Central Bank

Central Bank Meaning:
In banking terminology, the term Central Bank refers to the institution either independent or state controlled thatoversees the monetary system and money supply of a nation. It uses monetary policies to promote specific outcomes.

Central Bank Example:
For example, a the Central Bank in the United States is the Federal Reserve Bank, in the UK it is the Bank of England, and in the European Union it is the European Central Bank. The Central Bank of a country is generally responsible for the issuance and distribution of the nation’s currency, for regulating the country’s credit system, for managing benchmark interest rates, and it is also the lender of last resort in many countries. Most of the world’s Central Banks are run by a committee that works with the Central Banks of other nations to manage the exchange rate for their particular national currency. In the United States, the Federal Reserve Bank System is composed of twelve regional banks located in different cities throughout the country.