In reference to activities undertaken by the central bank mainly to influence nominal interest rates, money supply and, eventually, price levels.
Questions tagged [central-banking]
287 questions
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Is it possible to have a modern economy without a central bank?
Many mainstream economists say that such thing is impossible. Is there some specific reason why the financial system needs a central bank?
In this video http://m.youtube.com/watch?v=BcuAOdXD0Go, Krugman says at 03:00 it's impossible to leave the…
John
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How does a central bank create the money used for quantitative easing or lowering the value of their currency?
Up until last week, the Swiss central bank used Francs to buy Euros, in an effort to lower the value of the Franc; today the European central bank announced that it would use Euros to buy bonds in order to fight deflation.
I assume that the central…
Axel Boldt
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What kind of loans was Credit Suisse given by the Swiss central bank, recently?
Credit Suisse was recently extended \$54-cum-\$108 billion loans from the Swiss central bank, even as its takeover by UBS was announced (partly covered by taxpayers).
I'm slightly more familiar with the loans that the two recently "failed" US banks,…
the gods from engineering
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Do central banks pay their staff and other costs with money that they create?
Central banks like the Bank of England and the Fed must cover their costs. I was wondering how they do this? I can think of two possible mechanisms:
Government allocates money from its tax revenue to the central bank, which then uses this money to…
Barnaby Golden
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Railway Mania in England
William Quinn et al. in their Boom and Bust (Cambridge University Press) describe the causes of the Railway stock market bust in 1840s England.
The outflow of gold due to problems with the harvest prompted the Bank of England to increase its…
R_quester
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Why don't central banks just donate money to their poor citizens, rather than QE?
Why don't they prioritize paying their citizens directly (Americans in this case) over providing liquidity, repo, buying bonds, and lowering interest rates? I have a BA in Economics, so hope this isn't bad economics! I ask for central banks in…
user4020
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What happens to Fed's balance sheet when its asset shrink in value?
What happens to Fed's balance sheet when its asset shrink in value? I noticed that Fed's balance sheet is special because I do not see any O.E. category (correct me if I am wrong). Suppsoe Fed's subprime MBS shrink in vlaue, its asset is decreased,…
Kun
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Reserve Bank of India monetary policy operating target
The operating target of RBI monetary policy is to keep weighted average call money market rate close to the policy repo rate. How does this target help RBI achieve its goal of price stability and growth? The reason I get was it helps in better…
user471651
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Target2 Balances at the ECB-will it lead to the collapse of the Euro?
Target 2 imbalances within the Eurosystem have continued to grow during 2020. Currently Germany is owed Eur 1TN by the other countries, principally Italy and Spain. If Germany at some point insists on redressing these balances, is the collapse of…
dm63
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Are there western governments that don't have to borrow in their own currency?
Are there any western and/or democratic countries where the central bank buys all government debt, interest free, directly from the treasury? I.e. are there any such countries where government spending is effectively financed by money printing…
Tim kinsella
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How a countries interest rate (official cash rate in NZ) and inter-bank network determines retail interest rates?
In New Zealand, there is the OCR, which is the rate at which retail banks borrow from the central bank (https://www.nzherald.co.nz/nz/news/video.cfm?c_id=1&gal_cid=1&gallery_id=213767)
However, banks also borrow and lend money to one another in the…
Christopher U
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central banking using the term reserve
The central bank of united states is called federal reserve and central bank of india is called Reserve bank of india.
What does the term reserve in central bank mean??
George carlin
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Relevance of central bank
Why do we need central bank ?
surely the government can print currency (say at a regular 5% a year to create some inflation) and regulate banks by conducting audits through finance ministry and so on.
Why do we need central bank setting interest…
George carlin
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Why do many countries hoard gold bars?
In my country, the only legal way to sell a gold bar is to sell it to the central bank. What are the reasons why some countries hoard gold bars?
lonestar
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Central Banks, Large Scale Asset Purchases and Inflation
First, the overview:
With the fractional reserve system, money/credit is primarily created through loans on deposits but the bank is required to maintain their deposits up to a certain amount (roughly 10% I think). The other primary avenue of money…
Jacob
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