4.4 - Role of Central Banks Flashcards
1
Q
What are the 4 main functions of a central bank?
A
Monetary policy function
Banker to govt
Banker to banks
Banking industry regulation
2
Q
What are the Central Bank’s monetary policy functions?
A
QE
Exchange rates
Monetary policy IR
3
Q
What does monetary policy involve?
A
IR
ER
Money supply
Credit supply
4
Q
How is the Central Bank involved in commercial banking?
A
Lender of Last Resort
Manages liquidity
Oversees payment systems
5
Q
How does the Central Bank act as a banker to the govt?
A
QE
Debt management
6
Q
What are the main challanges facing the Bank of England?
A
Control CPI + inflation expectations
Support recovery
Rebalance towards exports + investment
Financial stability
