Chapter 7 - Chapter 7 There are about 170 central banks in...

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There are about 170 central banks in the world today. Nearly every country has one. When the Soviet Union collapsed in 1990, the 12 of the 15 republics had central banks within a year Special type of financial intermediary Origin: To provide for government finance Originally private institutions Roles Government’s bank Banker’s bank 15-1 Chapter 7
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Central Banks The Government’s Bank Manage the finances of the government Central banks create money They print currency Control availability of money and credit The Banker’s Bank Operate interbank payments network Provide loans during periods of crisis Oversee financial intermediaries to insure safety and soundness 15-2
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Central Bank Objectives: Stability Low and stable inflation High and stable growth Stable financial markets Interest-rate stability Exchange-rate stability 15-3
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Central Bank Objectives: Strive to eliminate inflation
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Chapter 7 - Chapter 7 There are about 170 central banks in...

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