tailieunhanh - Lecture Money, banking, and financial markets (3/e): Chapter 15 - Stephen G. Cecchetti, Kermit L. Schoenholtz

Chapter 15 - Central banks in the world today. This chapter begins to explain the role of central banks in our economic and financial system. It will describe the origins of modern central banking. It will examine the complexities policymakers now face in meeting their responsibilities. It will highlight a central question that has become politically controversial: what is the proper relationship between a central bank and the government? | Chapter Fifteen 15- Introduction The world’s leading central banks played a key role in bringing the financial system and the economy back to safe harbor after the peak of the financial crisis in 2008. They acted in unprecedented fashion to prevent the financial system from capsizing and, over time, to restore financial and economic stability. 15- Introduction The central bank of the . is the Federal Reserve (Fed). The people who work there are responsible for making sure that our financial system functions smoothly so that the average citizen can carry on without worrying about it. 15- Introduction In Part IV, we will study the evolving role of central banks. Central banks do not act only during times of crisis. Their work is vital to the day-to-day operation of any modern economy. Today there are roughly 170 central banks in the world. Most people only have a vague idea of what central banks do. 15- Introduction This chapter begins to explain the | Chapter Fifteen 15- Introduction The world’s leading central banks played a key role in bringing the financial system and the economy back to safe harbor after the peak of the financial crisis in 2008. They acted in unprecedented fashion to prevent the financial system from capsizing and, over time, to restore financial and economic stability. 15- Introduction The central bank of the . is the Federal Reserve (Fed). The people who work there are responsible for making sure that our financial system functions smoothly so that the average citizen can carry on without worrying about it. 15- Introduction In Part IV, we will study the evolving role of central banks. Central banks do not act only during times of crisis. Their work is vital to the day-to-day operation of any modern economy. Today there are roughly 170 central banks in the world. Most people only have a vague idea of what central banks do. 15- Introduction This chapter begins to explain the role of central banks in our economic and financial system. It will describe the origins of modern central banking. It will examine the complexities policymakers now face in meeting their responsibilities. It will highlight a central question that has become politically controversial: what is the proper relationship between a central bank and the government? 15- The Basics: How Central Banks Originated and Their Role Today The central bank started out as the government’s bank and over the years added various other functions. A modern central bank not only manages the government’s finances but provides an array of services to commercial banks. 15- The Government’s Bank King William of Orange created the central bank to finance wars. Napoleon Bonaparte did it in an effort to stabilize his country’s economic and financial system. These examples are more an exception because central banking is largely a 20th century phenomenon. 15- The Government’s Bank In 1900, only .