Open Yale CoursesECON 252: Financial MarketsLecture 16 - The Evolution and Perfection of Monetary Policy<< previous session| next session >>Overview:Central Banks, originally created as bankers' banks, implement monetary policy using their leverage over thesupply of money and credit standards. Since the Bank of England was founded in 1694, through the goldstandard which lasted until the 1930s, and into modern times, central banks have pursued monetary policy tostabilize the banking system. Central banks monitor currency flows and inflation, acting when crises, such asbank runs, emerged. More recently, central banks have taken an increasingly expansive role in stabilizingeconomic fluctuations. In the yet to be confirmed current recession, the Federal Reserve has used openmarket operations and innovative financial arrangements to try to forestall the recession and bail out failing
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