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

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2
Q

What are the Central Bank’s monetary policy functions?

A

QE
Exchange rates
Monetary policy IR

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3
Q

What does monetary policy involve?

A

IR
ER
Money supply
Credit supply

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4
Q

How is the Central Bank involved in commercial banking?

A

Lender of Last Resort
Manages liquidity
Oversees payment systems

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5
Q

How does the Central Bank act as a banker to the govt?

A

QE
Debt management

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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

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