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Central Bank - Coggle Diagram
Central Bank
Main functions
Financial supervision
Control over banks and financial institutions
Protection of consumers of financial services
Management of gold and foreign exchange reserves
Providing liquidity
Exchange rate support
Currency issue
Issue of banknotes and coins
Monetary policy
Regulation of the money supply
Interest rate management
Monetary policy instruments
Open market operations
Interest rates
Increase/decrease of interest rates to regulate inflation
Reserve requirements
Establishment of minimum reserves for commercial banks
Objectives of the central bank
Support for full employment
Stimulating economic activity
Financial stability
Prevention of financial crises and bankruptcies
Price stability
Keeping inflation at a low level
Problems and challenges
Crises
Reaction to financial crises and recessions
Globalization
The impact of international markets on the domestic economy
Inflation and deflation
Difficulties in price control
Types of central banks
Independent central banks
A more stable and predictable policy
Separate from the political power
Central banks in the government system
They may be subject to political influence
Controlled by the state
Interaction with other institutions
International organizations
Cooperation with the IMF and the World Bank
Government
Consulting on economic policy
Public debt management
General description