the treasury borrow "money" from to print more money? I dont understand this. They are asking permission to print more of their own money from the central bank? How does the Federal Reserve or the Bank of England control the treasury? thanks.
What countries remain without a Rothchild central bank? In the year of 2000 there were seven countries without a Rothschild owned Central Bank, which were, Afghanistan, Iraq, Sudan, Libya, Cuba, North Korea and Iran. In 2003, Sudan, Libya, Cuba, North Korea and Iran remained as the last countries on Earth not controlled by the Red Shield banks. Today, only Cuba, North Korea and Iran have central banks that are not Red Shield banks. Does anyone see a pattern here?
How can Central Bank achieve price stability? Suppose the public loses confidence in holding their wealth in the form bonds and stocks, and they hold a larger portion of their wealth in the form of cash. However, this will lead to a change in the price level. If the central bank wants to achieve price stability, what should it do? Explain.
Does the Central Bank of the Philippines buy Gold and Silver coins? Does the Central Bank of the Philippines buy Gold and Silver coins? I am a coin collector and I wanted to know if the Central Bank of the Philippines would buy Gold or Silver bullion coins from USA or Canada? I've heard that they have a gold and silver buying program. Can anyone let me know what their policy is regarding buying and selling gold/silver coins?
Why would a central bank buy bonds directly from a government? This seems weird to me. I thought the primary market was when the government sold bonds to the public. The secondary market was when the NY Fed sold and resold them in NY. But I think my understanding is wrong: does the primary market consist of the government selling bonds to its central bank, not the public?
How does cutting financial institutions that work with Iran's central bank effect the US financial system? Sanctions signed into law by U.S. President Barack Obama on New Year's Eve would cut financial institutions that work with Iran's central bank off from the U.S. financial system, blocking the main path for Iran to receive payments for its crude. So I read this and I would like to understand why Iran does not receive the money directly from the others countries? How is the money routed to Iran, through the US? How does it all work and why would cutting off other countries block Iran from getting payments?
Why would you need to recapitalize a Central Bank? I've seen references lately to the supposed need for Europe to recapitalize the ECB. What am I missing? A central bank doesn't need capital. It's not like other banks. It creates money out of thin air to buy balance sheet assets. Recapitalizing the ECB makes no sense to me. Is this related to some rule about Eurozone governance or a simple misconception people are making?
Why is the European Central Bank not actively involved in bailouts via quantitative easing like the Fed? I was hearing about how the European countries like Greece and Portugal, now Italy were forced to ask for bailout when their "interest rates" on debt hit a high something like 5-6%? If the European Central Bank lowered their interest rates wouldn't that cause the banks to lower their interest rates and thereby prevent a bailout? I understand how our Federal Reserve Central Bank controls the U.S money flow I do not know as much about Europe.
Why does Australia need a Reserve Bank or why do countries need a central bank? Why can't the responsibilities of the Central banks be borne by a department of that countries' Federal Government? Why is it that the financial status of a countries' people (and the ability to generate bank notes or cash) is being determine by a bunch of private and profiteering directors? Or am I misunderstanding something here? If the interest generated by Central banks was put back into consolidated revenue instead of lining the pockets of directors and share holders, wouldn't this minimise inflation?
Why do countries have both a central bank and a finance ministry? Why do countries have both a central bank (called Federal Reserve Bank in the US) and a finance ministry (called Treasury Dep't. in the US, Chancellor of the Exchequer in the UK, etc.)? Does every country have both? What did the US have prior to 1913, when the Federal Reserve was created?
How much liquidity can a central bank (e.g. Fed or ECB) inject before it runs out of money? I have a couple of questions: (1) Is there an upper limit to how much liquidity a central bank can inject into the economy? (2) Can they do this under their reserves are exhausted or can it go on indefinitely? (3) Is it ever considered Seigniorage to do this? (4) How does it affect their balance sheet? If you have answers to one or more of the questions, please respond. Thanks.
Did colonial resistance to England's central bank cause the revolutionary war to start? The central bank was established in the colonies against their wishes. Central bankers have a long and bloody history of corruption. It is believed by many that they have offed many presidents s/a Lincoln, Kennedy, and an attempt at Reagan. The Central bank has caused enormous inflation and is the reason energy prices have soared. Ron Paul will end the Central bank (aka the federal reserve), and restore a gold standardized economy which will stabilize our economy !
What would be the likely response if any should I choose to write to the Central bank? Dear sir It has come to my attention that you and not the government of Canada print money and loan it to the Canadian government . This deception has lead to the average Canadian wrongly believing they as a nation are in debt when in truth the Canadian people have been robbed and held hostage to pay interest on the theft It has come to my attention that you are not an elected official and that by wrongly lending money to the government of Canada and holding hostage the peoples that you have become the owner of the government and by controlling the circulation of money with no oversight or democratic representation This is clearly in my opinion a charge of treason and interference with many elected governments Provincially and federally I believe there is ample evidence of a bloodless coup I therefore ask that you surrender yourself to the nearest RCMP detachment and make a full confession available in order to avoid further costs for a trial Because you are not the government of Canada the money you have printed is counterfeit and not the currency of this land Because you have used these counter fit notes to purchase to the government you should immediately confess to treason interference counterfeiting and holding hostage the peoples of Canada in a racketeering scheme of absolute evil with the purposeful design in mind of enslaving the peoples of this Dominion ----------------------------------- What would be the likely response if any should I choose to write to the Central bank Laughter A free beating A restraining order A job offer A confused secretary who tosses it in the rubbish bin right away ? --- Something completely different ?
What is Monetary Base and how can the Central Bank affect it? Hi, I don't understand what is the monetary base, from definition, I get it's all the money outside of the bank and the "real"(that physical money) money inside the bank. Am I correct? But how come when the Central Bank conduct a SRA(meaning selling the bonds), the Monetary Base will be temporarily smaller? Thanks
Relationship between central bank and State budget? When State budget is deficit, does central bank hand money to the government? When central bank issue bonds (eg: withdraw money to fight inflation), do those money run to state budget? Does the Treasury involve?
Question about the Central bank's operation and the money supply? Why does it say the reason central bank sales of securities is to decrease the growth of deposits and loans with the financial system? And, why is the money supply goes down when the interest rate is high? I thought when the interest rate is high, people will start to put their money in the bank, so the MS should get bigger. Thanks, guys!
ECONOMICS HELP: What does it mean if the central bank injects cash into an economy? ECONOMICS HELP: What does it mean if the central bank injects cash into an economy? Thanks a heap! Rather confused. "The act of injecting cash into an economy is also known as an injection, which is part of “a model used in Keynesian economics based on the equality of non-consumption expenditures” (Amosweb), including investment, government spending, and exports. Specifically in context, the aid of the central bank injecting cash into the economy....." Stuck!
The European Union has created the European Central Bank? The European Union has created the European Central Bank (ECB). Unlike the Federal Reserve, the ECB is not a lender of last resort. This means that if commercial banks fail to honor their deposits the ECB is not supposed to step in and help them with emergency credit. In your opinion is this a reliable institutional setting for a banking system? Why?
Do we really need a private central bank? Article one section 8 of the constitution says that the govt has the right to print its own money. Why do they need a private central bank to print the money. Plus the private bank charges interest. Say no to the Rockefellers and the Rothschilds. End the Fed. Vote Ron Paul 2012.
How can Central Bank and Federal Government slow down rising looney? To support exporters, industry and workers in industry, we should do something, what's your idea?: 1-Central Bank Buys American dollar and increases reserves. 2-Federal Gov. Pays back more national debt. 3-Decreasing interest rate. 4-Cutting more taxes. or cutting from corporate tax to support industry and to decrease surplus or all of them
Do banks borrow money from the central bank? I know the central bank sells and buys govt securites. But if the banks want money, what happens? Do they borrow from the central bank too (can they?), or can they only obtain money from other commercial banks? Also, how does the cash rate influence the banks? Btw, cash rate = Fed funds rate in US
What does the keynesian economics theory say the central bank should do when it expands the money supply to cr? What does the keynesian economics theory say the central bank should do when it expands the money supply to create more government spending in the economy sending on what bank loans for consumers/consumer spending to help bring down unemployment or what can anyone explain ? To fight unemployment, the Fed traditionally expands the money supply. This creates more spending in the economy, which creates more jobs. http://www.huppi.com/kangaroo/Keynesianism.htm
Is there a bond to be signed while joining Central bank of india as a PO? Hi, can anyone who works in central bank of india or selected as a PO help me out on this one? > how many days does the joining process take? i have to report on 29th ..will i be directed outright to my branch or place of joining? do i have to sign any bond at the time of joining ? which bank should i chose..sbi or cbi?
how does the European Central Bank set monetary policy? there are 27 member countries in the European Union and they all use the same Euro currency. what i'd like to know is how does the central bank set a single monetary policy/interest rate for 27 different countries? surely they'd all have different economic climates and objectives right?
Which of the following statements is generally true about central bank independence? a) Countries with the most independent central banks have the lowest inflation rates. b) Countries with the least independent central banks have the lowest inflation rates. c) Countries without central banks have the lowest inflation rates. d) The degree of independence of a country's central banks has little to do with its inflation rate.
fixed exchange rates if the central bank uses monetary policy to fix the exchange rate? Which are true? A. All these choices are true. B. A fixed exchange rate magnifies the ability of monetary policy to stabilize the domestic economy. C. With a fixed exchange rate, net exports always tend to equal zero. D. Because the central bank is responsible for maintaining the fixed exchange rate, it is not free to use monetary policy to stabilize the domestic economy.
Should monetary policy be made by an independent central bank? Should monetary policy be made by an independent central bank? Monetary policy has a lasting effect in Canada, but members of the Bank of Canada's Governing Council are not held directly accountable to elected officials or to the public. The following questions address the costs and benefits of central bank independence. Which of the following is an example of the time inconsistency of policy? A:The inflation rate equals 5% and the Bank of Canada announces that its target inflation rate is 2%, but the next day the Bank of Canada reduces the overnight rate. B: The government faces re-election and gets Parliament to cut taxes before the campaign begins. C: The Prime Minister asks the Bank of Canada to lower the overnight rate, but the Governor of the Bank refuses for fear of inflation. D: The government lowers taxes and increases government purchases whenever economic indicators show an approaching recession.
I have opportunity to take a master degree free or work in the central bank.What should i choose? I like the environment in campus and i really interest about the major offered there..But i wont have earnings like i get now..(i used to be working and having my own money this 2 year)..and Working in central bank is a dream for a lot of people because i will get financial assurance for ur future..but it will be hard..i have to move out of the city..and the environment may be not comfortable. These two choice come in the same time and wont be second chance..what should i choose?
Can World Currency, run by a World Government and World Central Bank work? I always wondered this? I know the Euros didn't work because the countries within the Eurozone printed the money, instead of EU Central Bank. What if a world currency was printed by Central bank of a World Government? Can it work? What I'm asking s World Government and World Central bank work and Single World Currency work?
What do you think of this Andrew Jackson quote regarding his veto of a central bank? A central bank is basically what the Federal Reserve is in the present day. "It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society the farmers, mechanics, and laborers who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles." -- Andrew Jackson on the VETO OF THE RENEWAL OF THE SECOND BANK OF THE U.S. DAR.............much thanks...........LUV the quote. Republicrat.........much thanx, didn't think you'de mind :)
Can you have a fiat currency without a central bank? Currently the United States dollar, and (as far as I know) the rest of the world's currencies are fiat, that is there are no commodities (gold) supporting the value of the money system. This system is enforced by the Federal Reserve System in the United States, as well as by the other central banks in other countries, who are charged with maintaining monitary stability. They, however, do not seem very well equiped to do so, as can be attested to by all the problems created in the economy by their bad policies (for instance the current "housing crisis" that was caused by the Fed keeping interest rates too low for too long post 9/11). I believe a market based solution would be a better way of insuring monitary stability, however, I can see no way to do this with our current fiat currency. I believe it would be possible to do so with a commodity based currency, however, to do so would require deflating the dollar enough to a point that the USA would be destitute. So, does anybody know if it is possible to eliminate the Federal Reserve, and let market forces determine interest rates, without returing to the gold standard, which would impoverish us? OPM - What do you mean the Fed dosen't control interest rates? Perhaps control isn't the correct word, as they don't send out a memo to all consumer banks saying "effective immediately, all mortgage interest rates are now at 6 a half percent"... or something like that... but isn't that exactly what they are trying to do indirectly via setting the Fed funds rate, through their open market activities, and by setting the reserve requirement? And as for the current housing market issue, do you not think the sub-prime market wasn't expanded by the fact that money was avaliable on the cheap due to the Fed increasing liquidity in the post 9/11 recession? I remember all the ads at the time "...interest rates are at an all time low, come in and see how we can get you into an ARM and save you hundreds on your mortgage" or "...refinance your credit card debts". These low interest rated did encourage people who otherwise could not afford to buy homes and other big ticket items to purchase sed items... typically on adjustable rate loans, which was quite unwise (as adjustable rate loans are designed for high interest rate situations)... I'm just thinking that if the commercial lenders weren't flush with cash from the federal reserve they may have been a little more cautious about their lending policies, and wouldn't have pushed these bad loans on so many people...
Why does the government need a central bank?? I'm trying to understand this concept. Why doesn't the government just control the money directly. And can't the central bank then call the shots on our economy anytime? Meaning they can start recessions at anytime they want or alter the old greenback as they please?
What benefits do note-issuing banks (commercial ones, not Central Bank) get ? In some countries banknote-issuing banks are responsible for putting aside foreign currency (used to be gold, now it's more like to be US dollar, Euro, Japanese Yen) with the central of banks of their respective countries as deposits when they issue money. As these banks are not creating money by issuing banknotes, can anyone please tell me what benefits do these banknotes-issuing banks get, apart from the publicity they get by having their names printed on the banknotes and that they are being trusted by the local governments ?
Could somebody explain the big significance in the fed or central bank lowering interest rates or not? IS this news overhyped? I have yet to understand why this is such a big indicator in how good the economy will be. I understand that the central bank loans money to other banks and by them lowering it or raising it gives the loaner banks a little more incentive or not to lend more money out , but is this really that big of a deal to how much money is in the economy? And also they talk about it like it is opening a water faucet or something? Where does all the money go that is already currently in the economy? Does it just evaporate or something?
When a country borrows from the IMF; is the Central Bank that borrows or the Government? Borrowing from the IMF is normally when a country experiences balance of payment problems. Therefore is it not the responsibility of the Central Bank (CB)? in which case the CB would borrow and repay from any future foreign exchange holdings. Or does the Government undertake this borrowing on the CBs behalf? in which case the debt would be repaid by the public and domestic currency exchanged for any CB holdings of foreign exchange. In either case the economy would have to directed towards incresing the level of exports / reducing imports. Just wanted to know how this operation actually takes place, the interaction between the two balance sheets (CB and Government), where the liability is held and how it is paid back. Any economics experts out there?
Should monetary policy be made by an independent central bank? Monetary policy has a lasting effect in Canad? Should monetary policy be made by an independent central bank? Monetary policy has a lasting effect in Canada, but members of the Bank of Canada's Governing Council are not held directly accountable to elected officials or to the public. The following questions address the costs and benefits of central bank independence. 2.1. Wilson is an economist who favours an independent central bank. He would likely emphasize which of the following arguments? A. There is a negative correlation between central bank independence and inflation rates. B. The public and elected officials should have a say in the conduct of monetary policy. C. An independent central bank eliminates the short-run tradeoff between unemployment and inflation. D. Direct accountability is the first priority of every government institution.
deposits with central bank included in required ratio? Do deposits that commercial banks made with the central bank count towards their reserve requirements? For example, say the reserve requirement is 0.2; the commercial bank has 100 000 in assets, 15 000 on deposit with the central bank, and is holding 5000 in cash. Does this indicate that the bank is holding the required amounts of reserves (is the 15 000 counted with respect to required reserves?)
Why isnt there a central bank clearning house for money? transfers from the Gulf, to any bank in India, any branch? Why only some of the banks have tie ups with some of the banks? Why doesnt India have a central clearing account like cheque clearing? It receives and disburses the money to the appropriate bank appropriate branch in India if sent by anybody in Gulf to India? Federal Reserve is US based. I meant something like Central bank of india to act as intermediary to receive all payments intended for any bank account in India then disburse them appropriately. Currently to send money to a canara bank account in India you need to approach different exchange, same for State Bank - you cannot use the Canara bank exchange to send to State Bank - people scratching the benches of Indian Parliament wasting 100 crores per session do the needful. fast.
Is a central bank like the Fed truly necessary? My AP Gov teacher was saying that a central bank is necessary. Who else going to give out loans to struggling banks and they also control interest rates. They are just making Congress's job easier. Zenmeister: Nice response. So are we all agreeing that Alexander "I want a Central Bank" Hamilton was an idiot.
With creation of the new Supreme Court of the UK , do you think a Central Bank for the UK shoudld be created? Now, in a few years the new Supreme court of the United Kingdom will be created, which is some great news and this means the UK's judicial system will de unified, but the UK still needs more union especially in the national currency issue, it would be better and easier for everyone to have bank notes that are valid valid and the same all across the UK with out all that confusion for tourists and all that incovenience for everyone, i im from mexico and i have relatives living in the UK and it is always confusing when we visit glasgow because of currency, and i think a Central Bank of the United Kingdom responsible for issuing Pound Sterling currency will be better so that way a bank note is valid in all parts of the UK with out all that confusion, and i want to know what the british people's opinion have on this issue.
What would happen if there is no central bank? Given the bank notes are printed by the government and given evenly among the banks at no interest. The amount of money would stay constant. . The interest would happen only between the lender and the borrower at the market interest rate. . What do you think about this model? Would this work? If you think it wouldn't, give reasons.
How does the Treasury and Central bank work? Is the Bank of England or the Federal Reserve the government? Who prints the money? Government borrows money from who? Could somebody please explaing to me the relationship between them? Does anyboy understand this well enough to explain this in very simplified terms? Thank you.
Should we replace the Federal Reserve with a Congressional central bank ? My source is the Ludwig Von Mises Institute .No one can tell me that the Federal Reserve is not a private bank .Furthermore ,the people who have criticized me in the past for asking a similar question have only cited the Federal Reserve as their source .People tell me that I am uninformed regarding the Federal Reserve .Those people ought to get a clue !!!!!! Grayshadow said that the Federal Reserve is not a private bank .
Why did the US abandon free market capitalism 100 years ago and install a Central Bank? We were doing just fine, we entered the Industrial Age. Capitalism is based on free market principles mixed with fear. This is no fear currently, this is not a result of capitalism, it is a direct result of government intervention. And a Central Bank should not have total domination of the money supply either or the interest rates, that should be up to the market in capitalism.
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