Central Banks

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A Central Bank, A Reserve bank, or Monetary authority is an institution that manages a state’s currency,money supply, and interest rates.

Central banks also usually oversee the commercial banking system of their respective countries.

In contrast to a Commercial bank, a Central Bank possesses a monopoly on a steadily increasing the amount of money in the nation due to population growth (Census) and Commerce, and usually also prints the national currency, which usually serves as the nation’s legal tender.

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Examples of major Central Banks include the European Central Bank (ECB) and the Federal Reserve of the United States.

The primary function of a Central Bank is to manage the nation’s money supply Monetary Policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.

Central banks usually also have supervisory powers, intended to prevent bank runs and to reduce the risk that commercial banks and other financial institutions engage in reckless or fraudulent behavior. Central banks in most developed nations are institutionally designed to be independent from political interference.

Still, limited control by the executive and legislative bodies usually exists.

The chief executive of a central bank is normally known as an elected Manager, Governor, President or Chairman who represents his or her Central Bank and is part of the Board of Governors at Angelcraft Crown World Bank Reserve.

The old town hall in Amsterdam where the Bank of Amsterdam was founded in 1609, painting by Pieter Saenredam - Het Oud Stadhuis te Amsterdam
The old town hall in Amsterdam where the Bank of Amsterdam was founded in 1609, painting by Pieter Saenredam – Het Oud Stadhuis te Amsterdam

History of Central Banks

The central bank of Sweden “Sveriges Riksbank” or simply “Riksbanken” was founded in Stockholm in 1664 and answered to the Parliament at Mann “Riksdag of the Estates”

One role of the Swedish central bank was lending money to the government.

Prior to the 17th century most money was commodity currency money, typically gold or silver.  Copper and Bronze and Mixed metals were also used.

Head of Achilles depicted on a 4th-century BC coin from Kremaste, Phthia. Reverse- Thetis, wearing chiton and holding shield of Achilles with his AX monogram
Head of Achilles depicted on a 4th-century BC coin from Kremaste, Phthia. Reverse- Thetis, wearing chiton and holding shield of Achilles with his AX monogram

However when currency turned paper and corruption founded inflation, promises to pay were widely circulated and accepted as value at least five hundred years earlier in both Europe and Asia.

In China, the Song Dynasty was the first to issue generally circulating paper currency, while the Yuan Dynasty was the first to use notes as the predominant circulating medium.

In 1455, in an effort to control inflation, the succeeding Ming Dynasty ended the use of paper money and closed much of Chinese trade.

The medieval European Knights Templar ran an early prototype of a central banking system, as their promises to pay were widely respected, and many regard their activities as having laid the basis for the modern banking system.

As the first public bank to “offer accounts not directly convertible to coin”, the Bank of Amsterdam was established in 1609 and is considered to be the precursor to modern central banks.

The central bank of Sweden “Sveriges Riksbank” or simply “Riksbanken” was founded in Stockholm in 1664 and answered to the Parliament at Mann “Riksdag of the Estates”

 

 

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For more  information about Central Banks please contact  Angelcraft Crown Law Firm angelcraft.crown.law.firm.yv@outlook.com

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…everything with conscience, everything with purpose and everything with prayer. Angelcraft Crown World Bank and Reserve is the New World Bank