Central bank

A central bank is indeed central to the financial system of a country, but what exactly does it mean and what is the difference between a central bank and the other banks in a countries system... it is not literally located in the centre of the others is it.

Well, the central bank is the government institution that performs many key tasks for the country: specifically issuing the currency, regulating credit, holding reserves, acting as a fiscal agent and trying to keep an orderly market.

The central bank in the United States is called the federal reserve system.

In Britain, it is of course the Bank of England that has this role as the central bank; for Europe there is the European Central Bank.

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